Frequently asked questions
- Who qualifies for our program?
- What types of debt do you handle?
- Who isn’t qualified for our program?
- How does this differ from Consumer Credit Counseling?
- Is this like Debt Consolidation?
- What happens to my accounts when they’re part of this program?
- Do you begin negotiating with my creditors right away?
- How will you settle my debts?
- Who controls the bank account where I’m saving funds for creditors?
- Can I make major purchases while enrolled in the plan?
- Is bankruptcy a better option for my situation?
- How will Debt Settlement affect my credit score?
- Can I still use my credit cards?
- What will I pay for your services?
- Can I be sued?
- Can you stop my creditors from calling?
- Do you repair my credit?
- Will I be totally debt free when I am done?
- Can my wages be garnished?
- Can I negotiate with my creditors on my own?
- What are my tax repercussions?
- Do you guarantee that you’ll settle all of my debts for a certain percentage?
- How do I enroll?
- Can changes be made after enrollment?
Who qualifies for our program?
Our program is designed for people experiencing a severe financial hardship. People who are also unable to pay their debts, unlikely have the ability to pay their debts in the future, and are facing the possibility of bankruptcy. Qualifying financial hardships can include a loss of income, death of a household financial provider, a medical emergency, a divorce, or a lack of fiscal responsibility.
What types of debt do you handle?
Unsecured debt, which is debt not secured with collateral, is allowable in our program. These debts generally include credit cards, medical bills, unsecured or personal loans, retail debt, debt owed after repossession, accounts in collections, certain pay day loans, certain consumer finance loans, legal judgments, medical collections, and certain student loans. Contact a World Law Debt Settlement analyst today to determine whether your debts are a good fit for our settlement program.
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Who isn’t qualified for our program?
Our program is not meant for those who have the means to easily pay off their debts. However, if you find yourself unable to cope with mounting debts, we can successfully negotiate with your creditors. Our specialized consultants will help you develop an affordable payment plan, and our Attorneys will negotiate your debt directly with your creditors.
How does this differ from Consumer Credit Counseling?
Consumer credit counseling seeks to reduce your interest rates, meaning you pay 100% of your original balance plus a reduced interest rate. Their purpose is to get you to pay the debt in full by obtaining a lower interest rate. The major problems with credit counseling are that the monthly payments are often too high, and that it may still take at least five years or more to pay off the your debt. You should also know that these firms were established by the creditors! What it comes down to is that World Law Debt Settlement works for you, while the consumer credit counseling firms work primarily for the creditors! Engaging Consumer Credit Counseling services will affect your ability to obtain or expand credit.
Is this like Debt Consolidation?
No. With our debt negotiation program, our Attorneys negotiate on your behalf to reduce the amount you pay to your creditors. Debt consolidation requires you to apply for and obtain a NEW loan in order to pay off the entire amount of your existing debt. If you already have too much debt and/or bad credit, it’s very unlikely that you’ll be approved for a debt consolidation loan.
What happens to my accounts when they’re part of this program?
When you enroll in our Debt Settlement Program you may not use your credit cards. They’ll be closed by your creditors upon enrollment. The program is based on mutual respect between you and your creditors. They respect the fact that you’re moving forward to get out of debt. You show respect to them by not using the cards, or opening any additional accounts. You’re required to make no further payments to your creditors. Because they’re not receiving payments, the accounts will be closed.
Do you begin negotiating with my creditors right away?
We generally contact your creditors right away (typically within approximately 1-2 weeks of your joining our program) to let them know that we are representing you and will communicate and negotiate on your behalf. We also 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.
How will you settle my debts?
Our consultants carefully analyze your financial circumstances and work with you to determine a budget that is in line with your income, expenses, and total debt. The first thing we do upon your enrollment is send letters of representation from our law firm to your creditors. We inform them that we are now representing you in regard to your indebtedness with them. Also, they are to longer contact you with regard to those debts, as outlined by current debt collection laws. You will have an Attorney and a debt analyst assigned directly to you.
We then set up a joint use savings account that monies are deposited into every month by you so that we can negotiate down your debt. We as well send out initial settlement offers. Sometimes creditors take advantage of these early offers. Typically though, time becomes our ally. Our law firm will aggressively work with your creditors to negotiate down your outstanding debts as early in your program as possible. We inform you every time we receive a settlement offer from your creditors so that you can either approve the offer, or wait until they offer a better settlement. If you approve a settlement offer, we have your creditor send it in writing. You’ll receive monthly statements regarding the joint use account, access to our client portal, and you must approve all expenditures. So we work for you, but you’re still in control.
Who controls the bank account where I’m 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 accumulated savings in the account are owned by you, and you direct us to use those funds when you agree to a settlement.
Can I make major purchases while enrolled in the plan?
When enrolled in a Debt Settlement Plan, making major purchases can be complicated because your “credit worthiness” is more difficult for creditors to determine. Each lender is different, and can view your situation from multiple points of view. Lenders look at your overall financial wellness when assessing your creditworthiness. This can include your credit history, the cash you’re putting down for the purchase, as well as the type of loan you’re seeking.
Your ability to acquire new credit will be limited while you’re enrolled. This is primarily due to your accounts becoming delinquent. This is necessary in order for a creditor to consider a settlement amount. Your creditors won’t receive regular monthly payments. The only time a creditor receives a payment is when they’ve agreed to a settlement, which takes time.
Is bankruptcy a better option for my situation?
Debt settlement is not a guarantee that you won’t have to file for bankruptcy in the future. It’s recommended that anyone considering debt settlement also consider bankruptcy.
If you’re considering bankruptcy we suggest that you first consult with a bankruptcy attorney in your state to determine whether you qualify and discuss the pros and cons of this option. Only a licensed attorney may provide guidance as to whether bankruptcy is a suitable option for you.
In our opinion, bankruptcy is an extreme option, which has serious long-term effects on your credit and can often have negative results in many aspects of your everyday life. Bankruptcy is considered only as a last-resort option for just a few of the following reasons:
- Filing for bankruptcy will require you to appear in Federal Court at least once and in most cases, even more.
- Bankruptcy paperwork requires that you reveal all of your debts as well as all of your assets.
- Bankruptcy proceedings can force you to surrender valued assets.
- For up to ten years, credit bureaus are entitled to keep your bankruptcy filing on your credit report.
- A bankruptcy filing is also a matter of “public record” for anyone that wants to know about it.
How will debt Settlement affect my credit score?
The purpose of debt Settlement is to get you out of debt at a substantial settlement, not to improve your credit. There are numerous factors that need to be considered when assessing credit worthiness, including your total amount of debt, payment history, available credit, number of creditors, etc. Most clients who enroll in a debt settlement program will see their credit scores go down. For consumers that are already late on all of their bills or in collections, the effect may be minimal but we cannot predict with any accuracy how much your score will fluctuate. Keep in mind the settlement process may take several months or even several years for any given account. So if maintaining a high credit score is a top priority for you, the debt settlement process may not be a good fit for your lifestyle as you may see a damaging effect on your credit rating.
If you’re unsure of your current score, we recommend you obtain copies of your credit reports and scores from the three major credit bureaus at www.annualcreditreport.com. That being said, if you’re current on your bills and decide to enroll in our debt settlement program, the effect on your credit score may be significant since accounts enrolled in our program will generally be reported as delinquent (30, 60, 90, 120 etc) up until the time we’re able to obtain a settlement.
Upon completion of our program, your financial situation (not including your credit score) should be improved dramatically, even though your credit rating may not be ideal. The money you’d previously saved towards settling your debt can now be put towards savings, retirement, a college fund, or even a down payment on a vehicle or home. However, please note that there are specific Credit Repair laws that do not allow us to discuss, offer, or suggest that our program will improve your credit score, or have any effect other than negative on your credit report.
If you decide that debt settlement isn’t for you, remember that bankruptcy may remain on your credit report for up to 10 years and will remain in court records forever.
We urge consumers to take into account the pros and cons of the credit subject when considering our services. While your credit score may suffer, it’s important to weigh this against the valuable benefits of bankruptcy avoidance and settled accounts.
For more information on how your credit score is determined visit www.myfico.com.
Can I still use my credit cards?
Any credit cards or lines of credit that are placed in our program can no longer be used.
What will I pay for your services?
Everyone’s situation is unique and therefore no two fees for our Law Firm are exactly alike. Our consultants will review this with you in detail once we understand your situation.
Can I be sued?
Your creditors have the right to sue you to recover their funds. However, lawsuits are usually meant to force a settlement of the debt. Since we’re a law firm, our letters of representation act as a major deterrent for litigation. It’s our experience that most creditors would rather negotiate a settlement with us than go to court. Fortunately, you will have experienced debt settlement consultants and Attorneys on your side.
Can you stop my creditors from calling?
We cannot stop your creditors from contacting you. However there are laws enacted to help with harassment by third party collection agencies. It’s important to remember that all collections agencies must adhere to principals spelled out by the Fair Debt Collection Practices Act. These laws are often broken and can actually entitle you to compensation. We work very hard to minimize any calls that get through to you.
Do you repair my credit?
We do not provide credit repair services. Our goal is to negotiate settlements at significantly less than face value on your unsecured debts.
Will I be totally debt free when I am done?
Our program is focused on dealing with only unsecured debts (credit cards, medical bills, unsecured personal loans). We cannot help you with debt that is secured by collateral (such as mortgages or auto loans). After completing the program, however, the money that you are no longer paying towards your unsecured creditors can now be used to pay down secured debts, as well as to save for your financial future. Not all consumers complete our program, and sticking with your monthly savings plan is the most important factor in determining your success.
Can my wages be garnished?
Your creditors can attempt to garnish your wages. However, this can be a lengthy process for creditors that the vast majority will not pursue due to our Attorney representation. First, the creditor must sue you, obtain a successful judgment, and then file for a garnishment action. When a person is working with a creditor to resolve their debt, wage garnishments are often avoided. We negotiate with each creditor as part of your debt settlement program.
Can I negotiate with my creditors 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 Attorneys have the experience necessary to negotiate with creditors on your behalf and successfully obtain settlements. With our comprehensive debt settlement services, you don’t have to spend time and effort negotiating with your creditor for a sufficient debt settlement. Instead, we give you the confidence of a law firm doing the hard work and negotiation for you. Our teams of attorneys have a single major focus – negotiating reductions on our clients’ unsecured debts, each and every day of the week. Our knowledge, experience, and reputation put us in a strong position to stand up to your creditors and fight for the best settlement possible.
What are my tax repercussions?
You can expect creditors to report debts -either cancelled or settled – to the IRS if the amount exceeds $600. You’re required to report this to the IRS on your tax return. However, the IRS will permit you to write off income from cancelled debts to the amount by which you were insolvent during that tax period (Form 982). Please contact a tax advisor to discuss this issue further.
Do you guarantee to 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’re in the program.
How do I enroll?
If you meet the criteria to participate in our program, we encourage you to contact our team of analysts. The experienced financial consultants at our offices will review your information and help you to understand your options with no strings attached. We can discuss your situation at great length, and we will determine if you qualify, and if our program would be suitable for you.
Can changes be made after enrollment?
At any time you can make changes to your account such as: changing your payment date, increasing your payment, changing or updating your bank information or even adding a creditor. Your World Law Debt portal allows you to also be able to review the status of your creditor offers and any pending settlements that you can approve.
Contact Us Today
We’re dedicated to helping our clients become debt free. If you’re being harassed by creditors, our program can provide you with peace of mind and financial freedom. To learn more, simply contact us today.