Frequently Asked Questions
We have compiled some of the most commonly asked questions for our readers:
Any consumer needing Debt Relief can benefit from our services. Also, those in need of Mortgage Financing and Real Estate Investments.
Unchain Your Credit is not a lender. However, we can facilitate.
Debt settlement, also called “debt relief” or “debt adjustment,” is the process of resolving delinquent debt for far less than the amount you owe by promising the lender a substantial lump-sum payment. Depending on the situation, debt settlement offers might range from 10% to 50%, or more, of what you owe. The creditor then has to decide which offer, if any, to accept.
Consolidation reduces creditors, while Settlement reduces debt.
Debt consolidation is a way of simplifying your finances and reducing the amount of interest you’re paying on loans and credit cards. It will not adversely affect your credit rating, but it likely won’t help you pay off your debt quickly.
The percentage of a debt typically accepted in a settlement is 30% to 80%. This percentage fluctuates due to several factors, including the debt holder’s financial situation and cash on hand, the age of the debt, and the creditor in question
When you hire a debt settlement firm to settle your debts, you will pay the firm a fee that’s calculated as a percentage of your enrolled debt. Enrolled debt is the amount of debt you come into the program with. By law, the company can’t charge this fee until it has actually settled your debt. Fees average 20% to 25%.
If you have a poor and/or thin credit history, it could take 12 to 24 months from the time you settled your last debt for your credit score to recover. Either way, you’ll benefit from debt settlement if that means you’re no longer missing payments.
Debt relief actions may have an impact on your credit, but it depends on which method you choose. Even if your credit score has taken a hit as a result of financial hardship or mismanagement of debt, it’s not too late to get relief and prevent any further damage to your credit.
As you start settling your debts, there are five steps you can take to rebuild credit:
- Monitor your credit report. As you begin to settle your debts, keep an eye on your credit report.
- Apply for new credit.
- Become an authorized user.
- Pay your bills on time and in full.
- Get a small loan.
Debt relief programs are meant for larger amounts of debt because creditors are unlikely to settle on debts that are smaller and easily paid off in a short amount of time. Debt relief programs usually only deal with unsecured loans, which are loans that do not involve collateral.
Many federal benefits are generally exempt from garnishment, though they might still be garnished to pay delinquent taxes, alimony, child support, or student loans. States have their own laws about which state benefits can be garnished.
Back taxes are taxes that have been partially or fully unpaid in the year that they were due. Taxpayers can have unpaid back taxes at the federal, state and/or local levels. Back taxes accumulate interest and penalties on a regular basis.
If back taxes remain unpaid, in some cases, serious legal action can take place. The IRS may seize property, seize assets, place liens on the property, or garnish wages.
Yes. We can help you get a Legal Protection Plan to cover you all the way through settlement.
Yes, but the collector must first sue you to get a court order – called a garnishment – that says it can take money from your paycheck to pay your debts. A collector also can seek a court order to take money from your bank account. Don’t ignore a lawsuit, or you could lose the opportunity to fight a court order. Please note that the legal protection plan will cover you through trial, if necessary. However, it is vital we are informed immediately once you are served.
The only out of pocket expense are court filing fees.
No. Debt collectors can’t contact you at inconvenient times or places. They can’t contact you before 8 a.m. or after 9 p.m., unless you agree to it. They also can’t contact you at work if they’re told you’re not allowed to get calls there.
A debt collector generally can’t discuss your debt with anyone but you or your spouse. If an attorney is representing you, the debt collector has to contact the attorney. A collector can contact other people to find out your address, your home phone number, and where you work, but usually can’t contact them more than once.