Debt Settlement Program

A Debt Settlement Program is a process where a company negotiates with your creditors to settle your unsecured debts (like credit cards) for less than the amount you owe. This can be a faster way to get out of debt compared to making minimum payments.

How Does it Work?

1. Enrollment: You sign up and provide us details about your debts. We develop a plan for you and set you up with our partners.
2. Dedicated Savings Account: You set up a dedicated savings account where you deposit a monthly amount. This money accumulates to pay off your settled debts.
3. Legal Protection: Our legal protection plan will have your back if creditors decide to take a more aggressive stand to collect on the debt.
4. Negotiation: After you have saved some funds into your dedicated account we negotiate with your creditors, aiming to reduce the principal balance you owe and stop the interest.
5. Settlement: Once a creditor agrees, your savings in the dedicated account is used to pay the agreed-upon amount, and the debt is considered settled. You receive a letter confirming the settlement.
6. Credit Impact: Debt settlement can negatively impact your credit score due to late payments and settlements appearing on your report. However, your ability to take on new debt may improves as your debt to income ratio gets better.

Things to Consider:

• Fees: The plan has monthly fees for the dedicated account and the legal protection plan. On settling your debt our fee is a percentage of the enrolled balance. 
• Debt Collection: While negotiations are ongoing, your accounts may be sent to collections. You need to to take steps to protect your privacy and report harassment from creditors to the Legal Protection Plan.
• Tax Implications: Settled debt may be considered taxable income. Consult a tax professional for clarity.
• Alternatives: Explore other debt relief options like a debt consolidation loan or credit counseling. We can explore these options with you.

Resources:

• Arizona Attorney General’s Consumer Protection Guide
• New Mexico Attorney General’s Consumer Protection Guide