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.
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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.
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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.
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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).
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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.
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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.
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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.
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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.
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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.
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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:
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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.
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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.
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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.
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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.
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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.
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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.
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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.

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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).
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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.
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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.
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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.
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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.
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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.
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Addressing Your Defaulted Student Loan
http://www2.ed.gov/offices/OSFAP/DCS/index.html
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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.
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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.
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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.
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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!
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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.
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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.
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†Estimates are based on historical results and individual results may vary, including the ability to save sufficient funds to complete your program, the creditors in your individual portfolio, and underwriting guidelines. Statements made are examples of past performance, which are not intended to be a guarantee of any future settlement results. When you contact StudentLoansEscape.com we will attempt to understand your situation and determine whether you are qualified for our debt resolution programs. StudentLoansEscape.com assists with unsecured debt only and any use of “debt free” only applies to accounts that are successfully enrolled and upon program completion. While our programs work aggressively to reduce your debt balances, creditors are under no contractual obligation to negotiate or accept settlement offers. Debt reduction percentages do not include program fees; guarantee that your debt balances will be lowered by a specific amount or percentage, or that you will be debt free within a specific time period. However, if at the completion of your debt resolution program your total debt reduction equals less than two (2) times the amount of fees paid, we guarantee to refund a portion of those fees. This refund is calculated so that your fees will never equal more than one-half (1/2) of your total debt reduction. This fee guarantee does not apply to consumers referred to debt resolution programs utilizing attorney-based negotiations. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice and we do not provide credit repair services. Please contact a tax professional to discuss tax consequences of debt settlement. By providing your contact information, you agree to receive return telephone calls, emails or other communications from StudentLoansEscape.com and/or its affiliates and expressly waive any “No Call” preference or registration. Photographs used are not actual clients. Not available in all states. Read and understand all program materials prior to your enrollment.
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PRIVACY POLICY MAY CHANGE FROM TIME TO TIME. WE ENCOURAGE CHECKING BACK FOR UPDATES.

 

We take responsibilities and your privacy seriously at Debt Escape Inc., ("Debt Escape Inc."). We have a solid commitment to providing first-class service to all our clients and visitors of our Web-site. At Debt Escape Inc. we respect your concerns about privacy. This Privacy Policy divulges how we gather, protect, utilize and share information collected about you on this website. When you use this web-site you unambiguously agree to the terms and conditions of the Privacy Policy in effect at the time of your use. We believe that this disclosure will provide help in increasing your confidence in our site and enhance your overall experience. In order to comply with industry standards and regulations implemented typically by the Federal and State Governments, we accept the following privacy policy.

 

The security of your personal information is very important to us. In an effort to protect your personal information, we use Secure Sockets Layer (SSL) technology with 128 bit encryption. If your browser supports SSL (most current browsers do), it will automatically encrypt the information you provide to us on the secure pages on our site, before sending it over the Internet. This website does not collect personally identifiable information from your computer when you browse this website and request pages from our servers. This means that, unless you voluntarily and knowingly provide us with personally identifiable information, we will not know your name, your email address, or any other personally identifiable information. Personal information such as your name, email address and other details you choose to disclose, are collected when you submit a request for information, a comment, register to receive the newsletter, register for our forums or when you submit personal details for any other reason, e.g. information left within a comment or forum post, etc. Personal information is not collected without your consent.

 

Cookies

 

When you visit our site, we will ask your browser to place a permanent "cookie" (a very small text file) on your computer. If your browser is configured to accept cookies, it will accept the cookie and place it on your computer's hard drive. We collect this information to analyze where our customers are coming from and how often they visit our site. We also collect certain technical information from your computer, like your IP address and the address of a referring web site, if any. This information will allow us to enhance our site to our customer's preferences. This information is used only for the benefit of Debt Escape Inc. and you, our customer.

 

You can visit our site without cookies if you choose to do so. However, please be aware that some features of the site may not function properly or may be slower if you refuse cookies. To visit our site without cookies, you can configure your browser to reject all cookies or to notify you when a cookie is set. Check the browsers help menu to learn how to change your cookie preferences.

 

Log Files

 

As most Web sites, we gather certain information automatically and store it in log files. This information includes internet protocol (IP) addresses, browser type, internet service provider (ISP), referring/exit pages, operating system, date/time stamp, and click stream data.

 

We use this information, which does not identify individual users, to analyze trends, to administer the site, to track users' movements around the site and to gather demographic information about our user base as a whole. We do not link this automatically-collected data to personally identifiable information.

 

Information We Gather and Its Purpose

 

We may collect your personal information if you decide to purchase one of our products or retain our services, participate in our affiliate marketing program, subscribe to our newsletter, complete an application form, participate in one of our surveys or transact other business with us. We need to collect personally identifiable information from you to execute the requested transaction, provide you with a particular service, and/or to further enhance your account. At anytime, we may ask you to voluntarily supply us with additional information needed. We will ask you for information such as, but not limited to: name, current and/or billing address, your e-mail address, telephone number, your Social Security number and certain other personal information, such as your date of birth, address, employment information, and certain credit card and loan account information. We may use your email address to send a confirmation and, if necessary, we might use the other information to contact you for help in processing.

 

In addition, when you provide contact details for transaction requests such as scheduling an appointment or requesting a proposal, we may use the contact information to keep you updated about future offers or promotions unless you opt-out online or otherwise notify us. Under no circumstances will Debt Escape Inc. sell or share your personal information with any person or organization ("third party") except: as authorized by you, our participating lenders, agents, and debt management firms depending on the application you fill out and the information you request.

 

We may also use the information we collect about you in order to, but not limited to: • learn more about your interest in the products or services we offer and provide you with information; • enroll customers who desire our services • open customer files and establish their accounts • provide customer service • negotiate settlement of our customers' debts (according to the terms and conditions of their written agreements) • learn how to improve our products or services • provide opportunities for our affiliates and other companies to inform you about the products or services they offer that may interest you • to share aggregated statistical data with our business partners or for public relations. For example, we may disclose that a specific percentage of our users are between the ages of 25 and 35. This information is not disclosed to third parties.

 

Disclosure of Information to Participating Providers of Services

 

We may disclose a consumer's personally identifiable information in order to effect or carry out any transaction that you have requested of us or as necessary to complete our contractual obligations with you. WE RESERVE THE RIGHT TO SELL, RENT OR TRANSFER YOUR PERSONAL INFORMATION TO our participating providers, as authorized by you, which include: lenders, agents, and debt management firms FOR ANY PURPOSE IN OUR SOLE DISCRETION. We prohibit the sale or transfer of personal information to non-affiliated entities for their use without giving you the opportunity to opt-out (See Opt-Out below). We may share your personally identifiable information with affiliated companies that are directly or indirectly controlled by, or under common control of Debt Escape Inc. We may send personally identifiable information about you to non-affiliated companies that are not directly or indirectly controlled by, or under common control of, Debt Escape Inc. The personal information collected on this site and by participating providers will be used to operate the site and to provide the services or products or carry out the transactions you have requested or authorized. We may change or broaden the use of your personal information at any time. We may use your personal information to provide promotional offers to individuals by means of email advertising, telephone marketing, direct mail marketing, banner advertising, and other possible uses.

 

Choice/Opt-out

 

We provide you the opportunity to 'opt-out' of having your personally identifiable information used for certain purposes, when we ask for this information. For example, if you purchase a product/service but do not wish to receive any additional marketing material from us, you can indicate your preference by emailing or calling us per the information contained on our contact page.

 

If you no longer wish to receive our newsletter, you may opt-out of receiving it by following the instructions included in each newsletter or communication or by emailing or calling us per the information contained on our contact page.

 

Customer Care Contact Information:

 

Debt Escape Inc.

 

Email: customerservice@studentloansescape.com

 

Additional Service Providers

 

We may use affiliates or contractors to provide certain clerical and information processing and shipping services on our site. When you sign up for our services, we will share only as much information as is necessary for the provision of those services.

 

These parties are prohibited from using your personally identifiable information for any other purpose.

 

Securing the Transmission and Storage of Information

 

The security of your personal information is extremely important to us. We employ generally accepted industry standards to protect the personal information submitted to us, both during transmission and once we receive it.

 

Our site uses security technology to protect information you provide to us through the site when entering sensitive information.

 

After information reaches Debt Escape Inc., it is stored on a secure server that resides behind firewalls designed to block unauthorized access from outside of Debt Escape Inc. You can help to maintain the security of your online transactions by not sharing your personal information with anyone. Remember, no method of transmission over the Internet, or method of electronic storage, is 100% secure. (Example: any information you provide us by email is not encrypted) Therefore, while we strive to use commercially acceptable means to protect your personal information, we cannot guarantee its absolute security.

 

Links to Other Sites

 

This Web site may contain links to other sites such as our affiliates which are not owned or controlled by us. Please be aware that this privacy policy only addresses our company's use and disclosure of your information collected on this site.

 

While we try to link only to sites that share our standards and respect for privacy, we are not responsible for the privacy practices of such other sites. We encourage you to be aware when you leave our site and to read the applicable privacy policies and terms of conditions of each and every Web site that collects personally identifiable information.

 

This privacy statement applies only to information collected by this Web site.

 

Co-branded sites

 

We may be co-branded with "partners and affiliates". These business to business relationships are helpful to us and to you as they afford all concerned with greater product and service opportunities. We always provide opt-out opportunities regarding the sharing of your information with such partners and affiliates. Please note the sites linked to our site are governed by their own privacy policies which may or may not reach the standards set by our company.

 

Access to Personally Identifiable Information

 

If your personally identifiable information changes, or if you no longer desire our product or service, you may correct, update, delete or deactivate same by emailing our Customer Care by contacting us by telephone or postal mail at the contact information listed below.

 

Customer Care

 

If you send us correspondence, including e-mails and faxes, we may retain such information in your customer file. Information you give us over the telephone may be noted for your file. We may also keep copies of any correspondence sent to you. We retain these records in order to provide the products and services you have requested and to measure and improve our customer service. We may, over time, delete these records as permitted by law. Phone calls may be recorded or monitored for customer satisfaction purposes.

 

Based upon the personally identifiable information you provide, we may communicate with you to provide the services you request, and to manage your account. We may communicate via email or telephone, in accordance with your wishes.

 

Legal Disclaimer

 

We reserve the right to disclose your personally identifiable information, as required, to comply with the law, applicable regulations, governmental and quasi-governmental requests, judicial proceedings, court orders or subpoenas, to enforce our Legal Notices or other agreements, or to protect our rights, property or safety or the rights, property or safety of our users or others (e.g., to a consumer reporting agency for fraud protection etc.).

 

Business Transitions

 

In the event our company goes through a business transition, such as a merger, acquisition by another company, or sale of all or a portion of its assets, your personally identifiable information will likely be among the assets transferred. You will be notified via e-mail and/or a prominent notice on our Web site for 30 days of any such change in ownership or control of your personal information.

 

Changes to this Privacy Statement

 

We reserve the right to modify this privacy statement at any time. We will not jeopardize your privacy. The provisions contained in this privacy statement supersede all previous notices or policies regarding our privacy practices with respect to this site. Any and all changes will be made here, to this privacy statement.

 

We encourage you to check our site frequently to see the current privacy statement to be informed of how we are committed to protecting your information and providing you with improved content on our website in order to enhance your online experience. Upon any material changes to the policy statement, we will post those changes to this privacy statement, the homepage, and other places we deem appropriate so that you are aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it.

 

Contact Us

 

If you have any questions, comments, complaints or suggestions regarding our privacy policy or our website, please contact us at:

 

Debt Escape Inc.

 

Email: customerservice@studentloansescape.com

 

PLEASE PRINT AND RETAIN A COPY OF THIS AGREEMENT FOR YOUR RECORDS
Terms of Use

 

Debt Escape Inc. provides "The User" with access to its content, resources, tools for communication, public forums, commerce platforms, and other services through its network of websites, "The Service". Debt Escape Inc. provides its service to the user, subject to the following Terms of Service.

 

Debt Escape Inc. is not responsible for providing you access facilities or equipment (in any form) to its service. You, "The User", also comprehends and concur that "The Service" may include advertisements and sponsorships and that these are necessary for Debt Escape Inc. to provide "The Service". You also comprehend and agree that Debt Escape Inc. makes no submission about the suitability, reliability, availability, timeliness, and accuracy of the information, products, services and related graphics contained within "The Service" for any purpose. "The Service" is provided "as is" without warranty of any kind. Debt Escape Inc. hereby disclaims all warranties and conditions with regard to "The Service".

 

THE SERVICE IS SUBJECT TO THE APPLICIABLE RETAINER AGREEMENTS AND LEGAL DISCLAIMER. ACKNOWLEDGMENT AND ACCEPTANCE OF TERMS OF SERVICE

 

"The Service" is provided to you, "The User", under the terms and conditions and any amendments thereto and any operating rules or policies that may be published from time to time by Debt Escape Inc. as part of the Terms of Service/Legal Disclaimer and related disclosures which are cumulatively included herein by reference. Debt Escape Inc. Terms of Service comprises the entire agreement between "The User" and Debt Escape Inc. and supersedes any prior agreements pertaining to the subject matter contained herein. BY COMPLETING THE REGISTRATION PROCESS AND CLICKING THE "SUBMIT" BUTTON, YOU ARE AGREEING TO BE BOUND BY THE Debt Escape Inc. Terms of Service, Legal Disclaimer and applicable terms of the Retainer Agreement.

 

MODIFICATION OF THESE TERMS OF USE

 

Debt Escape Inc. reserves the right to change any of the terms, conditions, and notices under which "The Services" are offered. You are responsible for regularly reviewing these terms and conditions, including changes/modifications if any incorporated by us from time to time. Your continued use of "The Service" constitutes your agreement to all such terms, conditions, and notices.

 

MODIFICATION TO "THE SERVICE"

 

Debt Escape Inc. reserves the right to modify or discontinue, temporarily or permanently, "The Service" (or any part of "The Service") with or without notice to "The User" at any time and from time to time. "The User" agrees that Debt Escape Inc. shall not be liable to "The User" or any third party for any modification or discontinuance of the Service.

 

USER CONDUCT

 

"The Service" may include e-mail services, message boards, chat areas, newsgroups, forums, communities and/or other message or communication facilities designed to enable you to communicate with others (collectively, "Tools for Communication"). You agree to use the Tools for Communication only to post, send and receive messages and material that are proper and, when applicable, related to the particular tool for Communication. You also hereby agree that you shall not make use of "The Service" for any commercial purpose, including reselling and/or co branding/private labeling.

 

As a condition of your use of "The Service" you, "The User", agree to provide: (a) true, accurate, current and complete information about yourself as required by "The Service's" registration form (such data being the "Registration Information, and Retainer Agreement") (b) maintain and promptly update the Registration Information to keep it accurate, current and complete. If you provide any information that is untrue, inaccurate, not current or incomplete, Debt Escape Inc. has the right to terminate the user account and refuse any and all current or future use of "The Service". (c) Debt Escape Inc. the right to use / disclose the aggregate registration information to third parties in connection with marketing of services, subject to the privacy policy. You have also consented Debt Escape Inc. the right to use your registration information to provide targeting of advertising and other service offers. This could also be used to customize the content you see, to fulfill your requests for certain products and services and to contact/inform you through e-mail or otherwise about special offers or new products.

 

Usage Obligations

 

As a condition of your use of "The Service" you will not use "The Service" for any illegal purposes. You will be solely responsible for the contents of transmissions made by you through "The Service".

 

You agree not to use "The Service" to: (a) Obstruct or hinder the use and enjoyment of "The Service" by other Users; (b) Violate any applicable local, state, national, and international laws and regulations; (c) Impersonate any person or entity, or falsely state or otherwise misrepresent your affiliation with a person or entity; (d) Interfere with or disrupt "The Service" or servers or networks connected to "The Service", or defy any requirements, regulations or guidelines of networks connected to "The Service"; (e) Transmit or otherwise make available any material in connection with surveys, chain letters, junk e-mail, spamming, contests, pyramid schemes, or any duplicative or unsolicited messages (commercial or otherwise); (f) Upload, post, e-mail, transmit or otherwise make available any content that is unlawful, damaging, intimidating, hostile, offensive, harassing, defamatory, improper, obscene, vulgar, invasive of another's privacy, caste related, ethnically or otherwise objectionable; (g) Upload, post, e-mail, transmit or otherwise make available any content protected by any patent, trademark, copyright or other intellectual proprietary laws unless you own or control the rights thereto or have received all necessary consents to do the same; (h) Upload files that contain viruses, worms, corrupted files or any other similar software or programs designed to disrupt, damage or limit the operation of any computer or telecommunications equipment or property of another; (i) "Stalk" or otherwise harass other users; collect or store personal data about other users. (j) Advertise, promote or offer to sell or buy any goods or services for any business purpose unless "The Service" specifically allows such messages or transactions. (k) Reproduce, duplicate, copy, sell, resell or exploit for any commercial purposes, any portion, use or access of "The Service". (l) Violate the Fair Credit Reporting Act, the Fair Debt Collection Practices Act or any other law, (m) Conduct any activity that would aid or assist terrorism or related activity or would endanger U.S. military personnel.

 

Debt Escape Inc. has no obligation to observe and monitor "The Service". However, Debt Escape Inc. reserves the right to review materials posted and to remove any material/s. Debt Escape Inc. also reserves the right to terminate your access to any or all of "The Services", at any time, without notice, for any reason whatsoever.

 

Debt Escape Inc. reserves the right subject to attorney-client privilege to the extent applicable and to the extent the same is not waived through these provisions, at all times to divulge any information as it considers necessary to satisfy any applicable law, regulation, legal process or governmental request, or to edit, refuse to post or to remove any information or materials, in whole or in part. These would be more applicable to the publicly accessible areas of "The Service" that are intended to be available to the general public. For example, publicly accessible areas of "The Service" would include message boards and chat rooms that are open to both registered users and visitors.

 

In view of the global nature of the World Wide Web, "The User" understands and agrees that technical processing of tools of communication is (and may be) required to send and receive messages, to correspond/conform to the technical requirements of connecting networks, to correspond/conform to the limitations of "The Service", or to correspond/conform to other, similar technical requirements.

 

User account, password and security

 

As part of "The Service's" registration process you will provide us with current, complete and accurate information as requested by the registration form. You will then choose a user name and password. You take total responsibility for maintaining the confidentiality of your password and account. You are also entirely responsible for any and all activities that occur under your account. You agree to notify Debt Escape Inc. immediately of any unlawful/unauthorized use of your account or any other security violation. You agree to ensure that you exit from your account at the end of each session. You understand that Debt Escape Inc. will not be liable for any loss or damage in any form incurred as a result of unauthorized usage of your account, with or without your knowledge. However, you could be held liable for losses or damages incurred by Debt Escape Inc. or a third party as a result of your failure to comply with this clause. You also agree not to use anyone else's account, at any time, without the prior permission of the account holder.

 

PRIVACY POLICY

 

Registration information and certain other information about you is subject to our Privacy Policy. For more information, see our privacy policy.

 

DISCLAIMER

 

Registration information and certain other information about you are subject to our Disclaimer. For more information, see our Legal Disclaimer.

 

LIMITATION OF LIABILITY

 

You expressly understand and agree that to the extent permitted under the RPC, Debt Escape Inc. shall not be liable for any direct, indirect, incidental, special, consequential or exemplary damages, including but not limited to, damages for loss of profits, goodwill, use, data or other intangible losses (even if Debt Escape Inc. has been advised of the possibility of such damages), resulting from: (i) the use or the inability to use the service; (ii) the cost of procurement of substitute goods and services resulting from any goods, data, information or services purchased or obtained or messages received or transactions entered into through or from the service; (iii) unauthorized access to or alteration of your transmissions or data; (iv) statements or conduct of any third party on the service; or (v) any other matter relating to the service.

 

CONTENT PROVIDED TO THE SERVICE

 

Debt Escape Inc. does not claim ownership of the "content" (in the form of data, text, software, music, sound, photographs, graphics, video, messages or other materials) you provide to Debt Escape Inc. (including feedback and suggestions) or post, upload, privately transmit, input or submit to any Debt Escape Inc. site or service for review by the general public. However, by posting, uploading, or making available content or any other material, you grant Debt Escape Inc. and its affiliate sites permission to use your submission in connection with the operation of their Internet businesses, including, without limitation, the rights to copy, distribute, transmit, publicly display, publicly perform, reproduce, edit, translate and reformat your submission, and to publish your name in connection with your submission.