Debt Relief Frequently Asked Questions
What type of debt can you settle?
Rescue Debt Solutions can only settle unsecured debt, which is any debt that is not tied to collateral or tangible property. The unsecured debt that qualifies for our program includes credit cards, medical bills, repossessions or collections, and any unsecured line of credit, including personal loans or lines of credit. Rescue Debt Solutions does not settle secured debt such as mortgage or home loans, student loans, auto loans, utility bills, lawsuits, or government debts.
How long will the debt settlement program take?
On average, the length of our program is 14 to 48 months, depending on your financial situation. Once you build up your debt reduction account, we can begin negotiating with your creditors and reducing your enrolled debt.
What fees will I be charged?
Rescue Debt Solutions charges service fees. You will not have to pay these fees up-front when you enroll in our debt settlement program. Our fees are deducted from your debt reduction account over a 7-24 month period. Total fees will be determined prior to program enrollment.
How do I know if I’m eligible for debt relief?
Rescue Debt Solutions can settle unsecured debt, including credit cards, medical bills, unsecured personal loans or lines of credit, and repossessions and collections. You must have a minimum of $7,500 in debt in order to qualify.
Am I obligated to enroll once I apply?
Our debt relief consultations are free and there is no obligation to enroll. Call (888) 492-9199 for a free consultation today.
Can I keep my credit cards once I’m enrolled?
Our program does not require you to cancel or cut up any of your credit cards, but we do highly recommend that you stop using credit and refrain from opening new lines of credit once you enroll. We begin negotiating with your creditors based on the debt amount stated when you enrolled, so any added debt could prolong or complicate the negotiation process. Some of our clients designate a credit card with a low interest rate to use only in case of emergencies.
How will debt settlement affect my credit?
Debt Settlement will have a negative effect on your credit for as long as you are in the program. Debt settlement does not repair your credit, and there is a chance that your credit score could be affected during the debt settlement process if you’re not making your minimum monthly debt payments. But unlike bankruptcy or credit counseling, debt settlement will never show up on your credit report. After successful completion of the program, your credit report will only show that your debts have been “settled.”
Will debt settlement make me completely free of my debt?
The debt you enroll in our debt settlement program can only be unsecured debt. Our goal is settle the unsecured debt that you enroll with us by negotiating with your creditors on your behalf for lower payoff amounts than what you currently owe. In order to settle these debts you will have to pay the negotiated amounts to settle. Once you’ve paid off all your settled debts you could be in a better position to tackle your secured debt if you have any.
Do I have to take out a loan with debt settlement?
No. Taking out a loan is only required with debt consolidation programs, not with debt settlement programs.
What is a debt reduction account?
A debt reduction account is set up as part of your Rescue Debt Solutions program. It is an FDIC-insured account that you set up in your name and that only you control. The account is created for your monthly program payments while you’re enrolled in the program. The funds used to pay your creditors as well as your program fees are drawn from this account. Since you control the account you have to authorize every deduction that comes out of the account; we never have control of the account or the funds in it. And you can keep the account open and use it as a regular savings account after you completed your debt settlement program with us.
How will debt settlement affect my taxes?
Any “forgiven debt” you pay as a result of our debt settlement negotiations is considered taxable income by the IRS. The IRS requires you to pay income taxes on any forgiven debt. Some of our clients may be able to avoid paying taxes on forgiven debt due to economic hardship. Contact a tax advisor about IRS Form 982 if you’d like more information on this option. Rescue Debt Solutions is not responsible or qualified to assist our clients with any tax-related issues that result from your debt settlement program.
What is the difference between a debt settlement plan and a debt management plan?
Our debt settlement program is designed to work with your creditors on your behalf to negotiate lower payoff amounts on your unsecured debt. You make monthly program payments into an FDIC-insured debt reduction account that is used to pay your creditors.
Debt management is an alternative to debt settlement that does not result in you paying less than you owe; you will typically still have to pay back 100 percent of your debts. However, debt management may have less of an effect on your credit than debt settlement and may help you negotiate lower interest rates, lower monthly payments, or late-fee waivers. Depending on your debt, your credit, and how flexible your creditors are, debt management may be an option for you.
Will enrolling in a debt settlement plan stop all my creditor calls?
We will do our best to stop the creditor call but we can’t guarantee they will stop. We do enroll you in UCAN who is a consumer advocacy group to make sure no laws are violated by your creditors. UCAN, with your assistance, monitors the collection activity and pretects your rights from abusive behavior by debt collectors.
