First Choice Debt Relief's Credit Card Debt Settlement Program

About Debt Settlement

Both creditors and those in legal debt use debt settlement, also known as debt arbitration, to agree on the payment of a current debt. (Credit Card Debt Settlement is unlike Debt Consolidation and Consumer Credit Counseling.)

Those with credit card or other unsecured debts have the legal right to reach a payment deal with creditors. Unfortunately, this type of negotiation is complicated and most successfully handled by professionals. First Choice Debt Relief can settle your existing unsecured debt 40-60%^* by mediating a settlement with creditors on your behalf.

By communicating with creditors, debt settlement companies help those in credit card debt set goals for saving and producing money for the agreed payment of debt. Typically, a debt settlement company can successfully reach a payment agreement by negotiating with creditors.

Do not attempt credit card debt settlement on your own by directly contacting your creditors. Hiring a qualified and knowledgeable expert like First Choice Debt Relief will assure a more favorable result and happy conclusion to your debt issues.

Details of Our Debt Settlement Program

First Choice Debt Relief’s program is straightforward. We reach a deal with your creditors so you only pay a portion of your unsecured debt. We are commonly able to settle your total credit card debt by 40-60%*.

As a client of First Choice Debt Relief, you work with your counselor to come up with a reasonable debt settlement program monthly payment. Based on that monthly payment, we can establish how long you will be part of our program and when you will achieve the ultimate goal, freedom from credit card debt. We do all of the communicating with your creditors.

After joining our program, First Choice Debt Relief will speak with each of your creditors on your behalf as your representative, informing them of your request for debt settlement.

Over the course of many phone conversations and written communication, we will reach an acceptable settlement with your creditors. If you agree with the settlement, your creditor sends us a written agreement for you to sign with instructions for payment.

Once your creditors accept your payment, that’s it – you are debt free from credit card debt! First Choice Debt Relief’s dedication to settling your credit card debts, guarantees you peace of mind and freedom from overwhelming and devastating debt.

Helping all people become credit card debt free is First Choice Debt Relief’s goal. We do not work for creditors. We work diligently to benefit those in debt, providing a financially secure and debt free future.

• We believe debt settlement is the best way for people to settle troubling credit card debt.
• We reach a deal with creditors based on the principal balance of your debt, discounting any finance or interest charges creditors attempt to add.
• We work for people suffering from unsecured debt. We do not work for creditors.
• We offer affordable financing for our program fee.
• We can help you be debt free from your unsecured debts in 15-36 months, time dependent upon your cash/debt ratio.²
• We can provide you with an open delinquency rating on your credit report while working to settle your debt.
• We can lower your debt to income ratio faster than Consumer Credit Counseling, crucial when qualifying for a loan.
• We can settle your credit card and unsecured debt significantly. Typically, clients pay only 40-60%* of their credit card debt balance.

Frequent Questions about Debt Settlement

Q. Can I participate in your credit card debt settlement program if my income varies from month to month?

A. Certainly. Our program sets an affordable payment based on your individual situation.

Q. Will your program hurt my credit?

A. Our debt settlement program will temporarily negatively affect your credit, as you will not pay your minimum payments during the negotiation process. Your creditors can report the late/missed payments to credit agencies up to the settlement of the account, which is usually 36 months or less. Keep in perspective that we are settling the entire amount of credit card debt. After payment of the negotiated amount, your creditors will report the account as paid with a zero balance.

Q. Why should I use First Choice Debt Relief instead of settling my own debt?

A. Our business is negotiating and settling debt with creditors. We have established connections with collection agencies and creditors, many of whom will not negotiate directly with a debtor. First Choice Debt Relief is an expert in The Fair Credit Reporting Act, The Fair Debt Collection Practices Act, and general debt settlement laws and techniques.

Q. Is there an actual live person I can speak to about creditor problems and your debt settlement program?

A. Of course! After signing up for our program, you receive an account number and an account manager to handle your debt settlement. Please call your account manager whenever you have questions, problems, or even a little anxiety about the process.

Q. Is it required that I include each of my creditors in your debt settlement program?

A. Not at all. Our program encourages participants to keep one credit card account out of the program for emergencies. All other accounts involved in our credit card debt settlement program are closed because creditors will not consider settlement on open active accounts.

Q. How long does the debt settlement process take?

A. It usually takes 18-36 months to finish the credit card debt settlement program.^* However, length of time is dependent on several variables, including cash available and the situation of the individual.

Q. How much do I have to pay to participate in your debt settlement program?

A. Based upon individual situations, our credit card debt settlement program costs vary. By working with your account manager, you determine an affordable monthly payment by reviewing your amount of debt, living expenses, and current income.

Q. What happens if my creditors do not want to settle my debt?

A. Creditors are smart. They would rather get something than nothing. Settling for a portion of the amount owed ensures they get something, whereas they know if they do not settle they risk receiving nothing in the end. Actually, creditors usually make the decision to settle quickly once contacted by us. On the odd occasion that a creditor does not want to accept our offer, they always present a favorable counteroffer. Creditors want you to avoid having many debtors enter bankruptcy. They know if you file for bankruptcy, they get nothing. If in the rare instance your creditor does not settle, we offer 100% money back guarantee. Please contact First Choice Debt Relief for full details.

Q: Aren’t debt consolidation and debt settlement the same thing?

A. No, they are actually quite different. Credit Card Debt settlement programs negotiate a payoff amount with your creditors, settling the amount of your credit card debt. Debt consolidation programs provide loans, secured by your belongings, to pay off the entire amount of debt you owe creditors.

With debt consolidation loans, you basically move the debt from one creditor to another. These loans pay off the entire amount of your current unsecured debt with the money from a new secured debt loan. Debt consolidation loans are secured by the property of the debtor, usually by the borrower’s home. You may not qualify for a debt consolidation loan if you have bad credit, enormous debt, or do not have sufficient equity (usually 25-30% LTV).

The most important thing to consider with debt consolidation loans is if you really want to pay unsecured debt by risking your property with a secured loan. Keep in mind that you are borrowing yourself out of debt with debt consolidation. Sadly, statistics show that approximately 70% of those getting debt consolidation loans end up deeper in debt within two years than when obtaining the original loan.

Contributing to the problem is that after paying off credit cards to a zero balance, borrowers start buying on credit, repeating the entire process again. Before they know it, borrowers are charged up to their credit limit again and, along with the debt consolidation loan balance, are worse off than before the loan. This leaves the borrowers with loan payments and new credit card payments.

The scariest part is that if the borrowers miss consolidation loan payments, they will lose the asset that secures the loan – usually their home.

Q. Can’t I just settle my debt on my own?

• Yes, you can settle your debt on your own, but experts do not recommend it. You can also replace the wiring in your home by yourself, but if you are not a certified electrician, you are taking a risk. Why take a risk when you can hire an expert with the qualifications to best do the job?
• Creditors are experts at their job. Their perfected methods of intimidating and dealing with people in debt can frighten or bully a person into agreeing to unrealistic payment agreements. Why deal with it?
• Being in debt is stressful. Emotions come into play, particularly when a debt collector is screaming at you on the phone. We deal with creditors and collectors every day. Stress and emotions will not affect our negotiations on your behalf. Why not leave the stress behind by letting our experts handle your debt settlement?
• Our debt settlement negotiators do just that for a living. They work to reduce the amount of unsecured debt for individuals experiencing financial strain. Let First Choice Debt Relief work to reduce your debt¹. Use your time doing what you do best and leave the negotiating to us.
• First Choice Debt Relief is extremely knowledgeable about the process of debt settlement, including how creditors and collection agencies work. Save time, thousands of dollars, and avoid a whole lot of stress by enrolling in our program and letting us settle your debt.

Q: Isn’t Consumer Credit Counseling and Debt Settlement the same?

A. No, they are not the same. Debt settlement programs negotiate a payoff amount with creditors, reducing the total amount of debt. Debt settlement programs are responsible for saving people money and many years of repaying.

Typically operating under non-profit status, Consumer Credit Counseling Companies are not free for debtors and do not represent any type of charity. These Consumer Credit Counseling Companies may have non-profit status, but they employ thousands and make millions of dollars in profit.

With Consumer Credit Counseling, a debtor meets with a counselor who looks at their monthly income, amount of unsecured debt, and any other monetary obligations. The counselor creates a monthly budget for the debtor to follow. The debtor and counselor discuss a plan for lowering the interest rates on credit cards and possibly even the minimum monthly payment.

Once agreed, the counselor speaks with the unsecured debt creditors, requesting placement in the creditor’s hardship repayment plan. This plan allows for a lowered interest rate, usually for 12-18 months. *Typical Consumer Credit Counseling programs last 48-60 months, during which single payments sent to Consumer Credit Counseling Companies are then paid directly to the debtor’s creditors for 48-60 months.

While people seem to think the Consumer Credit Counseling Company fee is small, debtors should keep in mind that these companies act as a stand-in for the actually creditor. They are able to make so much profit because most of their income is from "donations" from credit card companies who base their donations on the amount the Consumer Credit Counseling Company gets you to pay during your participation in the program.

This is comparable to how creditors pay collection agencies. For-profit companies cannot legally accept donations, so this is why Consumer Credit Counseling Companies operate as non-profit corporations. The bottom line is that a Consumer Credit Counseling Company may not always be operating under your best interest.

The disadvantages to Consumer Credit Counseling include:

• Consumer Credit Counseling programs require you to pay the full amount of the debt you owe. They only work to attempt to reduce your interest rate. 
• Consumer Credit counselors make your payments for you. Unfortunately, not always on time which can result in negative marks on your credit report and late fees.
• Consumer Credit Counseling is not always able to reduce the amount of interest you pay.
• Consumer Credit Counseling and creditors usually insist you be 30 days late on payments to enter hardship repayment plans. This again adds to a negative credit report and late fees.
• Even with a reduced interest rate, payments are usually still high and may take years to pay off.
• Consumer Credit Counseling Companies may advertise they can get you a 50% reduction in your monthly payment, but it rarely happens. When payments are lowered, it usually just lengthens the amount of time it will take to pay off your debt.
• Typically, people fail in getting out of debt with Consumer Credit Counseling programs.
• Your creditors may actually be funding your Consumer Credit Counseling Company, ensuring that your company might not really be working for you.
• Working with a Consumer Credit Counseling Company will mark your credit report with a “CC.” This will hurt your credit, especially when trying to buy and home or refinance your existing home, because lenders view it as negative.

Q:  Will I have to pay extra taxes to the IRS because of my debt settlement?

A. Creditors are required to report your debt settlement with a reduction exceeding $600 to the IRS on your annual income tax return. The IRS will allow you to write off income from your canceled debt “up to the monetary amount by which you became insolvent.”

Unless your net worth is positive, you will not have to pay taxes on the reduced amounts. In addition, those not qualifying as insolvent may deduct non-principal sums or fees accumulated from the amount reported on your taxes. (www.IRS.gov Publication 908)

Q:  What do I do if they get a Judgment against me?

A. The facts are simple. Currently, the United States has somewhere between 200-300 billion dollars in uncollected Judgments.

Only a few people are educated in how to find a debtor’s assets and how to proceed, so millions of dollars in Judgments remain unpaid and filed away. One statistic says that four out of five Judgment winners never see any of the money awarded. Our job is to negotiate the reduction of your unsecured debts, including Judgments. The stage of collection does not matter. Everything is negotiable.

Q:  Will you be able to stop any legal action filed against me?

A. No. Any creditor has the legal right to use the law to collect debt owed. Some creditors file lawsuits and others prefer not to.

It is uncommon for a creditor to file a lawsuit, but not unheard of. Many collection agencies and third-party creditors will commonly use the threat of a lawsuit as an intimidation tactic. (Although, it is illegal to threaten a lawsuit if they do not plan to file a lawsuit.)

Realistically, a lawsuit filed by collection agencies and third-party creditors is rare. A creditor must hire an attorney in the state where you reside to sue you. It takes a lot of time, aggravation, and money to file a lawsuit. The bottom line is that even if a creditor wins a lawsuit against you, the creditor can only take what you possess.

Wage garnishments are not valid in all states and they depend upon your employment. If your home is protected under your state’s homestead act, it will be difficult or even impossible for your creditor to get your home or to tap into your equity. It is usually most efficient and lucrative for creditors to settle with a debt reduction than to file a lawsuit.

No one can guarantee a creditor will not file a lawsuit against you, but we are secure that we can deal with your creditors effectively and reduce or eliminate the chances of a lawsuit.

Your unsecured debt can be settled at any time, regardless of lawsuits or other types of legal action. The filing of legal papers does not mean it is too late for you to pursue debt settlement. Do not be scared by lawsuits. If you seek help with us, you need not worry.

*We are not attorneys and cannot adequately provide you with legal guidance. Our qualifications provide us with the ability to work with you and your creditors toward reaching a resolution agreeable to all parties before proceeding with legal action.