Frequently Asked Questions
Debt Settlement means that your principal balance of debt is negotiated down to a lesser amount. Debt settlement can be an attractive option if you have more debt than you can pay off in a short time frame or if you’re unable to make the minimum monthly payments due to financial hardship. With a debt settlement program, MDS will negotiate on your behalf in order to lower your principal balance. In most cases, you can also lower your monthly payments due to the lower principle balance.
It’s not surprising that the idea of paying less than what you owe to creditors can sound too good to be true. Chances are you’ve seen advertisements for debt settlement and wondered if there was any legitimacy to the claims. Debt settlement is absolutely a viable option for people who have hit financial hardship. If you are unable to make monthly payments to your creditors due to true financial hardship, more often than not they are willing to negotiate a lower principle balance to retrieve some of what you owe as opposed to nothing. This is why paying less than what you owe is a reality for many Americans who are struggling to pay off their debt.
How does it work?
At first glance, settling your debt sounds like an extremely complicated process and can be a little intimidating to tackle on your own. After enrolling in a debt settlement program, the company or firm will take on the burden of dealing with harassing creditors and serve on your behalf to negotiate the lowest possible payoff amount to the creditor. MDS will help you pick out a customized program that fits your needs and will set you on a path to lower monthly payments and becoming debt-free at your own pace.
During the debt settlement process, there is a chance that creditors will attempt to contact you about payment. There are several options to help alleviate the calls from creditors including call forwarding options and education on FDCPA rules. It is extremely important to know your rights as they will protect you from harassment and MDS will empower you to take control. With this in mind, most creditors will respect the fact that you are being represented by a third party and will start communicating with the third party upon realizing that you have enrolled into a program.
Settling your own debt is possible, but could be problematic without representation of a company or law firm with experience dealing with creditors who could put obstacles in your way. Here are some of the benefits using MDS to help you settle your debt:
- Experience dealing with these issues. With a law firm you receive full legal representation of the law firm throughout the entire process
- Avoid paying a high lump sum that creditors will often require when you settle on your own
- Full protection from MDS in the event creditors decide to sue you
- More time to save money in a special purpose account (SPAA) during the settlement process
There are many factors that are taken into consideration when determining if you are qualified for debt settlement. All of our well-trained Debt Analysts can go over your options in detail. Generally speaking, the qualifications are as follows:
- You have more than $10,000 in debt
- You currently can’t afford to pay more than the minimum monthly payment
- You anticipate not being able to afford minimum monthly payments due to unexpected financial hardships including but not limited to divorce, unemployment, and medical debt
- Credit Card Debt
- Unsecured Loans
- Vehicle Repossessions
- Collections
- Medical Debt
- Business Debt
We customize our payment plans to fit the varying needs of every client. Once you’ve been successfully enrolled, MDS programs can vary depending on the type of program you choose.
There are many benefits of debt settlement, but the reality is that settling your debt will negatively affect your credit. However, in many cases this is still a better option than Credit Card Counseling or Bankruptcy. Bankruptcy may affect your credit score for 7-10 years, and credit card counseling programs can last up to 5-7 years with you paying back 100% of your principle balance. With debt settlement, you can potentially resolve your debt in less than 3 years and pay a less than your principle balance.
- Debt settlement (unlike bankruptcy) is a private negotiation with our legal team and your creditors. Bankruptcy is a public filing that is accessible to everyone including potential employers, current creditors, future creditors etc.
- Bankruptcy can stay on your credit report for the next 7-10 years
Although there are fraudulent companies posing as debt settlement companies, there are plenty of legitimate ones that can help you get out of debt. Mediator Debt Solutions is an established law firm with an A+ rating from the Better Business Bureau and is regulated by the State Bar. Our client’s results are our number one priority.