Debt Resolution FAQ: Your Questions Answered with Care and Clarity
Taking the first step toward resolving debt can feel overwhelming, but you’re not alone. We’re here to support you every step of the way with answers to the most common questions about debt resolution programs. Let’s explore how this process can help you take control of your financial future.
1. What is a debt resolution program?
A debt resolution program is a proven strategy to help reduce the amount you owe and achieve freedom from debt. It’s different from other approaches, like consolidation or counseling, because it focuses on negotiating with creditors to settle debts for less than the full amount owed.
2. How does debt resolution work?
Here’s how it works, step by step:
Assessment: A specialist reviews your financial situation to design a plan tailored to your needs.
Savings Plan: You set aside funds in a secure account dedicated to settling your debts.
Negotiation: Professionals work with your creditors to agree on reduced settlement amounts.
Resolution: Once settlements are reached, you use the funds saved to pay off the debts one by one.
This process empowers you to resolve your debt efficiently while providing peace of mind.
3. Will my credit score be affected?
Yes, your credit score may be impacted temporarily during the program. But here’s the good news: as your debts are settled and you rebuild your financial habits, many clients see their credit improve over time. The short-term impact is a small trade-off for the lasting relief of becoming debt-free.
4. Will I have to close my credit card accounts?
Yes, you’ll typically need to close credit card accounts enrolled in the program. While this may feel like a loss, it’s a crucial step to help you focus on resolving your debt and avoiding further balances. This change paves the way for long-term financial stability.
5. What types of debt can be included in a debt resolution program?
Debt resolution is ideal for unsecured debts such as:
Credit card debt
Personal loans
Medical bills
Collections accounts
Unfortunately, secured debts (like car loans or mortgages) and most federal student loans aren’t eligible.
6. How long does the program take?
Most debt resolution programs are completed in 24–48 months, depending on your debt amount and how quickly you can save for settlements. The key is consistency, and we’ll guide you through every milestone.
7. What are the costs involved?
The average service fee for a debt resolution program ranges from 15% to 25% of the total enrolled debt. These fees are only charged after a successful settlement. Transparency is a top priority, so you’ll know the exact costs before you commit.
8. Will creditors continue to contact me?
Once enrolled, many creditors will communicate directly with your debt resolution provider, reducing the stress of dealing with collection calls. If any contact persists, we’ll help you understand your rights under laws like the Fair Debt Collection Practices Act (FDCPA).
9. How will this impact my ability to rent or buy a home?
While your credit score may temporarily decline during the program, resolving your debt opens doors to financial opportunities. Many clients find they can rebuild their creditworthiness and qualify for rentals or mortgages shortly after completing the program.
10. What happens to my rewards points and loyalty programs?
If credit cards with rewards are part of the program, those points may be forfeited. However, this short-term loss is a stepping stone toward achieving financial freedom and creating room for future opportunities.
11. Is debt resolution better than bankruptcy?
For many people, debt resolution offers a way to regain control without the severe legal and credit consequences of bankruptcy. It’s a powerful option to consider if you want a solution that prioritizes resolution over legal proceedings.
12. Can I negotiate my debts on my own?
Yes, you can attempt negotiations independently. However, working with experienced professionals ensures that you’re leveraging expertise, maximizing savings, and minimizing stress.
13. Is debt resolution right for me?
Debt resolution might be the right choice if:
You have significant unsecured debt with high balances that you aren’t able to bring down on your own.
You are currently dealing with high interest rates and are making less than 2x your min. payments.
Minimum payments feel unmanageable, and your debt is going nowhere.
You’re committed to resolving debt and starting fresh.
It’s not a one-size-fits-all solution, but we’re here to assess your situation and guide you toward the best path forward.
14. How do I choose the right debt resolution company?
Look for a provider that is:
Accredited by organizations like the American Fair Credit Council (AFCC).
Transparent about fees and timelines.
Backed by positive customer reviews and success stories.
Licensed to operate in your state.
You deserve a team that genuinely cares about your success and puts your best interests first.
Taking control of your debt is a courageous decision, and every question you ask brings you closer to financial freedom. If you’d like to explore your options or have more questions, our team is ready to empower you with expert guidance and unwavering support.