Frequently Asked Questions

What Is Debt Settlement?
 
Debt Settlement, also known as debt negotiation, engages a personalized strategy that enables a debt settlement negotiator, often a law firm, to negotiate with creditors to settle unsecured debts for less than the amount owed. Once the creditor, negotiator, and our client agree on a reduced balance and that lower balance is paid, it will be viewed as payment in full. Debt settlement has become a practical alternative to bankruptcy for thousands of consumers across the country. It is also very important to remember, Debt Settlement does not stop collection efforts from taking place and does not eliminate credit card debt overnight. The debt was not created overnight, so it naturally makes sense that it will not be taken care of overnight.
 
CredEx is committed to referring clients to a law firm that will best meet your unique financial needs, so you can move on with your life. The Customer Care team will negotiate your unsecured debt and reach the lowest settlement available. It is important to note, if payments stop to creditors, balances will continue to grow because of late fees and ongoing interest. 

Is Debt Settlement Right For Me?
 
For many, the outrageous interest rates the credit card companies charges makes it difficult to resolve debt by making the minimum payments. With a debt settlement program, people have the opportunity to modify their spending habits and focus on a solution that will guide them to a better financially stable life. While every case is unique, debt settlement or debt negotiation generally can be completed in 36-42 months or less with payment plans you can afford.

Without a doubt, during the debt settlement process, questions will come up. When this happens, please do not hesitate to call your Settlement Coach. We are here to help you reach your goal and are available to answer any questions that you have.

Q. How long does it take to complete the Settlement program?

A. We understand that each individual's situation is unique, and our referring attorney will take every detail into consideration when planning a personalized debt settlement program that works within your budget. The length of time to complete the program varies with each individual and this will be reviewed in full during the qualification consultation. The average client will complete the program in approximately 36-42 months, depending on their financial and personal situation. Your Enrollment Agent is available to go over all of your concerns and questions when you call for your initial qualification consultation.

Q. How is debt settlement different from debt consolidation?

A. The names sound the same, but there is a considerable difference. Debt settlement may decrease your debt balance*. Your results may vary based on negotiations and agreements with creditors with which the Debt Negotiation Team have established relationships. Debt consolidation programs combine all your outstanding debt into one lump sum, and  lowers interest rates and fees, in most cases. Debt settlement generally takes around 36-42 months to complete with lower monthly payments, because your debt may be reduced, although your results may vary and no outcome is guaranteed.

Q. Do I have to combine all my debts, or can I pick certain debts to settle?

A. The choice of settling some or all of your debts is completely yours. Your Enrollment Agent will review the strategies are best for you during the qualification process. We typically suggest settling all unsecured debt, as any activity on your credit report can negatively affect the negotiation process.  

Q. What's so bad about filing bankruptcy?

A. Bankruptcy may seem quick and simple, however many people file for bankruptcy each year failing to realize they are forced to deal with the harsh effects that will affect them for the rest of their lives. You must first be aware that bankruptcy does not go away after 7-10 years, as some bankruptcy attorneys may imply. In reality nearly all credit applications ask if you have ever filed bankruptcy, and to answer falsely is a federal offense. Also, costly court and lawyer fees accompany the process of filing for bankruptcy, with changes in Bankruptcy laws; many consumers will not be able to eliminate their debt simply by filing for Chapter 7.

Consumers may now be required to file Chapter 13, which requires you to pay back a portion of your debt under the supervision of the court. This process may last for years. Bankruptcy should be considered one of the last options in solving financial problems, however  you should always consult with an attorney regarding such matters.

Q. What kind of team do I have working for me at the referral attorney firm to settle my debt?

A. The firm that you will be placed with creates lasting relationships with their clients based on trust and support. They are very familiar with the difficulties and stress that financial problems cause. Our dedicated team of knowledgeable Enrollment Agents have experience dealing with personal debt and will present you with facts that will help you make informed decisions. 

Q. How does the IRS treat debt that is forgiven?

A.  We recommend that you consult your tax advisor regarding your particular circumstance. Financial institutions are generally required to provide a Form 1099-C in the event that a forgiven debt amount exceeds $600.00. Please understand that if you receive a Form 1099-C showing income in the form of canceled debt, this does not necessarily mean that you owe taxes on the forgiven portion of the debt. In most cases consumers can legally and ethically exclude forgiven debt from their income through the "insolvency exclusion" provided by the IRS code. This exclusion means that your liabilities exceed the fair market value of your assets, or in other words, you "owe" more than you "own". They will also be able to assist you on filling out Form 982 that excludes you from the particular debt.

Q. Who is holding my money while I'm waiting on a settlement?

A. Your funds should be held at a third party account, referred to by many as a “trust” account or “special purpose account” which is FDIC insured. This account should always be in your name with you having ultimate control over its funds regardless of the terms of your settlement program. If the firm tells you to save money on your own, the likelihood of graduating from your program historically has proven very minimal. Any reputable debt settlement firm endorses the special purpose account as the most effective method of client savings.

Q. Does the firm make monthly payments to my creditors for me?

A.  No, you are responsible for all payments to Creditors, including settlement payments. The firm only collects its fees on a monthly basis and you are responsible for any payments to creditors through your trust account, as advised by your Settlement Coach.

Q. Is it wrong for me to avoid creditors' calls?

A. It is your right to accept or not accept unwanted calls. If you have advised your Creditor that you are unable to make a payment and they continue to call, and your circumstances have not changed, then what would the purpose be of talking to them? We leave the decision up to you.

Q. Does the firm have control of my savings?

A. No, the firm does not have any control over your savings and never acts as an intermediary when it comes to your funds. The only money the firm ever receives from you is the fee you agreed to.

Q. Does debt settlement affect my credit?

A. Yes, there will be an adverse effect on your credit report while in your debt settlement program. All debt settlement programs will have a negative impact on your credit report and you should be VERY cautious of any firm that tells you to the contrary.

Q. Can I be sued by my creditors?

A.  If you fail to make payment to your creditors, they may take legal action against you.

Q. Does the firm contact my creditors?

A. Yes. At the appropriate time the firm will contact your creditors to begin debt negotiations.

Q. How do I know if I qualify for your CredEx Choice debt programs?

A. Anyone with at least $5,000 of unsecured debt automatically qualifies for our debt relief programs. If you are seeking to rid your life of this financial and spiritual burden, simply complete the fast track information request "quick form" located in two areas on the home page of this website which is the best alternative so one of our skilled advisors can begin the familiarization process regarding your situation. You can also call for immediate assistance at 1.800.646.6146 Ext. 705 and one of our expert debt solution advisors will contact you right away.

Q. Is my information kept confidential?

A. Yes. We treat your personal information as we would treat our own. For a more thorough review of our strict standards of confidentiality, read our privacy policy. Confidentiality is held in the highest regard and will in no way ever be compromised when working with CredEx Choice advisors.

Q. Is Bankruptcy Right For Me?

A. There are two types of bankruptcy Chapter 13 and Chapter 7. Generally speaking, both types of bankruptcy could be an effective option to resolve your financial situation. For more information on what to know before seeking out a personal bankruptcy, go to www.FTC.gov for more information.

What is a Chapter 13 bankruptcy?
This means you may keep a mortgaged house or car. Rather than surrender property, you may pay off your debts over three to five years.

What is a Chapter 7 bankruptcy?
According to the FindLaw.com this type of bankruptcy allows for most unsecured debts (debts that are not guaranteed by collateral) to be wiped out.  Some of your property may be seized and sold to pay off some or all of your debts, please seek the advice of an attorney for more information.

How does a credit counseling program differ from Chapter 13 bankruptcy?
Credit counseling is voluntary for both you and your creditors.  All creditors may not waive interest, lower your payment, or waive fees.  In a Chapter 13 bankruptcy, it becomes public record. The court will administer the plan and all interest will be stopped.

How long does a bankruptcy stay on my credit report?
Under the Fair Credit Reporting Act - a federal law - a bankruptcy can remain on your credit report for up to 10 years.
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If I don't have the money to pay for an attorney to file for bankruptcy, what should I do?
You can contact the local bar association, legal aid services, or a university law school with a legal assistance program for a referral to an attorney.

Can I be fired for declaring bankruptcy?
According to The Bankruptcy Code generally prohibits termination of employment or discrimination with respect to employment solely because an individual (1) has filed a bankruptcy case, (2) has been insolvent before the case was filed, or (3) has not paid a discharged debt.

**CredEx Choice does not provide legal advice, and always suggests you speak to an attorney.

List Of Questions

Did You Know?

There are 7 things you should do to decide upon debt settlement, debt consolidation or credit card settlement vs bankruptcy.

The CredEx Choice Team wants to ensure that YOU know everything about YOUR options regarding debt settlement, debt consolidation and credit card settlement process!

Our team of debt relief experts is always here for you and will considerately talk you through every step of the way and answer any questions you may have!

1.Check your credit report: Find out what negative items (such as late payments, collections, charge-offs, etc) you have on your credit report and on which accounts you still owe money. This will help you determine the extent level and nature of your indebtedness.

2.Calculate your total debt: Determine how much you owe in total. Add up the outstanding balances on your credit
accounts including those which are in collection.

3.Calculate income from all sources: Determine your total monthly income including paycheck, bank savings, rental
income, alimony/child support, investment returns, etc.If your income doesn't exceed the amount paid towards your basic financial needs including housing expenses, utility bills, gas, groceries, etc., then you shouldn't go for
settlement. This is so because you can hardly save anything to settle your bills with a lump sum payment after a certain period of time.However, if you've thought of filing bankruptcy, calculate your average monthly income for past 6 months (gross monthly income divided by 6) preceding the month you file bankruptcy. The average monthly
income is compared to your state median income to find out whether you qualify for Chapter 7 or 13. Moreover, you need to find out whether you can afford the costs of filing bankruptcy.

4.Check and see if you qualify for settlement: You need to have a certain amount of outstanding balance so as to make a settlement company negotiate with creditors on your behalf. However, this qualifying amount may vary from one company to another.

5.Find if bankruptcy can erase all your dues: It is essential that you verify whether bankruptcy can wipe out all
your bills. Not all your bills can be discharged through bankruptcy. So, depending upon your outstanding balance on each account and the type of bills you have, bankruptcy may or may not be the right option for you.

6.Know the consequences of filing bankruptcy: You should be aware of the consequences of filing bankruptcy. A
bankruptcy affects your credit score by 200-250 points depending upon what other negative remarks you have on your
credit report. It stays on one's credit report for 7-10 years. This is why you may have problem in getting qualified for new credit (such as credit card, mortgage to buy a home, etc) in the next few years. Moreover, if you file Chapter 7 bankruptcy, it may require you to sell your home or car provided they don't qualify for the Federal or State exemptions. Thus, it is better to avoid bankruptcy.

7.Find out if settlement can hurt your credit: If you choose to settle your bills, you're likely to trash your credit score. That's because you may have faced late payments or collections on your accounts prior to asking for a settlement. Stop payments drop down your credit score by 50 points or more depending upon how many payments you've missed and what negative listings you have on your credit report. But there are easy ways to repair your credit after settlement.

In certain cases, you can save your credit from being trashed even after settlement. This is possible when creditors or collection agency agree to report your account status to the credit bureaus as "Paid in full" or when they sign on a pay for delete agreement. Under this agreement, once you settle an account, your creditor or collection agency removes the account listing and any negative remark from your credit report. This saves your credit from getting a hit.

CredEx Choice Has Been Working With Debt Burdend Individuals for Over a Decade & We Take What We Do Very Seriously!