In order to better educate our clients on our program and financial matters in general, we have compiled this list of frequently asked questions and their answers.

Q. Why would my creditors be willing to accept less money that what I actually owe them?

Because your debt is unsecured they essentially are left with little or no choice. They are left with the option of you filing for Bankruptcy and them receiving nothing or they can take a loss and at least recoup a portion of what they lent to you. Our negotiators have a personal history of dealing with major creditors and lenders that have come to realize that clients who are enrolled into our debt reduction program are more likely to fulfill the settlement amount than clients whom are not enrolled into our program.

Q. How does this affect my credit?
If you do not make required minimum payments to your creditor you may be breaking the terms of your agreement with them and your actions will probably be reported to consumer reporting agencies as a late, delinquent, charged-off or past due balance. This is true whether or not you have enrolled in a Debt Settlement Plan. Depending upon the condition of your credit report at the time of enrollment, a Debt Settlement Plan may have an adverse effect on your credit report and credit score. Our goal is to get you out of debt for the lowest cost, in the shortest period of time without declaring bankruptcy. It is also important to keep in mind that your payment history is only one factor in determining your credit rating or credit score. There are many other factors. For more information, you should go to http://www.myfico.com or http://www.experian.com.

Q. Do you settle with my creditors?
We regularly do settlements with all of the major banks and large collection agencies. There may be some smaller banks, credit unions, collection agencies, hospitals and/or medical offices that we have not yet worked with. This usually is not a problem. When we encounter a new creditor, we contact them and let them know whom we are and what we are trying to accomplish. Once new creditors understand our program they are usually very willing to work with us.

Q. How is the service fee paid, are they paid upfront?
Our fees are not charged upfront – instead they are withdrawn from your new settlement savings account each month. Typically our fees are spread out over a period spanning 15-24 months. All fees are included in the one monthly savings amount that our account executives will quote to you. Keep in mind that the amount of the fee and the time period over which it is charged may change depending on the state you reside in and the individuals’ specific set of circumstances.

Q. Should I put all of my credit cards in the program?
If you have one card with a low balance that you can quickly pay down to zero, then you may hold onto it for emergencies. However the program will generally not work unless you enroll all of your high balance (greater than $500) credit card accounts. As you can imagine, it makes it difficult for us to negotiate with your creditors if they can see that you are negotiating on some accounts but not others.

Q. Who controls the bank account where I am saving funds for creditors?
You do. The bank account is set up in your name and the money in the account is your money. The reason why we recommend keeping it in a new account that is separate from your existing bank accounts, is that in our experience, this separation dramatically increases (by a factor of 2-3 times!) the probability that you will succeed in RI’s program. RI’s fees are deducted from this account each month, according to the Agreement that you sign with us. But the accumulated savings in the account are owned by you.

Q. Will I owe taxes on my forgiven debt?
The IRS considers a forgiven debt as taxable income, so at the end of the year, they will expect taxes to be paid on the settlement. The IRS, however, has a form (Form 982) available for certain hardship situations that may exempt you from this tax. Please contact a tax advisor to discuss this issue further.

Q. Do interest and late fees accrue on my accounts?
If you let your accounts go delinquent, your creditors will continue to add interest and late fees onto your balances. Typically, your balance will increase until a settlement is reached. Keep in mind that the interest is going to accrue regardless of whether you make minimum payments or not. RI’s goal is to negotiate substantial reductions to the balances on your accounts, even after the interest and late fees have accrued.

Q. Will the creditors continue to call me?
No company can stop all of the creditor calls, so if a company claims they can, be very careful! Your creditors do have a legal right to call and try to collect the debt from you. However, there are several things we do to combat and eliminate roughly 95% of these phone calls. We will supply you with a creditor call script so if a creditor does call you can be assured of what you need to say to them before offering them our phone number. We will also provide you with a cease and desist letter to send to your creditors so they are informed that you have enrolled into our program and to contact us directly to work out a new payment arrangement.

Q. Could I negotiate on my own?
Yes you can. You can also do your own taxes and repair your own car, but most people choose to seek help. Most people prefer to leave these tasks to experienced people who earn their livelihood as specialists in those lines of work. Our team of debt negotiation specialists has only one job - negotiating reductions on our clients’ unsecured debts, each and every day of the week. Our knowledge and experience puts us in the best position to stand up to your creditors and fight for the best settlement possible. Remember, you are going against a professional collector who makes a living off of collecting debts and may not take an individual as serious as a professional negotiator who is officially representing the client.

Q. Do you begin negotiating with my creditors right away?
Except when dealing with certain difficult creditors, we generally contact your creditors right away (typically within approximately 1-2 weeks of your joining our program) to let them know that we have Limited Power of Attorney and to request that future collection calls come to us and not you. The actual negotiation activity is typically very limited until you have saved up enough in your settlement account to make reasonable offers to your creditors. Most (but not all) creditors do not want to spend time negotiating an account unless they know there are funds available. The first settlement typically happens in month 6 to 9 of a client’s program (this varies greatly and depends on your monthly savings amount and the number of creditors you have enrolled in the program as well as the balance of each individual account). In some instances it may take more than 9 months before the first settlement is reached.

Q. Will my debts be sent to a law firm? Will this result in a lawsuit?
Creditors do have the right to send debts to third party collection agencies and/or law firms in order to collect a debt. If this happens, we will continue to negotiate on your account and will treat the debt as a priority creditor. Based on our actual experience, it is a small percentage of cases on which lawsuits are actually filed. When this does happen, usually the purpose of the lawsuit is to force a settlement. We will continue to negotiate to settle the debt, although the settlement percentages are often higher than typical “non-legal” settlements. If a lawsuit is filed before you have saved up enough funds to negotiate a settlement, we will seek to resolve the account by putting it on a long term payment plan for 100% of the balance. Please note, we are not a law firm and cannot provide legal advice or legal representation. We can refer you to a company that provides this service through their network of attorneys, or you can hire your own attorney.

Q. Will my credit card accounts be closed if I enroll them into a debt reduction program?
Yes, the accounts that you choose to enroll into the debt negotiation program will be closed. It is impossible for us to obtain settlements from your creditors if you are still using the accounts and making timely payments.

Q. Do you guarantee that you settle all of my debts for a certain percentage?
No. Every case is a negotiation, and there is no guarantee how the negotiations will wind up. Furthermore, the success of our negotiations is highly dependent on your ability to save a specified amount each and every month you are in the program.

Q. Will entering your program repair my credit?
Yes. Although the process of Debt Settlement can have an initial negative impact on your credit score, your credit score will eventually move to the upside when your debt is eliminated. Not to mention that RI will work on your credit report to have any negative remarks removed as part of our Credit Restoration Service. This includes any negative remarks that may have incurred from the very beginning of your credit history. This service is ABSOLUTELY FREE to those individuals who enroll in our Debt Settlement program and have at least $10,000 of qualified debt, and is offered as an additional or stand alone service to all others.

Q. How long does it take to enroll into your debt reduction program?
Once you have discussed your financial situation with our consultants you can immediately enroll into the debt reduction program that best fits your needs and start benefiting from lower monthly payments and eliminating this debt.