Frequently Asked Questions
Q. How do I qualify for this program?
Our program is designed for individuals who can no longer afford their monthly obligations to their creditors. This may have resulted from increased interest rates, rising monthly payments, job loss, income reduction, death in the family, divorce, health problems, etc… Our program then allows you to have only one affordable monthly payment that will be much lower then your current payments. You must be able to save some money each month as we work to reduce your balances.
Q. How do I pick a trustworthy debt settlement company?
The two questions above are both ways to separate trustworthy companies from the bad ones. Any company trying to charge all their fees in a shorter time frame then 12 months is a major red flag. Any company that wants to take possession of your money in their separate bank account is a great reason to run the other direction. Our company negotiators have passed the International Association of Professional Debt Arbitrators exam, this should be a must. Finally, make sure the company name and website look professional. If the company name sounds amateur, so will the results. You will never find a better name than USA Debt Professionals. Our name shows that we operate on a national level and you can be confident we will provide great results.
Q. How does debt reduction affect my credit score?
You will see a V shaped downward slope and recovery through our program. Your credit will go down during the first year as you begin your savings and are not making payments to your creditors. However, your credit will begin to rise again as we eliminate debts all together. Every time a debt gets eliminated you will see improvements in your credit as your balances are reduced to zero. Your credit affects your ability to obtain loans; debt ratio is just as important. At the end of our program your debt ratio will be significantly better as you will go from having debt to having none. If you’re having trouble getting approved for a loan now, then your credit might not be the only problem. By lowering your debt ratio we will put you in a much better position to obtain new loans.
Q. What are the fees associated with the program?
Our costs are determined on an individual basis depending on your unique situation. Once we know your creditors, balances, and living expenses we can calculate an affordable monthly payment to eliminate your debt and provide you with a detailed proposal for all costs involved. We have no hidden fees and spread them over 17 months to ensure that you know we are in this for the long haul and to help you become debt free.
Q. Who controls the bank account used for saving funds for creditors?
You do. Beware of any company that suggests otherwise as additional fees will be incurred by you. We believe in having you stay in control and saving you the most money.
Q. How does debt reduction compare with credit counseling?
Read the “Your Choices” page on our website for the answer and look at the illustration of our results compared to credit counseling.
Q. How does debt reduction compare with bankruptcy?
Read the “Your Choices” page on our website for this answer.
Q. Is there regulation in the debt settlement industry?
Absolutely. Especially when you operate on a national level like USA Debt Professionals. Laws vary from state to state and make it impossible for any company to operate in all 50 states. We do operate in a majority of states and are in the process of becoming licensed in more and more states. Call us to find out if we are currently operating in your state.
Q. Should I put all my credit cards in the program?
This is up to you. You may keep one card open for emergency use only. However, you will have to stop using any creditor accounts enrolled in our program. Creditors will not lower balances on open accounts and our purpose of this program is to help you become debt free. We can’t help you become debt free if you are still charging on your accounts.
Q. Will I be totally debt free when I’m done?
Our program is focused on dealing with your unsecured debts; such as credit cards, medical bills, and unsecured personal loans. Once you have completed our program and have eliminated all of your unsecured debt, you will have extra money each month to spend how you like. You may use this to pay down your auto loans, mortgages, or other secured debts that are not part of our program.
Q. Will I receive phone calls from creditors?
There are federal and state laws designed to protect you from creditor harassment. However, the fact is that most of our clients experience some collection calls. Our goal is to have your creditors contact us and not you. We will work with you to minimize any calls that get through to you. In addition, we will work with you to make sure violators of collection laws, including the Fair Debt Collection Practices Act (FDCPA) are appropriately handled.
Q. Will I owe taxes on my forgiven debt?
The IRS considers a forgiven debt as taxable income, which means they will expect taxes paid on the settlement. (Form 982) is available for certain hardship situations that may exempt you from this tax. You may also be exempt if you are able to claim insolvency. Either way, you must consult a tax advisor to get specifics on this issue as we are not authorized to give tax advice.
Q. Does interest and late fees accrue on my accounts?
USA Debt Professionals will not be able to stop a creditor from adding interest or late fees to an account. However, your individual program already has taken these fees into account when we accepted you into our program. Because we negotiate the debt down to a fraction of what you owe, your savings are far greater than any interest or late fees that could accrue.
Q. Could I negotiate on my own?
Not unless you are willing to sacrifice a great deal of time and effort. Dealing with creditors can be extremely taxing on your mental attitude. The creditor’s job is to upset and frustrate you to the point that you will pay them whatever just so they will go away. This results in most individuals spending hours and hours only to obtain a result much worse then USA Debt Professionals would have received. Because we have experience and know what a good and bad offer truly are, we will help you achieve much better results while you don’t have to spend all the time consuming hours. By choosing our professional team you can focus on healthier thoughts while we take on the task of negotiating with your tough creditors.
Q. Will the 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 (meaning we will try to resolve it first, before moving onto your accounts). 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 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.
Q. When do negotiations with creditors occur?
We will notify your creditors within the first 90 days of enrollment to begin communications with us and stop contacting you. The actual negotiation activity is limited to the amount of money you have saved up in your account. Most, but not all, creditors prefer to only negotiate when they know funds are available to settle the accounts. For this reason, most settlements are not reached until the first 6-9 months which does depend on your account balances and specific creditors. In some instances it may take more than 9 months before the first settlement is reached. Once again, you may add more money to your savings account at any time and we will speed up our negotiation efforts accordingly.
Q. Are there guarantee’s that my accounts will be settled 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. Any company that claims to guarantee specific percentages should raise a red flag. We will utilize our technology, leverage, and experience to save you the most money possible as we work only for you.
Q. What if my creditors refuse to settle?
We refuse to work with some creditors and notify you upfront so those creditors will not be included in our program. There are very few instances where a creditor will refuse to settle. As with any negotiation, there are offers and counter-offers and given time, and in the majority of cases a settlement is reached. Creditors realize that settlement is in their best interest because if a debtor files for bankruptcy, most times the creditor will be left with nothing.
Q. How do I find out the progress of my debt settlement?
Call or e-mail your customer service representative directly. If you cannot reach your representative, please call our toll free number at (800) 430-8636 and press 3 for current clients, you will then be able to speak with someone immediately to address all of your needs and concerns.
Q. How long does it take to become debt free?
This all depends on the amount of money you can save each month. The more money you are able to save, the quicker you can become debt free with our program. There is no prepayment penalty, so any additional funds you have may be added to your savings at any time and we will speed up our negotiation efforts accordingly.
