Can How does debt settlement work?
Debt Settlement occurs when you reduce the amount of your unsecured debts through
creditor negotiations. At its core, debt settlement is the best option for a creditor
to "lose the least" on accounts that default in payment. The process is largely
predictable due to established timelines and bank policies which vary from creditor
to creditor. Debt Settlement is a proven effective means to eliminate debt for the
right person.
Back to Top
Why does debt settlement work?
Banks in the process of lending, know that a percentage of accounts will not perform,
meaning some accounts will default and go unpaid. There is a multi-billion dollar
industry built around the known fact that not everyone will be able to repay their
debt. This collection process is centered on a lenders effort to "lose the least".
The tools and mechanisms in place for this "lose the least" effort are by and large,
predictable.
Once an account becomes seriously delinquent, the odds of ever being paid another
penny on it decrease dramatically. Creditors have the option of accepting less than
the balance in satisfaction of the entire debt, or drop the account into the collection
pipeline and see what they get on the other end. This pipeline consists of 3 options,
assign, sue or sell, or what I jokingly refer to as A-S-S.
Back to Top
Assigning your debt:
Assignment collectors are companies who, on behalf of the creditor, are attempting
to collect on unpaid balances. Generally, whatever they collect, they are paid a
percentage. Credit card issuers will grade the performance of those they assign
debt to and will continually award collection files to the best performers, the
companies who get them the most money. Assignment of debt also has different tiers.
You may be contacted by one debt collection company for a few months, then a different
one after 90 days, and even another one 90 days after that. The collector's job
is to get as much as they can for their client, the bank, and to secure the best
return for themselves on their performance based fee. Assuming the collector is
able to collect 50%, the creditor may see a return of as much as 35% of the assigned
balance. This number is a moving target, and will likely be different per account,
per portfolio, per tier, per creditor.
Back to Top
Being sued to collect your debt:
Creditors select accounts for immediate referral to law firms in order to collect.
Some law firm's collection attempts will be very similar to an assignment collector
where the firm is paid a performance fee just like assignment collectors. Others
may start off with that appearance, but will then begin legal process in order to
collect. Attorneys who sue in order to collect will generally add legal fees to
the final judgment amount. Most law suits for unpaid credit card debt go uncontested
and default judgment is entered against the debtor. The judgment itself is a piece
of paper, but with legal enforcement implications that allow for collection of the
debt via lien, levy and garnishment.
Being sued in order to collectits own
costs that will vary, with no guarantee the judgment can be collected on. For your
creditor, this means higher cost's with an unknown return (rest assured the return
as an aggregate justifies the expense enough to keep this part of the pipeline in
tact-otherwise it would no longer be supported).
Back to Top
Process of selling your debt:
There are different tiers of debt sales. Your account can be sold several times
and will have a different value at each sale. Let's focus on the sale done by the
original creditor, who you opened your account with. Charge off generally means
the creditor is no longer expecting to be paid and is recording the debt amount
as a loss. That was then and this is now. In the current economy, portfolios of
charge off debt are being bid at 8-9 cents. When your debt is purchased, the buyer
will then subject the accounts it purchased to the A-S-S principle described above.
The buyer has risked their capital with an expectation that they will be profitable
by making an ASS of themselves.
Historically, the percentage of non-performing credit card assets has been low,
less than 5%. In today's economy, that number has skyrocketed to all-time highs.
Default on mortgage debt, commercial debt, revolving unsecured consumer debt (credit
cards) are all approaching, or have surpassed any prior precedent.
Focusing on unsecured credit card debt; how has all this affected settlement? Well,
look at the math. Your creditor will often "lose the least" be reaching agreements
with those in serious delinquency before they drop it into the collection pipeline.
This is why settlement works, whether 10 years ago or today.
With these increased portfolio losses at all-time highs, banks would prefer to work
with the Debt Settlement companies in order to lose the least. Consumers, whose
financial situation suggests settlement is a good option to pursue, will win by
working directly with their Debt Settlement company and often they will be in the
position to save thousands without having to file for bankruptcy.
There are a few of the larger card issuers with whom the best savings will not be
achieved until the account is placed with outside collection, but for the most part,
reaching an agreement with the original creditor is in the best interest of the
bank and the consumer. It is why our focus at Student Debt Escape is to design an
individualized plan that will get our members out of debt in the quickest way possible.
Yes, our approach is one of the most aggressive in our industry. We are the crash
diet of debt reduction.
Back to Top
Can my wages be garnished?
Debt Collectors can be intimidating and may use questionable tactics that
are designed to scare people into making a payment, even if you cannot afford to
make one. Actual garnishment actions are not that common and you will have advance
warning.
Creditors must first file a lawsuit, get a judgment, and then get court
authorization for a garnishment. You cannot just have your pay check, or
any portion of it, taken without court approval, and you must receive notification
and proper documents from the court first. Worst case scenario, you may need to
negotiate a settlement that is higher than you would have liked, or commit to a
payment plan in order to avoid a garnishment.
Back to Top
Is my personal information kept private?
Yes, absolutely. In a case where we are negotiating settlements for you, however,
you will be required to provide Student Loans Escape with written, and sometimes
verbal, authorization that allows us to give and receive information on your behalf
when negotiating credit accounts with each individual creditor, as requested by
you, the consumer.
Back to Top
Can I be sued if I use the debt settlement
approach?
Creditors have the right to file a lawsuit if you are not paying a debt. This is
one of the biggest concerns you should have before determining if debt settlement
is something you should attempt. Given how many accounts fall delinquent
each year, lawsuits in order to collect are not that common. Don't let this statement
lead you to think it won't happen to you though. Being sued means you will have
to address that specific debt as a priority to settle before it becomes a judgment.
Settling a lawsuit out of court and avoiding judgment is quite normal, but the rate
of savings will generally not be as good as when settling debt that is not in the
courts. If you are only marginally suited to try debt settlement as a means
to avoid bankruptcy and you get sued early on, it may become a show stopper. You
may then have to file bankruptcy due to not being able to fund an out of court settlement
or have to agree to a payment plan that will hinder your ability to save money to
settle with other creditors. This can and does snowball into delays in settling
other debts which can then lead to more lawsuits.
Further:
Threats of litigation are very popular, regardless of the fact that debt collectors
are prohibited (by the FDCPA) to threaten legal action unless they're authorized
to do so. This does not stop collectors from making the threat. You will need to
know which threats are credible and which are part of typical (and unfortunately
abusive) debt collection efforts.
Back to Top
Can I still settle my debt if I'm currently
being sued by a debt collector or creditor?
Yes. It is still possible to come to acceptable settlement terms during litigation
or after a judgment has been filed.
Back to Top
How do I get started with debt negotiation
and settling my debt?
Your first step will be
scheduling a consult with a Student Loans Escape specialist
so you can learn in detail what and how debt settlement will work in your particular
circumstances.
You will need to qualify for our program. Not everyone qualifies,
but everyone appreciates the time we take in helping to determine what options will
fit you. You can call us toll free to schedule a consult:
Back to Top
Can Student Loans be settled?
Yes, it is possible, however, not an easy process. Private student loans just like
many other forms of debt are still considered an unsecured debt. This means that
there isn't anything tied to that money other then you that guarantee repayment.
With any other type of unsecured debt this can play in your favor, because most
creditors are willing to accept something for the loan over nothing. In most cases
the finance companies of student loans will accept payment in full. What this means
is that they will accept the reduced (settled) amount of the original loan balance.
Keep in mind that when the offer is made to the finance company you have to be prepared
to pay the full settlement amount.
Back to Top
What type of Student Loans can be settled?
Only Private (NON-FEDERALLY INSURED) student loans can be settled. Also, the loan
must be in DELINQUENT (DEFAULTED) status for atleast 6 months.
Back to Top
Can Student Loans be completely discharged
in bankruptcy?
Student Loans are dischargeable only if you can prove that having to repay it would
impose an "undue hardship" on you. Under certain circumstances you can discharge
your obligation to repay a student loan in bankruptcy. The criterion is set out
at 11 U.S.C. 523 (a) (8). Currently your loan may be discharged only if the first
payment became due on the debt at least seven years before the bankruptcy was filed.
Any grace periods, forbearances, or deferments must be subtracted from the time
elapsed between when the first payment became due and the filing date. Loans outstanding
for less than the required seven-year period can be discharged only if the bankruptcy
court makes an express finding that repayment would place an
"undue hardship"
on you.
If your obligation to repay a student loan is discharged in bankruptcy, any co-signers
or endorsers of your debt are not discharged. For example, if your parents co-signed
your student loan, they are still liable for repayment.
The undue hardship standard is
very difficult to meet, and different
bankruptcy judges across the country apply different standards. However, it is possible
to get a student loan discharged. Unlike practically every other legal liability,
student loans never go away—there is currently no statute of limitations for student
loan debt. If you think there's even a remote possibility that you might ever be
able to get a better job, you should investigate
deferrals,
settlement
and
forgiveness options with the lender or guarantor of your loans.
For cases filed prior to October 17, 2005, if the program under which your student
loan is issued, insured, administered is a For-profit, PRIVATE (non-government)
entity, it may be dischargeable. However, if the program itself, such as LAL, GSL,
etc. receives nonprofit funding by participation of nonprofit entities, the
loan
is not dischargeable in bankruptcy.
Back to Top
Can I arrange payment plan upon settlement
of my Private Student Loans?
I would say that 99.99% of the time a lender will not accept any form of payment
plan upon a successful settlement. In the rarest cases, finance companies settled
for more than a single lump sum payment. But even then, the new negotiated payment
was divided into only 2 consecutive payments. From a finance company's point of
view, it does not make any sense to settle for anything less than a single lump
sum payment. It is because, they're already taking a big hit by agreeing to accept
less than the original amount loaned. Consecutively, the difference between the
total amount borrowed and the final settlement, usually gets written off for tax
purposes. This is very financially beneficial for the lender; hence, it is one of
the reasons your lender agreed to a reduced settlement.
Back to Top
What is Student Loans Forgiveness Program?
One of the greatest opportunities for stressed out college graduates is student
"loan forgiveness" or "loan repayment" programs. These programs offer to eliminate
some or all of your student loans in return for choosing certain careers, military
service, and even volunteer work. Such programs can eliminate anywhere from a few
thousand dollars to over $100,000 of student loans. Ironically, many of these programs
receive a relatively small number of applications indicating that many graduates
are completely unaware of these opportunities.
Loan Forgiveness vs. Loan Repayment
Student loan forgiveness programs are those backed by the Federal government and
cover loans issued through Federal programs such as Stafford and Perkins Loans.
When you participate in one of these programs, portions of your debt are literally
"erased" from your lender's books.
Student loan repayment programs, which are more widespread than forgiveness programs,
may be used to eliminate any type of loan including private loans. Under these programs,
you either receive additional funds that you can use to pay down your loan, or a
payment is made directly to your lender by your employer.
All student loans authorized by Title IV of the Higher Education Act can be canceled
if you die or become permanently and totally disabled [but you cannot be considered
disabled on the basis of a condition that existed when you applied for the loan
unless it has substantially deteriorated, 34 CFR 682.402 (e)]. Stafford, PLUS, and
SLS loans disbursed (given to you) after January 1,1986, can be canceled under two
additional circumstances:
- The school you attended improperly certified your ability
to benefit from the training given.
- b. The school you attended closed while you were in attendance or within 90 days
after you withdrew from the school.
In addition to the above reasons, a National Defense Student Loan can be canceled
if you enter into full-time teaching or military service. A National Direct Student
Loan and a Perkins Loan can be at least partially canceled under two more additional
circumstances: becoming a Head Start Program Staff Member or a Peace Corps Volunteer.
A Perkins Loan can be at least partially canceled under 5 different additional circumstances:
- As a Peace Corps or VISTA Volunteer.
- As a full-time law-enforcement or corrections
officer for loans received after 11-29-90
- Entering a full-time teaching position
- Becoming a full-time nurse or medical technician for loans disbursed after 7-23-92
-
As a full-time employee of a public or private nonprofit child or family services
agency
- If your loan was disbursed after 7-23-92
Taxability of Student Loan Repayment and Forgiveness
The amount eliminated under loan forgiveness or repayment programs may be considered
taxable income in the year received. In other words, if you have $5,000 in loans
forgiven next year that may increase your taxable income in the eyes of the IRS
by an equivalent amount. While that's never fun, it shouldn't discourage you from
using one of these programs since the benefit far outweighs the cost.
To avoid having your student loan forgiveness or employer repayments be subject
to taxation, your student loan must specifically include provisions allowing it
to be forgiven. These provisions must require you to work within certain professions,
for certain employers, for a specified minimum amount of time.
Additionally, any loan repayments made under the National Health Services Corps
(NHSC) Repayment Program or any state program eligible for funds from the Public
Health Services Act are considered tax-free.
Back to Top
What does it mean to default on a student loan?
For federally guaranteed student loans under Title IV of the Higher Education, a
default occurs when you fail to make payments on your loan for (a) 180 days if you
repay in monthly installments or (b) 240 days if the payments are due less frequently.
During the time that you are behind in your payments, your lender must exercise
"due diligence" (make repeated efforts to find you and contact you about repayment)
in attempting to collect the loan from you. If the lender is unsuccessful, it will
usually place the loan in "default" and turn it over to the "guaranty agency" in
your state. Lenders may "accelerate" a defaulted loan, which means that the entire
balance becomes due in a single payment.
Once your loan is assigned to a guaranty agency or the U.S. Department of Education
for collection, several steps, including the following, may be taken to recover
what you owe:
Credit bureaus may be notified [under 20 U.S.C.1080 or 20 U.S.C. 1087cc (c)] and
your credit rating may suffer.
- The IRS (under 34 CFR 30.20-30.33) may withhold your tax returns.
- You may be subject to an Administrative Wage Garnishment where the Department of
Education (under 20 U.S.C. 1095a), will require your employer to forward 10-15%
of your disposable pay for repayment.
- The Department may take legal action to force you to repay.
Once a loan is declared in default, you are no longer entitled to any "deferments"
or "forbearances". In addition, you may not receive any additional Title IV federal
student aid if you are in default on any Title IV student loan.
Back to Top
How can I escape default?
There are generally three things to do to avoid or escape defaulting on a student
loan when you are unable to pay.
- Cancel or discharge (end your obligation to repay) the loan
- Renew or consolidate the loan into a new loan.
- Temporarily stop making payments.
Back to Top
Who qualifies for discharge due to school closure?
If your school (or the branch which you attended): Closed while you are still either
enrolled or on an approved leave of absence, or you withdrew from the school within
90 days of its closure, you may qualify for discharge. 34 CFR 682.402 (d). After
the school closed, you must not have completed the program of studies through a
"teach out" at other school or by transferring academic credits or hours earned
at this closed school to another school.
A school's closure date is the date when it ceased offering all programs, not when
it stops offering the particular program in which you were enrolled. The Department
of Education determines the closure date, which you can find out from Department's
Cumulative List of Closed Schools. The Department's list is not always accurate
so you may have to prove an earlier closing date by newspaper accounts, correspondence
with the school, etc.
If your loan is discharged, you will owe no more payments, you will get a refund
of past payments. Moreover, the servicing agency will tell credit reporting agencies
that the loan was discharged. Any bad credit history should be deleted. You can
now apply for more federal student financial aid. The full criteria for a closed
school discharge may be found at 34 CFR 682.402 (d).
Back to Top
Who qualifies for discharge due to false certification?
If you were admitted to a school in without a high school degree after 7-1-87, you
are generally able to get a false certification discharge. The Department will find
the school falsified your ability to benefit in the program unless you did one of
the following:
- Passed an "ability to benefit" test approved by the Department (or prior to1991
by an accrediting agency) that was administered properly.
- Successfully completed a program of developmental or remedial education provided
by the school.
- Enrolled before 7-1-91 and received at GED before completing
your program of instruction.
If your loan is discharged, you will owe no more payments, you will get a refund
of past payments. Moreover, the servicing agency will tell credit reporting agencies
that the loan was discharged. Any negative credit history should be deleted. You
can now apply for more federal student financial aid. The full criteria by which
borrowers may qualify for a false certification discharge may be found at 34 CFR
682.402 (e).
Back to Top
Once I have defaulted, is there any way to
reinstate the loan?
Yes. The Department of Education offers "Loan Rehabilitation" program. If you make
12 consecutive monthly payments, which are both reasonable and affordable, the Department
will agreed to reinstate the loan. You would then be eligible to have the loan purchased
by a bank or other lending institution. Once a loan is rehabilitated, it will be
taken out of default and the credit bureau reports made by the servicing agency
will be deleted. You will be able to repay the loan over a nine year period. You
will again be eligible for additional Title IV student financial aid funds.
In regards to Private Student Loans it works quite differently. Most finance companies
have slightly different rules concerning defaulted student loans. Once the loan
goes into default, depending on the length of time the loan stays defaulted, the
lender will eventually give up efforts to collect, and ultimately the loan will
be sold. At that point, a new finance company by whom the loan was purchased will
yet, again attempt to collect the outstanding debt. This process repeats itself,
until the lender realized that there is absolutely no hope to collect and files
legal action against you. Can defaulted private student loans be eventually reinstated?
Most of the time it is up to the creditor to decide. If a creditor sees a potential
to reinforce the payment plan on the defaulted loan, the chances are that the loan
will be taken out of default.
Back to Top
If I cannot discharge my loan and cannot afford
the payments, what can I do?
The federal government offers two types of consolidation loans to allow students
for students to combine different types of federal loans to reduce and simplify
payment. The two programs are a Federal Family Education Loan (FFEL) and the Federal
Direct Consolidation Loan (hereafter, Direct Loan). Generally, the Direct Loan offers
more generous terms for the borrower.
The Direct Loan is designed for those who can afford to repay their existing student
loans. Borrowers make monthly payments based on yearly family incomes. Borrows with
family annual incomes of less than $900 above the poverty level need not make any
payment on the loan.
Once you get the loan, the old loans disappear. You are eligible for new loans,
grants, and deferments. You will no longer be listed as in default on credit records,
and will not be subjected to tax intercepts, garnishments, or other collection efforts.
The Direct loan has several advantages over the FFEL. Included are:
- The Direct Loan offers lower payments than a FFEL.
- Borrowers with Direct Loans may be in a better position than those with FFELs in
seeking deferments.
- Direct Loans offer somewhat lower interest rates over the
life of the loan that those offered by a FFEL.
Some Direct Loan borrowers, due to their low incomes, may be making no or very low
payments. These low payments may not cover accrued interest. The amount of the loan
is increased to include the unpaid interest. After interest is charged on the accrued
interest, the loan balance can increase significantly. There are some positive features
of the Direct Loan program; however, than offset some of these negative facts. They
are:
- Borrowers may seek loan deferments during which period, the government pays the
accrued interest.
- A cap is placed on interest to keep it under control.
- After 25 years of
payments (even if payments were zero over the entire time period) the loan is forgiven.
However, periods of deferment or forbearance, during which the borrower is excused
from making payments, are not counted. Note: when the loan is forgiven, the amount
of the loan has to be counted as income on your tax return.
When it comes to Private Student Loans, the situation yet again shifts in lenders
favor. Private finance companies do not offer benefits such as the ones described
above. In another words, private companies don't care if you employed, unemployed,
or living at the poverty level. The only thing they're concerned with, the fact
that some time ago, you needed to pay for your education, and you desperately wanted
to fund it, therefore, you came to them and they were kind enough to take you under
their wing. So, the time to pay back under their terms had come, and they don't
care whether you capable to repay or not, they want their money back, and according
to the agreement, they want it now! "Pay us back or we will take your last underwear!"
This is the typical philosophy of a private lender.
Back to Top
Are there disadvantages to getting a consolidation
loan?
There are some disadvantages to getting either type of federal consolidation loan.
As noted above, you may be able to bankrupt your student loan seven years after
the first payment became due. A loan consolidation may start the seven-year time
period running again. Moreover, if you are considering challenging the loan, a consolidation
loan may waive some defenses if you later contest the loan in court. If you believe
you may be going to court to fight against a loan, or are considering bankruptcy,
you should consult a lawyer before applying for consolidation.
Another disadvantage of consolidation is that while you cure the default by consolidating
a loan, your credit continues to show that at one point you were in default. . If
you "rehabilitate" a loan instead (see above), any reference to the default is removed.
Also after consolidation collection fees become part of the loan principle.
Back to Top
Is there any way to temporarily stop making
loan payments?
There are two ways to temporarily stop making payments and/or to avoid a default.
You may request the Department of Education to grant you a "deferment" which allows
you to stop payments (and stop interest from accruing as well). You must meet specific
criteria in order to qualify for a deferment. You may request the guaranty agency
for a forbearance of payments for short period when poor health or personal problems
which affect your ability to pay. Interest continues to accrue during forbearance.
Back to Top
What are the criteria for obtaining a deferment?
There are two sets of standards for obtaining deferments. The old standards applied
to loans disbursed before 7-1-93. The new standards which are somewhat more generous
applied to loans disbursed after 7-1-93.
Some of the more important grounds for deferral of loans disbursed prior to 7-1-93
are:
- Unemployment (maximum of two year deferment.
- Full-time student at participating
school.
- Active duty status in the U.S. Armed Forces.
- Receiving or being
scheduled to receive service, under a program designed to rehabilitate disabled
individuals. Temporary total disability.
- Providing nursing or similar services
to a spouse who is temporarily totally disabled.
- Parental leave.
- Being
a mother of preschool children, and earning not more than $1.00 above the minimum
wage.
The standards for loans disbursed after 7-1-1993 is somewhat more generous. The
maximum unemployment deferment period is increased from two to three years. The
old three-year deferments for specified types of financial hardship ( temporary
total disability, taking care of a disabled dependent, parental leave, and mother
with preschool children making slightly more than wage, etc.) are placed by a new
three-year deferment category called "economic hardship". If you receive public
assistance, you automatically qualify. If you do not, the Department will apply
a complicated formula to decide if you qualify.
Back to Top
How can I obtain forbearance on my loan?
The Department encourages lenders to grant forbearance if you are in poor health
or other personal problems affect your ability to make scheduled payments. Forbearance
is not as helpful as a deferral because interest continues to build while the loan
payments are reduced or postponed. The size of the outstanding debt could actually
increase during a forbearance period. However, forbearance is available even the
loan is in default. Seeking forbearance would allow you to avoid default during
the time in which you cannot afford to make payments.
Lenders must grant forbearance when your debt exceeds 20% of your gross income and
you submit a written request. Under those circumstances a lender must grant forbearance
for one year and shall renew it for a second and third year under certain conditions.
Moreover, the fact that you are granted forbearance cannot be the cause of a negative
credit report and no fees can be charged. Unfortunately this right is limited to
loans held by lenders. It does not apply if the loan has been taken over by guaranty
agency or the Department.
Back to Top
Addressing Your Defaulted Student Loan
http://www2.ed.gov/offices/OSFAP/DCS/index.html
Back to Top
What is Secured debt VS Unsecured debt?
Secured debts are debts that are linked to some type of property that you own securing
payment for the creditor by giving them the property if you default. For example,
mortgages are secured debts because if you default on the loan, the bank can claim
your house. Other examples of secured debts are auto loans, boat loans, and home
equity lines.
One type of secured loan is a nonconsensual lien where a 3rd party has legally placed
a lien against your property because of nonpayment of your debts to them. For example,
if you owed taxes to the IRS, they could put a lien against your property meaning
that you could not sell or transfer the property without paying your debt to them
first. You could also have a lien put against your property if you hired a contractor
to add a room on to your house and then chose not to pay them. They would have the
right to legally put a lien against your property.
Unsecured debts are debts such as credit cards and cash advances where there is
no collateral if you default on the loan. Credit cards, student loans, medical bills,
lawyer fees, rent and/or utility payments and health club memberships are a few
other examples of loans that are generally unsecured.
Will my credit score become affected upon successful settlement?
Student Loans Escape debt settlement plan may affect your credit score in a number
of ways. As previously mentioned, credit reporting bureaus will report all of your
credit accounts registered in our program as "settled" with no further balance,
releasing you from all further obligations. Some other factors will similarly impact
your global credit score, making it imperative to deliberate about the long-term
impact of the debt settlement plan and options available to your disposal. In another
words, for instance, the debt settlement process may negatively impact your payment
history. Though, the impact may be so minor if you've been late in making recent
payments. Nonetheless, settlement usually has a positive effect on another element
that balances your credit score: the total amount outstanding. By the time the settlement
process comes to an end, consumers occasionally see their credit score increase,
since now they have less debts or no remaining debts at all.
Back to Top
Is it OK to use my credit cards throughout
the settlement process?
Yes, it is absolutely ok to use other cards during the settlement process. However,
Student Loans Escape strongly recommends that our customers enroll all of their
unsecured debt in the negotiation process. Sometimes creditors may be unwilling
to settle for less than the full amount owed if they realize that a client has an
active credit account.
Back to Top
Would it be possible to restore credit and
obtain new credit card, a loan or a mortgage?
A typical client who usually makes an inquiry in regards to this subject is actually
a perfect candidate for debt settlement program, because of their dedication to
restore their financial future. Upon completion of the debt settlement program,
unlike before, creditors will have the following characteristics to consider; ability
to pay back the note, and unlike before, limited trustworthiness. It may be possible
to begin reestablishing credit by applying for a secured credit card first. Once
a creditor notices that you've gained financial control once again, it would be
much easier to yet again obtain an unsecured credit card or a loan.
Back to Top
Why can't I negotiate my own debts?
Despite the imaginary savings that some consumers think that they may end up with,
you certainly can. At the end of the day it pays to have an expert do this type
of job. In the beginning it may seem as easy as installing a new dishwasher or fixing
a flat tire. But unfortunately, once the process begins, the situation rapidly shifts
due to lack of expertise and complete understanding of the key elements, now, it
is no longer a simple task. We're experts at what we do; similarly, anyone of us
can be a professional at many other different occupations or artistries, for that
reason, let's give each other a chance to do a job the way it should be done. After
years of experience, doing the same thing day after day, we've established a steady
blue print that had been proven many, and many times over again, and again. Subsequently,
during the process, wen had established friendly terms with collection cycles, Federal
and State laws and internal policies that move credit and collection businesses.
Above all, the credit and collection industries work with us. We strive to get the
job done!
Back to Top
What is the difference between debt consolidation
and debt settlement?
A debt consolidation program pools all of your existing debt from various finance
companies into a new debt financed by a single company. You may wonder how this
option may benefit you. Answer is relatively simple, it will not! Under debt consolidation
plan, in most cases, a consumer transforms unsecured debt into secured, by financing
existing debt through a home equity, using home as collateral. A lot of times a
debt consolidation agent would try to assist by looking for a various ways to obtain
a loan large enough to cover your existing debt. Realistically, the chances of obtaining
an unsecured loan large enough to cover existing debt, is fairly small. Simply due
to the factors such as, the current economic situation in the country. Most banks
would not feel comfortable lending to an individual with a lot of existing unsecured
debt, therefore even if someone would be willing to take extra risk, the interest
rate would be significantly higher. Unfortunately, an alternative to using home
as collateral many times do not exist. Instead of providing debt relief, these programs
usually create more debt, and the ultimate goal is actually different than a debt
relief program. For instance, debt consolidators many times collect compensation
twice, from a client as well as the lender who issues or services the loan. Something
the client may know nothing about.
Back to Top
Will I continue to get harassed by collectors
even during the settlement program?
StudentLoansEscape attempts to make every effort to end creditor harassment. Nonetheless,
we would rather have them redirect their attention to us instead of you. Although
the law requires that creditors are obligated to stop continued harassment if you
instruct them not to spam mail or call, StudentLoansEscape cannot guarantee to prevent
creditors who disregard the law. Please be aware that a creditor may eventually
transfer your account to an outside collection agency. By law, the agency can legally
continue to contract you, both in writing or by phone. StudentLoansEscape team will
make every effort to influence them to work with us instead of harassing you.
Back to Top