A: We will combine all of your unsecured bills in our program and determine an affordable payment amount. You personally hold these payments in a holding account. We do not send monthly payments to your creditors. As your payments build up in the holding account, we negotiate settlements with your creditors. These settlements can range from 20%-80% of the outstanding balance. As the program continues and funds become available, we continue to settle with each creditor until the program is completed and you are “DEBT FREE”.
Q. Who qualifies for the debt settlement program?
A: Anybody who has at least $10,000 in unsecured debt and is enduring a financial hardship. Your personal settlement consultant will review your situation to determine if you are going to qualify.
Q. Which of my debts can be included in the program?
A: Most unsecured debts can be included. An unsecured debt is any debt that does not have property or any other sort of physical item attached to the loan as collateral. The most common types of unsecured debts are credit cards, personal loans, collections, judgments, repossessions, and hospital bills. Auto loans and home loans are not admissible to the “Debt Relief Program”.
Q. How will this affect my credit score?
A: In order for the program to be successful, your accounts will first have to age before the settlement process can begin. As this process begins, your credit score will reflect that accounts are not being paid monthly (due to your hardship). When you complete the program, all of your accounts will be listed as 'settled' with the credit reporting agencies. Your credit report will not show that you needed help in repaying your debts nor will it show that you enrolled in a debt settlement program. Accounts will likely report “settled at a lesser amount”. Once accounts are paid with a 0-balance your debt load will have lightened which can improve scores over time.
Q. How long does the program take to complete?
A: The length of the program will be determined by the payment you choose. Our program lengths range from 12-36 months. Your debt specialist will work with you to determine your payment amount.
Q. What are your fees for this program?
A: American Debt Solution program fees are included in your monthly payments and are based on the total amount of debt we are managing. We also receive nominal compensation based on the percentage savings you realize on each account that we settle. This offers our company an incentive for obtaining the best possible settlements available. Please refer to the client services acknowledgement and agreement form included in this package. We’ve found our fees are aggressive compared to our competitors and the actual total savings realized by our clients far out weighs the cost of enrollment.
Q. What if my creditors refuse to negotiate a settlement?
A: Although a settlement is not guaranteed, almost all creditors are willing to work with us. Our settlement staff works with your creditors on a regular basis to find the best possible way to settle the account. Creditors who are willing to cooperate and settle at the lowest rates will be paid first. If we are unable to settle on any account you will obviously not be charged as we charge only 15% of your net savings. You will also be refunded a prorated amount of your monthly maintenance fee charged.
Q. What happens if I want to pay more/less than my monthly payment?
A: Changes can be made to your scheduled payment with at least 5-business days notice. We encourage you to use extra funds from tax returns, holiday bonuses, etc. This will allow you to complete the program in less time. It is possible to reduce your monthly payment as well. This will add to the length of the program.
Q: What do I do about creditors continuing to call once enrolled?
A: It is likely that if your account is with the original creditor they will continue to contact you for a time. You will be instructed to take detailed notes in your creditor call log once you have enrolled. This allows your settlement coordinator to negotiate on your behalf with accurate information. ADS will provide any collectors with instruction to cease and desist contact with you upon request.
Q: What happens to the difference of what my account paid settled at and what was owed at the time of settlement?
A: The saving you realize at the time of settlement will be written off by the creditor. This means that the creditor will agree to forgive you for the amount they lost, and write the amount off as a loss on their financial statements. These losses are tax deductions for the creditors in many cases. Many debt settlement companies don’t disclose the fact that the creditor has the right to issue a form 1099 to you in the amount of your savings. This form requires you to report the amount saved as income on your personal tax return. Creditors don’t always provide these forms, but they do have the option. Please consult your accountant if you have questions about any potential tax implications of debt settlement.
Q: You mentioned sponsoring us for a consolidation loan that would allow us to settle our accounts and pay them off prior to the program’s completion......what do we have to do in order to qualify for this loan?
A: Upon enrollment in the “Debt Relief Program™” you will begin making installment payments into your settlement trust account. Your credit specialist will work with you to improve your credit profile and increase your sponsorship level. This will help you qualify for a better personal loan. It is important that your payments made into your settlement account are made on time. Your credit specialist will inform you when you will have the option to pay off debts and exit the program early. (This normally occurs within 6 months if all payments are made on time when depositing into your trust account. Please contact your credit specialist with any additional questions or concerns.
