Frequently Asked Questions

What is Debt Settlement?

Debt Settlement is the process of paying off your debts for an amount less than you owe. For example, a person with a Chase credit card with a $10,000 balance might only be able to pay $4,000 to close and “settle” the account and have the remaining $6,000 forgiven.

How does Debt Settlement work?

Debt Settlement is a negotiation between you (or your representative) and your creditor (or their representative like a collection agency or collection lawyer) to pay a lesser amount than your current balances.

Why are creditors willing to settle?

It is an accepted business practice for creditors to take less than the balance owed, because they are unlikely to collect on the vast number of accounts that are more than 90 days late. For more information, you can watch this video: 

When are creditors willing to settle?

The timing can vary depending on who you’re working with. Creditors typically are willing to settle when you’ve become late enough to trigger the accepted protocol for loss mitigation. This is typically when you’re at least 90 days delinquent or more.

How do creditors determine Debt Settlement amounts?

Creditors will base the settlements that they agree to on: how delinquent your account is how long you’ve had the accounthow collectable you look on paper (you appear to be managing at least some of your debts well)

What are the basic criteria to be eligible for Debt Settlement?

You’ve fallen behind on payments and the debt is “old enough” to be considered for a settlement plan (usually 5 or more months delinquent).You must be in a position to accept the terms or the amount of the settlement (have enough savings or resources to commit to a settlement in…

What are some of the benefits of Debt Settlement?

You will likely pay less and get out of debt faster; which is a drawback and benefit. If you’ve already missed payments with your creditor, and are in collections, settling will eventually help your credit.It can improve your financial situation.It can help you avoid being sued if you’re already in…

What are some of the risks of Debt Settlement?

Your credit score will temporarily drop, if it has not already.Collections – your account will be subjected to internal/external collections which could include being sued.You may be impacted by taxes.

How long does Debt Settlement take?

Debt settlements do not have a set time of completion. You could have a single account you are already late enough on, and settle it in one day. Settlements typically take as long as it takes you to pull money together to fund the deals. But try not to take…

Can I be sued by my creditor while pursuing Debt Settlement?

Yes. Creditors have the right to file a lawsuit if you are not paying a debt. Being sued is one of the biggest concerns you should have before determining if debt settlement is something you should attempt. Feel free to contact us for a free consultation so we can help you calmly…

What happens if I get sued?

We have attorneys available that can represent you for as little as $200 that will continue to work on negotiating a settlement, be prepared to pay 50% or higher on lawsuit negotiations. For more information, you can reach out to our support team by emailing support@helloresolve.com or schedule a consultation appointment here!

How does Debt Settlement impact my credit score in the beginning?

Your creditors will not settle with you unless you are late with payments. On time payment history is roughly 30% of how your credit score is factored. This has a major impact on your credit score. If you are already late with payments, your credit is already impaired. Settling the…

How will my credit score change during and after Debt Settlement?

Credit scores typically don’t improve during settlements, but can improve rapidly after! Some people see a much more elastic bounce back soon after their last settlement payment, whereas for some people it can take a few years to see healthy credit score improvements.

What will show on my credit report during and after Debt Settlement?

Remarks of 30, 60, 90, 120, 150 days late, followed by a charge-off will appear. Additional trade lines could be reported later on by debt collectors and debt buyers.Once paid, it will show as a paid collection but you can still accomplish your future credit and finance goals, even with paid collections…

Is there a tax impact with Debt Settlement?

Not everyone will owe tax on their settlements.If you have a debt that is settled for less than the original balance, and the difference (the forgiven portion of the debt) is greater than $600.00, this would then needed to be reported as income. In this case, you should receive a…

When will I be able to get a credit card, loan, car, and/or mortgage after Debt Settlement?

You can apply for credit cards, loans, car loans, and mortgages right after your last settlement payment is made.

Can I do Debt Settlement on my own?

Yes, many people are successful negotiating with creditors and debt collectors on their own, but be prepared to do your own research. It is hard work to optimize results. So, as for anything, there are pros and cons to this approach.

Should I get help from a traditional Debt Settlement company?

We are not fans of how most debt settlement companies charge such high fees! And they often settle debts in the wrong order that allows them to get paid quickly, and not in a manner that saves you the most. At Resolve, we are biased about these companies, as we offer an alternative solution,…

How can Resolve help me vs. traditional Debt Settlement companies? What's the difference in fees?

Our number one goal is to assess your personal situation and understand the legitimate, viable options for you, and we are really good at that! We are then going to transparently educate and inform you of these options, triage based on your situation, and provide you with partners that can help…

What is a Resolve Debt Settlement Plan?

We provide you an outline and estimate of what your settlement(s) will cost, how long the settlement plans will take to complete, and when you should target certain creditors. It’s created for you to use as a guide, and we also include our service fee so everything is transparent and personalized before you decide to proceed…

When does the Debt Settlement Plan start through Resolve?

Your plan can begin today if you’re ready to proceed. That can include negotiations with your creditors and collectors if your accounts have gone unpaid long enough, and you are prepared financially to fund offers. If you are not late enough on debts in order to get the best settlement…

Do the Resolve Debt Settlement estimates include fees?

Yes, the fees are already included in the payment estimate(s) for your plan. You pay your settlement and then you will receive an invoice from Resolve. Our goal is to save you as much as possible, so our fee is 15% of the savings we get for you. We can…

How much are the Debt Settlement fees through Resolve and how do they work?

Our goal is to save you as much as possible when negotiating and settling your debts. Our negotiator partners charge 15% of the savings they’re able to get for you. Since their incentive is to save you as much as possible, it’s a win-win for both sides!  For example: Let’s…

Why is there a range in fees for the Resolve Debt Settlement estimates?

Given that Resolve charges a fee based on 15% of the amount that our negotiating partners are able to save you, the fees will vary depending on the settlement agreements with your creditors or lenders. Because there is a range for your settlement, there is also a range for the fee.…

I see a legal fee of $200 as part of my Resolve Debt Settlement estimate. Do I have to pay this?

Yes. If you have been sued by a collection law firm, and would like an attorney to respond for you in court, this fee is paid to your attorney. This $200 covers only the filing of your initial response to the court summons and complaint.

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