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FAQ
How do
I qualify?
Debt settlement
is not for everyone. It requires a solid commitment to becoming
debt free over a specific period of time (average 2-3 years) until
payment is complete. A one-on-one, confidential consultation with
one of our specialists will help you determine if debt settlement
is right for you. Go to the home page and fill out the form to have
a Debt Analyst get in contact with you to discuss our program.
What is
the difference between unsecured debt and secured debt?
An unsecured debt relies only upon your promise to repay
(and the promise of co-borrowers and/or co-signers as well) the
debt. The most common types of unsecured debts are credit cards,
department-store cards, medical bills, and personal (signature)
loans. A secured debt relies upon collateral or security for a secondary
source of repayment if you fail to repay. The most common forms
of secured loans are home loans (mortgage and equity line-of-credit),
car loans and RV loans. Once default takes place, the creditor's
recourse is usually to foreclose on a home or repossess a vehicle.
A quasi kind of "secured" loan is a student loan. It's
really a "guaranteed" loan, but the guarantor is usually
the State or Federal Government. Because the lender can get guaranteed
repayment, we cannot negotiate student loans.
How long
will it take to settle to my debts?
The time required to settle all your debts depends upon
your specific financial situation, including the amount of debt,
your income and expenses. One of our Debt Analysts can provide you
an estimate during your free consultation. Typically, clients are
able to settle all their debts within three years.
What are
the fees for your service, and when are they due?
We offer a free 15-20 minute consultation, during which
a Debt Analyst will provide you detailed information on both services
and fees. We work with you to provide a manageable payment schedule
and do not require upfront deposits like many other Debt Settlement
companies. Keep in mind that we typically are able to reduce our
client’s debt by up to 40-60%!
Can my creditors
still contact me if I am in a Debt Settlement Program?
USDH contacts your creditors (in addition to any involved
collection agencies and attorneys) strategically and advises them
to direct all collection efforts to our company. Timing on contacting
your creditors is crucial to the settlement and in some cases it
is better to contact your creditors later then sooner…Experience
in knowing when to this is paramount to the settlement process.
Our client relations department will advise you on how to handle
your creditors and will help you through the entire program.
How is my
credit affected?
Part of our negotiation process is to request that creditors
reflect your accounts as having been paid or having been settled,
with zero balances. One assessment factor that creditors use in
evaluating an individual’s or entities credit-worthiness is
their debt-to-income ratio: the amount of debt compared to income.
Because our Debt Settlement Program reduces your debt, your debt-to-income
ratio will improve. Additionally, attempting to resolve a debt through
settlement is looked upon more favorably than filing bankruptcy.
How Does
Debt Settlement compare to Debt Consolidation and Consumer Credit
Counseling?
In our Debt Settlement Program we negotiate with your creditors
to settle your debt for amounts significantly less than you owe;
typically for 40-60% of your outstanding balances, saving you money
on debt principal and interest which provides you the opportunity
to pay-off your debt faster.
Debt
consolidation is merely converting the total of all your debts into
a single debt that represents the total of them all, which you must
still pay off. Moreover, what often happens is that once the credit
cards are paid off via a consolidation loan, there is available
credit to the consumer and the temptation to use the credit cards
again is too much. Many people end up with double the amount of
debt they began with! Even worse, many debt consolidations are secured
by the borrower's home which turns the unsecured debt into a secured
debt.
Consumer
Credit Counseling Agencies claim to be non-profit agencies that
for an 8-15% fee paid by the creditor can lengthen the term of your
debt and reduce some of your interest. Your outstanding debt principal
is not reduced and you may be charged additional fees by the CCC
agency. This approach is typically a longer-term approach to debt
resolution, compared to debt settlement.
What about
bankruptcy?
Bankruptcy is everyone's option of last resort. Because
it's a last resort, there is never a time when it does not remain
one of your options. For this reason, it is not something that needs
to be rushed into. Bankruptcy carries with it significant social
stigma, and the devastating effects on credit last up to 10 years,
and sometimes longer. Even when you can obtain credit, such as for
a home or car, you are likely to pay higher rates. Over the life
of a home loan, the added interest can add up to more than the amount
of the debt discharged in bankruptcy. Debt settlement is bankruptcy
prevention!
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