What is Debt Settlement and Debt Negotiation?

Debt settlement or debt negotiation is a process by which a debt settlement company works directly with a consumer’s creditors to negotiate a reduced principle balance repayment of unsecured debts.

What is an unsecured debt?

Unsecured debt is a debt that did not require collateral to incur. Examples of unsecured debt include: credit card debt, store card debt and unpaid medical bills.

Who is qualified for our program?

DRN’s debt settlement program is only for people facing financial hardship and difficulties. This means people who are late on paying their debts or have little or no ability to pay their debts, as structured, and could face potential bankruptcy.

Who is NOT qualified for our program?

This program is not designed to negotiate debt for people who have reasonable means to pay off their debt. If you have the ability to pay your debt you should honor your agreement with your creditor.

Who is eligible for a debt settlement program?

Debt settlement is most appropriate for those facing the following situations: Have a financial hardship, are late paying their unsecured debts, have no ability to make payments in the future, as structured, bankruptcy is their only other choice.

Examples of qualifying hardship are: Loss of income, medical emergency, death of a family income earner, divorce, and increased interest rates and/or minimum payments to the point of creating negative cash flow.

Can I negotiate directly with my Creditors?

Yes, you may be able to negotiate with your creditors. Because DRN has been around since 2000 it is advisable to let DRN handle this. You can also perform surgery, but for best results you would probably want to go with an experienced doctor.

Are there other Debt Relief Options?

Yes. Debt Settlement is not appropriate for all consumers seeking debt relief. Please talk to a DRN counselor regarding all options in your quest to become debt free.

Does debt settlement have a negative impact on my credit?

While participating in a debt settlement program, your credit score may be negatively impacted. Your credit report may reflect the fact that you have ceased paying your creditors. Furthermore, upon completion of a debt settlement program a debt settled for less than the full amount of the amount owed may result in a negative notation on your credit report. Please visit http://www.myfico.com for further information about credit ratings

Can I still use my credit cards?

All credit cards in either program will not be active and you will not have credit privileges. On a very limited basis, you may keep credit cards out for emergency purposes. A certified Debt Counselor can guide you on what is feasible and what is not.

Will the Debt Settlement Company make payments to my creditors?

No, monthly payments will not be made to your creditor by DRN. The individual consumer is responsible for saving sufficient funds, pursuant to your plan, to ensure that funds will be available for you to release to your creditors once a settlement has been secured

Will my accounts continue to accrue interest, late fees and penalties?

Yes. Enrollment into our program for debt settlement does not freeze or otherwise stop the accrual of interest, late fees and penalties. Your individual program will reflect the additional fees and interest and is incorporated into the Settlement Plan.

Can my creditors still contact me after enrolling into a Debt Settlement Program?

Enrolling into our program will not automatically stop your creditors from contacting you. In most states your original creditors continue to have the right to attempt to contact you to collect on delinquent accounts. However, in some states these calls can be stopped from original creditors as well as calls from third party collectors.

Do you guarantee that you settle all of my debts?

We cannot guarantee that your debt will settle for any particular percentage within any particular time period, or that we will be able to settle any of your accounts at less than full value.

Any individual creditor may use a number of different criteria in determining that creditor’s willingness to settle a debt or the amount acceptable in settlement, including, but not limited to the amount of the debt, the current status of the debt, the reasons you are seeking debt settlement, the debt settlement program, the type of debt, and the amount of your disposable income.

Can I be sued?

This question is really aimed at settlement. Your creditors have the right to recover their money, so yes, they can sue. But usually, the purpose of the lawsuit is to force a settlement on the matter. In our experience, most creditors would rather not go to the expense of suing and simply try to negotiate a settlement.

Does DRN offer legal advice or assistance?

DRN does not under any circumstances provide legal advice.

What are the tax consequences?

A creditor can report cancelled/settled debts exceeding $600 to the IRS and you would be required to report the same as income on your annual tax return. However, the IRS permits you to write off any “income” from cancelled debts up to the amount by which you were “insolvent” at the time. You need to consult your own tax consultant for advice specific to your situation.

E-mail: info@debtreliefnetwork.com