No. Any creditor has the legal right to use the law to collect debt owed. There are creditors that are more aggressive and creditors that are less aggressive. It can also depend on the state and even county you live in. Taking all this into consideration a well managed debt settlement program will negotiate aggressive accounts at the right time.

First Choice Debt Relief will negotiate accounts with the creditor directly, collection agencies or even debt collecting attorneys.

*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.

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)

No, they are actually quite different. Credit Card Debt Settlement programs negotiate the principal balance of your accounts. A Debt Consolidation Program, on the other hand, normally provides a loan 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.

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, most 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 normally present a counteroffer. Creditors don’t want you to file bankruptcy. If in the rare instance your creditor does not settle you will not be charged a fee by First Choice. We’ll also attempt to place you in an affordable payment plan with that account.

Our credit card debt settlement program costs vary from state to state. By working with your account manager, you determine an affordable monthly payment by reviewing your amount of debt, living expenses, and current income.

You can use our credit card debt calculator to get an idea of what monthly program payments might be like.

It usually takes 24-48 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.

We have many clients who are able to make more than the minimum program payment to finish sooner. For example, tax refunds are frequently applied to the program. If you’re serious about getting out of debt you will focus on putting as much money possible towards your program.

Each creditor has different parameters for settlement. Some settle lower and others settle higher. Here are First Choice Debt Relief’s actual historical numbers for all accounts we’ve negotiated: (As of 6/10/2011)

41.62% of the Original Balance – 36.44% of the Current Balance

This means the average settlement offer we get saves 58% off the original balance enrolled.

Our fees vary by state and situation. However, most people will qualify for our savings based fee structure.

Most companies will charge you a flat fee based on what you enroll. They could save you only $1 and still charge you the full fee. First Choice Debt Relief’s fees are based on the amount of money we are able to save you keeping us accountable and working aggressive on your behalf.

And remember, First Choice Debt Relief will never charge you any Up-Front Fees to start.

debt settlement program will negatively affect your credit. This is because monthly payments aren’t sent to the creditors on a regular monthly basis until a settlement has been reached. During that time the creditor will report the payment as missed or late.

However, the debt settlement credit impact is minimal for those that have already fallen behind.