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Choosing a debt settlement company is
not an easy matter as we are sure you have found out by
now. While there are many questions it almost seems that
with each new question three to four more pop up.
Below are a list of the most
frequently asked questions that many have asked us that
helped them to make a decision in using us to be their
debt settlement rescue team.
If you have any
additional questions or
are ready to really experience financial freedom
call
(877)
755-4494
to
get you started today because waiting for some
one else to rescue you will only
delay and hurt you even more. Let us be the miracle you
have been looking for!
We look forward to helping you become debt free!

Answers To
Frequently Asked Questions
Q: How does the
program work? |
Answer |
A: Debt
Settlement works by reducing the balance owed
(principal) on your unsecured personal debt
accounts through the time-honored process of
creditor negotiation.
This is different from simply
reducing the interest rate as with Debt
Consolidation and Credit Counseling, which do
not affect the total debt balance.
By reducing the balance itself,
Debt Settlement provides a much faster means of
becoming debt-free. Most creditors are willing
to accept 55%, 40%, sometimes as low as 15% of
the balance owed in order to close out an
account rather than lose the entire amount in a
bankruptcy proceeding.
From a business perspective, it
is a matter of the creditor receiving something
rather than nothing, as would be the case in
most bankruptcies.
Of course, different creditors
have different policies, but as a rule,
discounts of 50% or greater are routine in the
industry.
As a consequence of this
approach, money that was previously wasted on
endless minimum payments (most of which went
toward interest charges) goes toward reducing
the actual debt balance.
That's why Debt Settlement
through negotiation is the fastest debt
elimination method short of Chapter 7
bankruptcy.
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Q: Will this
strategy work for me? |
Answer |
A: Though
the Debt Settlement approach is not suitable for
everyone, its flexible nature makes it
applicable to a wide range of financial
circumstances. For individuals and families
seeking an alternative to bankruptcy, there is
simply no better option to get out of debt. Here
are a few guidelines to help you determine
whether or not Debt Settlement is something you
should consider:
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Do you have a legitimate
financial hardship condition? Most
debt problems are caused by loss of income,
medical issues, or divorce/separation. These
are legitimate financial hardships that can
happen to anyone through no fault of their
own, and any one of these situations can
wreak havoc on a household budget. The
important point here is that the Debt
Settlement system is not a "free lunch" for
people who don't feel like paying their
bills. If you are over your head due to a
hardship circumstance, and you'd prefer to
work things out with your creditors rather
than declare bankruptcy, then Debt
Settlement can provide a honest and ethical
debt relief alternative.
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Are you committed to
avoiding bankruptcy? Debt Settlement
is best viewed as a bankruptcy alternative,
one that allows you to keep control over the
process and maintain privacy while working
through your financial difficulties. As with
most things in life, success is determined
by your level of commitment to staying the
course, even when the road gets a little
bumpy. If you are likely to give up at the
first rough spot, then Debt Settlement is
probably not the best choice for you. But if
you are determined to avoid bankruptcy, Debt
Settlement will likely be the most
attractive debt solution for you.
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Do you owe more than
$10,000 in unsecured debt?
We are
the first to admit that Debt Settlement is
strong medicine, and it should be reserved
for serious debt problems. While everyone's
budget is different, most people can work
their way out of smaller debt obligations.
If you only owe $5,000, for example, unless
you are really in dire straits you can
probably deal with that obligation the
old-fashioned way - by paying off the debt
in full, over time. In other words, smaller
debt loads are more of a budgeting problem
than a serious financial hardship. At
Liberty Financial, we use the benchmark of
$10,000 for evaluating whether or not a
prospective client qualifies for our
program. (Note: Exceptions are sometimes
made based on hardship circumstances, so the
$10,000 figure should be used as a rule of
thumb or guideline. If you aren't sure
whether you meet the requirement, please
call one of our knowledgeable
representatives at
(877)
755-4494 for a
free, no-obligation consultation.)
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Are your debts primarily
from credit cards? Most types of
unsecured debt can be negotiated, including
medical bills, lines of credit, signature
loans, repossession deficiencies, financing
contracts, department store cards,
miscellaneous bills and more. The deepest
discounts, however, are usually obtained
with credit card debts. The results are far
more predictable with credit card accounts
than with other types of obligation, so if
the majority of your debt load is comprised
of credit card debt, you can anticipate good
results from the Debt Settlement strategy.
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Is your monthly budget up
to the job? With a Debt Settlement
program, it's necessary to be realistic
about your budget. If you cannot build up
funds for settlement at a reasonable pace,
then the program becomes less viable. A good
rule of thumb is that you should be able to
set aside roughly 2% of your debt level on a
monthly basis. So, for example, if you owe
$30,000 in unsecured debt, you should be
able to consistently set aside $600 per
month. This would allow for a program of
approximately three years' duration. Budgets
vary from month to month, so it's possible
to set aside 1% one month, and make up for
it by setting aside 3% the following month,
so long as the average, over time, is around
the 2% figure. This makes the program ideal
for people whose income varies up and down
because of overtime pay, seasonal cycles, or
commission-based income. But if you're
funding the program consistently below the
2% monthly level, the duration will stretch
out to the point where you may become
frustrated with the lack of progress.
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Do you have additional
resources to work with? Debt
Settlement can work very well if you have
access to one-time lump sums. Small
inheritances, insurance settlements,
cash-value life insurance policies,
borrowing from friends and family, ebay
auctions, and even garage sales are a few of
the alternate sources of funding that
clients have used in lieu of a monthly
payment stream. So even if you can't
consistently fund the program on a monthly
basis, if you have other resources to work
with, Debt Settlement can still help you
become debt-free.
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Q: What
happens to my credit? |
Answer
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A: The effect
of our Debt Settlement program on your credit
score will partly depend on your current credit
status before starting the program.
Few people with debt troubles
have perfect credit to begin with. In general,
your credit score (usually called the FICO
score) will decline during the program, and will
begin to improve quickly again after you have
become debt-free when you use our credit repair
program.
There are several key points to
bear in mind here. We recommend against applying
for new credit while going through the program.
It simply doesn't make sense to take on new debt
while you're trying to tackle your existing debt
problem. So the short-term decline in credit
score is rarely a problem for clients. Also, the
credit score itself does not take into account
the debt-to-income ratio, which is used by
lenders (especially in the mortgage industry) to
determine whether you qualify for a home or auto
loan. In other words, you can have a high credit
score due to a clean payment history (even
though it's been killing you financially to keep
up those payments) and still be denied a new
loan because you already carry too much debt. By
completing a Debt Settlement program, your
debt-to-income ratio will improve dramatically!
Any way you look at it, the
effects of Debt Settlement on your credit will
certainly be less damaging than the 10-year
derogatory mark made by bankruptcy. And again if
you use our credit repair program you can
improve your credit score by more than 100
points in 6 months.
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Q: What are the
fees? |
Answer |
A: The fees
charged by Liberty Financial for
professionally-assisted Debt Settlement are
among the most competitive in the industry.
Before describing our fee
structure in detail, however, it's important to
place the matter of fees in perspective.
Choose to consolidate debt
through a loan, and you will pay back, over
time, the full amount borrowed plus loan
origination fees.
Choose to work with a Debt
Counseling (or credit counseling) agency for a
traditional debt management plan, and again you
will pay back the full amount of your debts plus
the fees charged by the agency.
By using Liberty Financial as
your Debt Settlement firm, your total payout
(including our fees) will still be much less
than the total amount you currently owe!
The primary fee charged by Liberty Financial
is based on performance and results. We charge
15% of the account balance that we negotiate on
your behalf.
So, for example, if you owe
$5,000 on a particular account, and we negotiate
a debt reduction to $2,000, that means we've
saved you $3,000. Our negotiation fee would then
be 15% of the starting balance, or $750. So you
would pay $2,000 to the creditor, $750 to
Liberty Financial, and that debt would be gone
forever! The total payout here would be $2,750
versus the $5,000 originally owed.
We call this a success-oriented
fee structure, because Liberty Financial doesn't
charge this fee until
after the work is done.
Most of our competitors charge a high fee up
front before any work is done. At Liberty
Financial we feel that it's better to ensure our
clients the best possible result through this
approach.
In addition to the negotiation
fee, we also charge a one-time setup fee and a
small monthly maintenance charge because we use
a Federally Backed Escrow account that you can
log into, to manage your program. These amounts
will vary depending on the size and nature of
your debt, as they are designed to cover the
cost of establishing and maintaining your
account until you can build up sufficient
resources for us to use to settle your debts.
Please call us at
(877) 755-4494
for a free, no-obligation consultation with one
of our professional representatives.
We'll analyze your situation and
let you know exactly what the setup and monthly
charges will be for your case. We're proud of
the fact that we have no other hidden fees or
surprise charges.
Everything is fully disclosed so
that you can proceed on our program with total
confidence. And remember, if you do your part in
building up the resources for us to negotiate
with, your total payout including fees will be
far less than the total debt balance you
currently owe.
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Q: What
are the tax consequences? |
Answer |
A:
Financial institutions are required to report
canceled debts over $600 (the portion forgiven
during the settlement transactions) to the IRS,
and the debtor is required to report that as
income on their tax return.
However, the IRS permits you to
offset any "income" from canceled debts up to
the amount you were "insolvent" at the time the
debts were canceled.
You are "insolvent" if you owe
more than you own, or in other words, if you
have a negative net worth. If you're deep in
debt, it's not likely that you have a positive
net worth, so it's rare that a client would have
to pay taxes on the forgiven debt balance.
The exception might be an
individual with a high level of home equity,
which might make the overall net worth positive
and thereby eliminate the insolvency exclusion.
However, this is the exception rather than the
rule.
Our view is that even in the
unlikely circumstance that you might owe tax on
the forgiven debt balance, you'll still be way
ahead of the game by eliminating your debt
balances sooner rather than later.
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Q: What about
creditor calls? |
Answer |
A: Liberty
Financial cannot realistically promise to
eliminate all collection calls, however, we do
understand the stress collection calls can
create and recognize the importance of offering
the support and expertise needed to help reduce
such calls and counteract potential collection
harassment.
In an on-going effort to
support our clients during their journey to
becoming debt free, we have taken a proactive
step by utilizing the services of Consumer
Justice Group (CJG) and passing those services
on to you at no extra charge. This third-party
advocacy organization aids in protecting the
rights of consumers afforded by the Fair Debt
Collection Practices Act (FDCPA). Their
knowledgeable and courteous advocates are
experienced with the strict guidelines that
regulate fair debt collection; in turn,
providing invaluable education, easily adopted
measures to reduce collection calls, and
step-by-step instruction to help protect and
effectively exercise your rights.
It is recommended that you leave
a message on your machine and inform those who
are calling you that you return calls on one
particular day. Then on that day call the
creditors that contacted you and inform them of
your situation and that you are working to honor
your agreement but that you are unable to pay at
this time and will keep them up to date on your
situation on a monthly basis. You may continue
to receive calls but always make sure you return
them and be completely courteous to them keeping
them posted as to your situation. Usually they
assign the account to a new representative each
month so you may have to share your situation
again each month but usually they have the notes
in front of them and you can quickly let them
know that at this time there is no change in
your situation.
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Q: What
about lawsuits? |
Answer |
A: While
creditors have the legal right to bring a
lawsuit for non-payment of a debt obligation,
such lawsuits are far less common than most
people think. It costs money to sue someone, and
a legal judgment is simply a piece of paper
unless there is a way to collect money against
it.
The threat of litigation, on the
other hand, is all too common, even though debt
collectors are not supposed to threaten legal
action unless they are specifically authorized
to bring suit. In general, lawsuits can normally
be avoided, provided you are willing to work out
suitable arrangements with your creditors
through the negotiation process.
Contrary to popular belief, most
creditors would rather work things out amicably
in a negotiated settlement than spend more money
taking a customer to court (with no guarantee of
being able to collect on a judgment).
That's why thousands of
litigation-free settlements are transacted every
month all across the country.
Creditors won't admit it
publicly, but our method works much better for
them than forcing people into bankruptcy through
overly-aggressive collection techniques.
While Liberty Financial is not a
law firm and does not provide legal advice, we
do want our clients to understand that the
worst-case scenario is that a client might be
required to pay a debt balance in full in the
event of legal action by a creditor. This is
little different from the starting situation
most clients find themselves in, and again, it
is a fairly rare occurrence.
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Q: Can my wages
be garnished? |
Answer |
A: If you
listen to some debt collectors, you might be
fooled into thinking that they will seize your
very next paycheck unless you make a payment
right then and there. The threat of losing part
of one's wages to a garnishment action is truly
frightening to someone already struggling
financially. But this is mainly an intimidation tactic used by collectors to
scare people into committing to a payment
schedule whether or not they have the funds
available.
Actual garnishment actions are
relatively rare, and do not happen without
advance warning. First, a creditor must bring a
lawsuit, obtain a judgment, and then take an
additional step to obtain authorization for the
garnishment.
No one
can take your paycheck without court approval,
and you must be given notice of such court
action through formal documentation. So don't be
fooled by one of the oldest collection tricks in
the book.
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Q: Will I
still be able to use my credit cards? |
Answer |
A: No. You will
not be able to continue using any of the credit
cards or other accounts enrolled into our Debt
Settlement program.
That's because you are aiming to
have the creditors forgive half or more of the
balances owed, and they simply will not extend
more credit unless you bring the account current
again and get back on a plan to pay off the full
balance.
However, at Liberty Financial,
we recognize that it's very difficult to make do
without at least one credit card for
identification and/or emergency purposes. To
that end, it is permissible for clients to
maintain one card (preferably one with a small
balance) outside of the program.
This is another great benefit of
the Debt Settlement approach versus other
methods, which take an all-or-nothing approach
to debt elimination.
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Q: The differences of Debt Settlement & Credit Counseling?
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Answer |
A: The most
important difference between these two programs
is that with Credit Counseling, you pay back all
of the debt balances, plus interest and fees,
whereas with Debt Settlement, you pay back only
a portion of your debt load. That's why Debt
Settlement is a much faster path to debt freedom
(2-3 years) than Credit Counseling (5-9 years).
This means a lot less money out of your pocket
is used through the Debt Settlement approach.
Another key difference is that
your Debt Settlement firm works solely for you,
the consumer, and receives no compensation
directly from the creditors. In other words,
your Debt Settlement firm is truly on your side.
With a Credit Counseling agency,
there is a dual relationship, where part of
their income comes from the client and the
majority of it comes from kickbacks paid by the
creditors. This creates a built-in conflict of
interest and creates doubt as to whose side the
agency is really on.
Also, Debt Settlement provides
much more flexibility than Credit Counseling in
both the monthly budget level and the types of
accounts that may be enrolled. For example, if
you have a really tough month and need to skip a
payment, that situation can be absorbed by a
Debt Settlement program, whereas it will cause
serious problems with a Credit Counseling
program.
Further, if your accounts have
"charged off" and gone into the third-party
collections cycle, you can still enroll those
obligations in a Debt Settlement program where
they will be rejected by a Credit Counseling
agency.
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Q: What
kind of debt can be negotiated? |
Answer |
A: As a general
rule, any type of unsecured debt can be
successfully negotiated.
An unsecured debt is one that is
not tied to a specific material item that could
be repossessed by the creditor. So an auto loan,
for example, could not be included because the
creditor could legally repossess the vehicle.
Credit card debt, medical bills,
department store cards, signature loans,
unsecured lines of credit, and revolving charge
accounts are all types of accounts that can be
included in our program.
The main exception here are
student loans, which in most cases are
government backed loans that cannot even be
discharged in a bankruptcy proceeding. (Private
student loans that are not sponsored by the
government can be included.)
Also, keep in mind that we
generally caution clients against including
credit union debt, even though it may be
unsecured. That's because a credit union is a
member-owned organization, where a settlement
would come at the expense of your fellow credit
union members.
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Q: What if a
creditor won't negotiate? |
Answer |
A: Liberty
Financial has successfully negotiated with
thousands of creditors all across the nation. In
the course of business, we have established
contacts with the major banks, collection
agencies, and collection attorneys.
Debt Settlement is recognized as
a viable solution by collection industry
professionals, and at Liberty Financial we pride
ourselves on the professional reputation we have
established by dealing fairly with creditors.
In the rare instance where a
creditor balks at accepting a reasonable
settlement at the time it is proposed, it is
often a matter of simply waiting for a different
phase of the collection process.
Some creditors are more inclined
to play "hardball" than others, but virtually
all of the major institutions eventually sell
their accounts to debt purchasers in order to
get what they can for the account. Since the
debt purchasers acquire these accounts for
pennies on the dollar, they are more inclined to
accept a reasonable settlement offer, which
still represents a profit on their purchase.
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Q: Are
there debts that can't be entered into the
program? |
Answer |
A: Secured
debts cannot be entered into our Debt Settlement
program.
This includes home loans, second
or third mortgages, equity lines of credit, auto
loans, and financing contracts tied to a
specific piece of property that may be legally
repossessed by the creditor.
Federal student loans, although
unsecured, must also be excluded from the
program.
In addition, Federal and State
taxes cannot be included.
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Q: Can I do this
myself? |
Answer |
A: Yes, it is
certainly possible for a consumer to negotiate
his or her own debts. However, there are several
important factors that should be taken into
consideration before making such a decision.
First, do you have the
time? For individuals with serious debt
problems, the complexities of the negotiation
process can be very time consuming. Many people
simply do not have the time to add this
labor-intensive task on top of an already busy
work schedule.
Second, it requires a
certain kind of psychological toughness to
haggle with creditors and the ability to stomach
the emotional fluctuations the first time you go
through it because it can be very scary if you
don't know the truth not to mention that the
average consumer is hampered by the
embarrassment and shame they feel over having
gotten into trouble. With all the tricks, traps,
and pressure tactics used by creditors, most
people will find themselves better off with
professional assistance.
Third, as with any
profession, there are techniques not easily
mastered by an amateur. Without professional
coaching, the likely result will be
high-percentage settlements in the best case,
and outright failure in the worst case. When you
consider that the total payout including
professional fees will still be far less than
your original balances, it makes more sense for
the average person to obtain debt help from
Liberty Financial.
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Q: How do
I know Liberty Financial is a legitimate
company? |
Answer |
A: As
with any large industry, there are both good and
bad Debt Settlement companies in operation.
That's why Liberty Financial
fully supports efforts to implement legislation
at the Federal level to ensure that the best
practices are adopted and enforced throughout
our industry.
To that end, we are members of
The International Association of Professional
Debt Arbitrators (IAPDA) , an independent trade
association. IAPDA Certified Debt Arbitrators
and Certified Debt Specialists are trained using
the industry standard of training programs and
are skilled debt arbitration & debt settlement
professionals. Our members are current with the
laws pertaining to debt, credit and collection
and represent their debtor client's best
interests during sensitive debt negotiations
with creditors and collectors.
Clients of Liberty Financial can
be at peace knowing that we are fully committed
to this process. We are very proud of our
reputation and we are constantly seeking new
ways to improve our clients experiences..
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