Questions and Answers
Q: How do I qualify?
A: FlexDebtSolutions settlement program is for people experiencing financial hardship. Qualification is based in part on the type of debt you have and your ability to make comfortable monthly payments to satisfy those debts in a reasonable period of time.
Q: What is Financial Hardship?
A: Financial hardship is the inability to meet your current monthly payment obligations due to one of the following examples: a loss of income, medical emergencies, death of a member of the household who provided financial assistance, divorce, etc. One of our debt consultants can help you determine what your particular hardship may be.
Q: Can I qualify without a financial hardship?
A: Yes! You may still qualify for the program, although FlexDebtSolutions does not advocate that any person default on their debt obligations. If any of the following apply to you, then contact a DeptHelp consultant to discuss your particular situation:
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Falling behind, transferring balances, or otherwise juggling payments
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Incurring late fees
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Experiencing interest rate increases
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Receiving creditor calls
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Becoming overwhelmed by debt
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Envisioning a financial problem in the near future
Q: Is my information confidential?
A: Yes. You can rest assure that we keep all information absolutely confidential and that we do not share any information with any third party not crucial to your program.
Q: What kind of debt can be negotiated?
A: As a general rule, any type of unsecured debt can be successfully negotiated. Unsecured debt is debt that is not tied to a specific material item that could be repossessed by the creditor.
An automobile loan, for example, is considered secured debt since it is tied to a specific automobile and the creditor could legally repossess the vehicle should the borrower default on the loan.
Examples of unsecured debt include credit card debt, medical bills that are in collections, department store cards, signature loans, other unsecured lines of credit, and revolving charge accounts. All of these can be included in our debt negotiation program.
One main exception of unsecured debt that may not be included in our program is student loan debt. In most cases, student loans are government-backed and cannot even be discharged in a bankruptcy proceeding. (Of course, private student loans that are not sponsored by the government can be included.)
Q: How will debt settlement affect my credit?
A: Your credit score is likely to decline upon entering a debt settlement program. The amount it will decline will vary depending on your prior credit history. The accounts you place in the program will be reported as unpaid accounts to the credit bureaus and this will have an adverse affect on your credit score. However once you complete the debt settlement program, your debt-to-income ratio will improve so you should see your credit worthiness improve.
Q: Can I still use my credit cards?
A: NO. All credit cards in the program will not be active and you will not have credit privileges. Any cards you DO NOT put into the program should be used for business, family, or emergency purposes only. This program is for you to get out of debt, and not to incur more debt.
Q: Can Flex Debt Solutions stop my creditors from calling?
A: NO. Your creditors have every right to try and contact you in order to collect a debt. However, we have been successful in helping clients eliminate most harassing telephone calls. If your account is in collections; collections agencies have to adhere to the FDCPA Guidelines. FlexDebtSolutions will do the work to contact the collection companies and notify them that they are in violation of any part of the FDCPA and request that they stop all calls immediately. If you would like to learn more please read the Fair Collection Practices Act.
Q: Does Flex Debt Solutions repair my credit?
A: NO. Companies cannot remove legitimate negative items from your credit report. Negative items will remain on your credit report according to the conditions imposed by the credit reporting agencies. The goal of a Debt Settlement program is to settle your delinquent accounts. When a delinquent account is settled, this is reflected on your credit report. A settled account is better than an unresolved delinquent account. Your credit score should improve after successfully completing our program.
Q: Can I be sued?
A: YES. Your creditors certainly have the right to sue to recover their money. 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.
Q: Can creditors garnish my wages?
A: YES. However, this can be a long process for the creditors. The creditor first has to sue you, successfully obtain a judgment, and then file for a garnishment action. If you’re willing to work with your creditors, wage garnishment can normally be avoided.
Q: What are the tax consequences?
A: Your creditors will report cancelled/settled debts exceeding $600 to the IRS and you are required to report the same as income on your annual tax return. However, the IRS permits you to write off any “income” from canceled debts up to the amount by which you were “insolvent” at the time. You need to consult your own tax advisor for advice specific to your situation.
Q: How will Flex Debt Solutions settle my debts?
A: You will be asked to put aside and save a set amount of settlement funds on a monthly basis. This amount will be determined in your initial analysis based on your total amount of debt and will be in line with your income and expense budget. Each person's situation is different and the negotiation process will begin at different times depending on the amount of your debt. Once the creditors agree to a settlement amount, we will present this offer to you. If you approve of the settlement, we will instruct the creditor to fax over the ‘settlement offer’ in writing. We will then conduct a 3-way recorded conversation which will include you, the creditor, and FlexDebtSolutions in order to work toward settling the account. Debts can be settled in two different ways: one lump sum or a term settlement. One lump sum is just that; one payment and the account is paid. A term settlement is a settlement which is paid over an extended period of time until the account is paid. FlexDebtSolutions then moves through each debt until all of your debts have been paid and you are debt free.
Q: Can't I negotiate my debts with my creditors on my own?
A: YES. You can try to negotiate your debts with your creditors on your own. If you were to be successful in getting them to cooperate with you, it may cost you less in the long run. There are many pit falls in negotiating debt and the unsuspecting person is likely to fall into those pitfalls.
You should note, however, that the Debt Settlement process can be a long and complex process for the average consumer. Our debt negotiators have the skills and knowledge of how your creditors negotiate and they have many years of experience negotiating the largest debt reductions. You don't have to spend all of the time and effort trying to negotiate with your creditors because you can rely on our experience to get the best debt reduction possible for you.
Q: How long does Flex Debt Solutions debt settlement program take to complete?
A: The length of time it takes to complete the debt settlement program varies depending upon your ability to acquire the funds to satisfy your debts. FlexDebtSolutions will work with each individual client to get them out of debt in the shortest time possible.
Q: What if a creditor won't negotiate?
A: In the course of business, we have established contacts with the major banks, collection agencies, and collection attorneys. Debt settlement is recognized as a viable solution by collection industry professionals, and at FlexDebtSolutions we pride ourselves on the professional reputation we have established by dealing fairly with creditors. In the rare instance where a creditor balks at accepting a reasonable settlement at the time it is proposed, it is often a matter of simply waiting for a different phase of the collection process. Some creditors are more inclined to play "hardball" than others, but virtually all of the major institutions eventually sell their accounts to collection agencies in order to get what they can for the account. Since the collections agencies acquire these accounts for pennies on the dollar, they are more inclined to accept a reasonable settlement offer, which still represents a profit on their purchase.
Q: How does debt settlement compare to debt consolidation?
A: In debt consolidation programs, the debt consolidator makes one loan to you to pay off all your debts. You are charged interest on this debt consolidation loan and in some cases you are still required to pay interest to your creditors. As a result, with debt consolidation your principal debt balance often remains the same and you remain years away from becoming debt free. With FlexDebtSolutions debt settlement program, our highly skilled negotiators work on your behalf to significantly reduce your debt. In most cases, our debt settlement program allows you to pay only a fraction of what you owe and helps you resolve your debts, often within only months.
Q: Will interest and late fees continue to accumulate?
A: Yes. Interest and late fees will continue to accumulate while you are in the debt settlement program. However FlexDebtSolutions will be negotiating on the original balance that you came into the program with. So the sooner a person gets into the program, the lower the balance will be to settle. Dropping out of a debt settlement program will have an adverse effect on your credit card balances.
Q: How does debt settlement compare to bankruptcy?
A: Bankruptcy was designed to be a consumer's last resort and has a devastating effect on your credit rating that lasts for seven to ten years. Debt settlement is an effective alternative to bankruptcy that provides you with financial freedom without the long-term effects and social stigma associated with a bankruptcy.
Q: Will all of my debts be eliminated when I complete your debt settlement program?
A: Yes. At the end of the program, you can expect to have zero balances on all unsecured accounts that you've contracted FlexDebtSolutions. to settle. You will still be responsible for your secured debts i.e. mortgages, auto loans, etc. and any and all unsecured debts that you did not retain us to settle.
For any questions that you may have that is not addressed in this questions and answers page, please contact a representative at FlexDebtSolutions for your answers. There is no obligation to utilize our services in order to help you make an informed decision.
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