The PBS program is intended for individuals that have experienced setbacks in life, struggling financially or no longer able to maintain the necessary payments on their unsecured debt. As with any program, the benefits, such as avoiding bankruptcy, being debt free, having cash to live on and the peace of mind that comes with completing our program, need to be balanced against the possible negatives. Please read through the following questions and answers so that you will be fully informed.
1) Why should I read through all of these questions and answers?
2) How do you reduce my debt and can you reduce ALL of my debt?
3) Why should I use PBS?
4) Who can this program help and can bankruptcy be avoided?
5) What happens in my free consultation?
6) What do debt consolidation loans do?
7) What happens when a settlement is made?
8) Can you stop creditor harassment?
9) How long will it take to settle my debts and when do you start settling?
10) Can you do this on your own?
11) Interest rates and late fees
12) Can you keep you credit cards?
13) Is this legal?
14) Will you need to come up with a lump sum?
15) What types of debts do we handle?
16) Will you sell my name or address to outside parties?
17) What will happen to your credit report?
18) Will the creditors take legal action against you?
19) Will I owe money to the IRS for my reduced settlement?
1.
Why should I read through all of these questions and answers?
It’s
a good idea to be well informed so that you’ll know what to expect
both positive and negative of a debt settlement program.
Additionally all negatives
just like all benefits will not apply to every case. For example
when you take your child to get their wisdom teeth extracted you
sign a form stating that you understand that complications like
infection, swelling, allergy to anesthetic, including the extreme
of their jaw being broken, could occur during the procedure. Yet
how many children have their wisdom teeth out safely every week?
Some of the negatives are rare and some happen more frequently
but either way you must be informed. For this reason we have included
them in the Questions and Answers as well as the paperwork you
sign when you become a client.
Wouldn’t it be
good if your credit cards had come with similar disclosures?
Likewise some statements
have to be made that are common sense but must be stated anyway
just in case someone misconstrues the meaning. For example, some
collapsible strollers and cribs now come with the warning: Remove
baby before collapsing. And some plastic trash bags and plastic
dry cleaning bags are printed with the warning: Do not place over
nose and mouth. Similarly we have to make certain statements for
your protection as well as ours.
So please read through the rest of this page and we can answer any additional
questions you might have in your consultation.
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2.
How do we reduce your debt and can we reduce all of your debt?
The debt
is reduced through a series of negotiations with the creditor for a lower payoff of the balance owed. Your hardship and financial situation is explained and a mutually agreeable reduction of the debt is agreed upon. You approve all settlements before they are finalized
and then pay this reduced amount to the creditor. This
completely eliminates the debt so no further action can be taken by the creditor.
We do this several ways
and at times the client may need to participate
in the settlement process under our strict guidance. This depends
on your particular creditors and the situation. The fee structure
does not change no matter how long or short the negotiations take
or the manner in which the settlement is done. On average we arrange
settlements of around 30-50 cents on the dollar (not including
other fees, etc.), some are lower and some may be higher.
Our goal is to arange
mutually agreeable settlements with the creditors on all your unsecured
debts. However, NO company, including ours, can
promise or guarantee that all debts can be negotiated
or reduced or that all creditors will work with them. We are persistent
and do our best but there may be occasions when a debt cannot be
reduced or a creditor will not negotiate with us. But that being
said our goal to get you out of debt remains the same and we do not get paid for a particular debt unless we get a settlement on that debt.
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3.
Why should you use PBS?
PBS is not paid by any other organization and is working only for you to eliminate your debts as quickly as possible. If we do not
reduce the debt and save you money, we do not get paid a settlement fee. Additionally
we never hold or handle your money so you remain 100% in control at all
times.
Except
for the initial set up/retainer fee, we get paid purely on our
performance, based on a percentage of the debt that we eliminate.
We charge amongst the lowest up front fees in the industry and
no monthly service fees. This means we are motivated to settle
your debts and get you out of debt as soon as possible.
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4.
Who can we help with our program and can bankruptcy be avoided
in all cases?
We can help anyone who has over $10,000 in debt and having
difficulty making minimum payments to creditors, falling behind every month as well as people finding themselves in
deeper trouble and exhausted with the stress and frustration that
is connected with debt.
Our
clients have legitimate financial hardships and generally would
not qualify for other debt programs, such as consumer credit counseling
or debt consolidation loans, etc. Despite their financial problems
our clients want to avoid bankruptcy and find an alternative route
out of their debt problems.
Note
on bankruptcy: Our clients come to us already in trouble and other
problems may arise while on the program. Although we do our best
to help our clients who want to avoid bankruptcy through settling
their debt, we cannot promise or guarantee that a client will not
have to file for bankruptcy. (If you have questions about bankruptcy
please seek legal advice.) However, we take on clients that we
believe have a good chance of completing and hundreds have done
so.
Call us for a free phone consultation to find out what we can do for you at (800)
404-8687.
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5.
What happens in your free consultation session?
We review your financial situation and go over what happened to create you
hardship, your debt, income and expenses and provide possible solutions to
get you out of debt. We give you a rough idea on the sort of reductions we
might be able to obtain from the creditors and an estimate of how long before
you could be debt free. You will have the feeling that perhaps there is a way
out of the stress and financial problems that you have been having.
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6.
What do debt consolidation loans do?
Usually Debt Consolidation loans simply transfer the debt from one place to another
and normally take an unsecured debt and change it into a secured debt. The fact
is: you cannot borrow your way out of debt. About 65% of people who obtain a
debt consolidation loan find themselves in deeper debt a few years later. The
main problem with consolidation loans is that once you have paid off the credit
cards you have a whole new source of spending power: empty credit cards.
It
normally does not take long before these cards are maxed out again
and you're in a worse financial situation. You end up not only
having to pay back the cards
but also the consolidation loan. If you start missing payments on the consolidation
loan, you stand to lose the asset (usually your home) that the loan is secured
against. Usually Debt Consolidation Loans are not a way out of debt, but
a way into deeper financial trouble. We have clients that came
to us precisely because
of this situation.
There
are times when consolidation loans are beneficial. If your income
is stable and your payment will be reduced to a level you can handle
for years
then this
may be a solution but you must, must, must stop using credit cards and
change your habits so that you do not end up deeper in debt.
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See Consumer Credit Counseling & Debt Consolidation
7.
What happens when we reach a settlement?
When we feel a settlement is likely to be reached (this depends on a number
of things, including timing, how old the debt is and your available funds),
we begin negotiations on one or more of your debts. Once a settlement is reached
it is approved by you before it is finalized. You then pay this reduced amount
to the creditor, usually in a lump sum or over a couple of payments. This settles
the debt and eliminates it so you never have to worry about it again.
The
settlement is always in writing. You will receive a letter from
the creditor stating that they have settled with you for the amount
stated on the letter.
Once final payment has been made per the terms of the settlement then no
further money is owed on that debt. And that is one more debt gone!
The creditor will
then report this to the credit reporting agencies normally stating that the
debt was settled for less than the full amount and that you have a zero balance
in regards to that debt.
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8.
Can we stop creditor harassment?
If you read books on how to handle debt, they will tell you
about a “Cease and Desist” letter that forces the
creditor to stop calling you. These work BUT will often lead
to legal action so we don’t use them and don’t
recommend using them. BEWARE of other settlement companies
that state that they can stop all calls from creditors. Yes,
it is true that they can with that letter but taking this road
often leads to faster legal actions and suits.
A
creditor has the right to collect on a debt and will continue in
their efforts to do so until such time as that debt is settled.
As accounts are generally not settled until they are delinquent
6 months or more, creditor collection efforts may become
more
aggressive. The volume of calls decrease as we settle your
accounts because after an account is settled, no further
collection effort is taken on that particular account. Our
goal is to
get you completely out of unsecured debt, which is a final
handling to creditor harassment.
See your
rights under the Fair Credit Collection Practices Act
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9.
How long will it take to settle my debts and when do you
start settling?
Our average client can be debt free in just 25-30 months
but this is an estimate and can vary due to a number of factors. These
factors include the funds that you have available to settle with, how
delinquent your debt is (debts are usually settled after they are delinquent
at least 6 months or more) and how your creditors respond
We have many years of experience in reaching settlements. Although
we cannot guarantee a reduced settlement in 100% of all debts our
average has been around 55 - 65 cents on the dollar, including all
payments
and fees to completely eliminate the debt.
The point at which we contact creditors varies widely with the strategy
for that debt and depending on the creditors you have there may be
creditors we do not contact directly but handle other ways.
The time it takes to settle your debts is mainly dependent on two
things: your financial situation (the money you have to settle with)
and the
creditors’ response. Usually things progress but it can happen
that a creditor can be ready to settle but your funds are not yet
available; or your funds are available but the creditor is not willing
to settle
at a reasonable amount at that time and will take a little longer.
If a client stays on track and their creditors’ response is about
average they can expect to complete the program around 25-30 months.
Obviously if your financial circumstances worsen or a creditor is particularly
difficult then it can take longer than estimated. Quite a few of our
clients finish sooner. Every situation is different and we will be
happy to discuss this with you during your free confidential phone
consultation. (800) 404-8687
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10.
Can you do this on your own?
Yes, this is possible and it can be done if you are tough, persistent and lucky,
but the amount saved will not necessarily be less than using a professional.
Creditors deal with thousands of people who are in financial difficulty every
day and have a vast array of sophisticated (and some rather blunt) methods
of intimidating you into financial arrangements you cannot keep. Also, everything
you say to the creditor is written down in their computer. You may think that
you are being honest or expressing your feelings at a nasty creditor and say
something that will prevent a good settlement.
The
process is usually very emotional, stressful (especially when it's
you who are the one being attacked by collectors over the phone)
and time consuming.
By letting PBS do what we do best, you will get settlements with considerably
less stress. Remember, we have years of experience in dealing with creditors.
Although
you could change the oil in your car and probably learn how to
fix the transmission, most people would prefer to get on with their
own lives
and pay a professional to do it.
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11.
Interest rates and late fees
The majority of our clients are already at or near the
point of falling behind on payments. However, we still need to
point out that not only will interest, late and over limit fees
continue to accumulate, but also that most banks will raise the
interest rates (if they haven’t done so already) when a
debtor is delinquent. This can be true for all cards even those
you may not have put on the program because they have a zero
balance. If payments are not being made, then late fees, penalties
and interest may accrue on a debt and you will see the total
debt increase before the first settlement.
This increased balance is negotiated in the settlement process,
but is important to recognize that the balance can continue to grow
until the account is settled. Speed of resolving debt is a factor
as the faster one can resolve a debt the more likely one is to pay
a lesser amount due to a lower balance. This is why we sometimes wait until
after the settlement to collect our fees as you can normally eliminate
that debt 2 or more months quicker, reducing the amount owed. This
is also why it is so important to go with a program that is under
30 months.
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12.
Can you keep your credit cards?
All unsecured debts over $500 has to be included in
our program. If all open accounts haven't been closed already, the
creditors still may cancel them, as you are delinquent on other accounts.
This would also extend to any other lines of unsecured credit you have
with that creditor or other creditors. We do not want you to apply
for further credit or use credit while on the program.
It
was probably the ease of using the cards that got you into trouble
in the first
place and it is prudent that use of these cards stop.
When you have completed the program we want you to be debt free;
not stuck with remaining debt, which would probably cause you future
problems.
If you wish to keep a card for emergency sake it is best to set
aside one paid off card, which is separate from any creditor being
settled,
locked up and secure. As a caution do realize it is possible and
within creditor rights to close this card as well.
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13.
Is this legal?
Absolutely. This is completely legal. For many of our clients, it is the only
effective way of ever getting out of debt. However, PBS is not a law firm and
cannot give legal advice. Without the use of debt negotiations, bankruptcy would
be the only option left for many of our clients. Through our negotiation efforts,
the creditors do recover a portion of the amount owed. So this is a usually win-win
situation for both client and creditor.
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14.
Will you need to come up with a lump sum?
It is always helpful if you can come up with a lump sum and can speed up the
program. We will go over this with you if necessary in the consultation because
each client’s situation is unique. Most of our clients, however, are on
a limited budget and can only settle one debt at a time. It is mainly your financial
situation that dictates how fast we can settle your debt and how quickly you
complete the program. In some cases relatives or friends have lent money to help
pay off on a good settlement, (say a $10,000 debt down to only $3,000 when the
creditor wanted a lump sum payment). We may ask you to look at these options
if we can get a really good settlement for you.
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15.
What types of debts do we handle?
We deal with all forms of non-secured debt whether it be credit card, store
cards, medical bills, disputed bills, personal loans, business debts, etc.
Unfortunately we cannot deal with secured debt although we do take secured
debt into the equation when organizing your financial plan. We do not negotiate
with creditors under $500 (although we must know about them) and you must have
at least $10,000 in total debt to qualify for this program.
Please
see our Privacy Notice.
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16.
Will you sell my name or address to outside parties?
Absolutely not. Under no circumstances is any information that you give us passed
on to any other party for any reason. All information is considered highly confidential
and personal.
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17.
What will happen to your credit report?
PBS is not a credit repair company nor are we trying to improve your credit rating
during or after the program. Our goal is to get you out of debt. However, your credit score is made up of 3 parts of which around 35% is the payment history, 30% your debt-to-income ratio and 35% other factors such as new debt, length at job, if you own a house etc. You can get more information at www.myfico.com on how this is based.
When a debt is settled it is normally reported as “settled
for less than the full amount” (this is a general wording and it could show differently) and will show as a zero balance. By eliminating your debt, your debt-to-income ratio will dramatically improve thus improving that area of your report. Being debt free does positively affect your
rating. However, your payment history will be effected.
Our goal is to eliminate your debt so you can start putting away money
ever month. This will allow you to live on a cash bases so you
never have to worry about your credit report again.
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18.Will
the creditors take legal action against you?
Until a debt is settled, there is the possibility of a suit, a judgment or
garnishment. Creditors do have the legal right to pursue a debtor in a court
to collect the debt. We have successfully negotiated debts through all phases
of a legal action. We are not lawyers and do not offer legal assistance or
advice. We always recommend that our clients seek competent legal counsel at
such times. (They should charge a reasonable fee for this.) If needed, we can
help you to find a local lawyer to assist you with any responses or filings.
In
the course of handling a client's debt we can and have gotten settlements
at every stage of the legal process of collecting debts. Clients have come
to us after receiving summons, judgments/liens and wage garnishments. Even
in these cases most of these could be settled, though sometimes at a higher
percentage than settlements that have not gotten to this stage. While it
is not normal to happen with all cards it has become more and more
of a possibility
and one should be aware of it.
The
settlement is always in writing. You will receive a letter from
the creditor or their lawyer stating that they have settled with
you for the amount stated
on the letter. Once final payment has been made per the terms of the settlement
then no further money is owed on that debt. And that is one more debt gone!
The creditor will then report this to the credit reporting agencies normally
stating that the debt or judgment/lien was settled for less than the full
amount and that you have a zero balance in regards to that debt.
Once again, our goal is to settle your debts as rapidly as your resources allow. This ends all collection related activity on a debt.
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19.
Will I owe money to the IRS for my reduced settlement?
If your assets (savings etc.) add up to more than your debts you may have to pay Federal/State taxes on your forgiven debt.
The IRS requires that when a creditor reduces a debt by $600 or
more that the creditor issues a 1099-C Form (basically a form that
states types of income received). The creditor normally sends this form to the IRS and
to the debtor.
Most of our clients fall under the IRS definition of insolvency
and, as such, it does not effect them as a taxable item. For
more information visit the IRS web site at www.irs.gov. Go to “Search
Forms” for form 982. The paragraph close to the top of the
second page of the form defines “insolvency.”
We do not offer tax advice and you should consult your tax preparer/accountant
to see if this would apply to you.
Summery
Basically the reduction and elimination of debt
for an individual can be a complex action and unique to each individual's
circumstances. Doing your homework and asking the right questions
to make sure the company you choose can get the job done is an important
step. In particular, beware of companies that charge high fees up front
or claim that they can "stop all calls", can settle your
debt for unreasonably low amounts and promise to handle any situation
or bank with ease. For more information please see the "Choosing a company" page.
We have arranged thousands of fair settlements with creditors that
allowed our customers to be freed from crushing debt. We have helped
100s of clients avoid bankruptcy that would have followed them
for the rest of their lives. Apart from a small set up fee and a token retainer towards
your settlement fees, we do not earn anything until we settle your account.
This way we are motivated to get you what we promise - debt free and able to avoid bankruptcy. Contact one
of our consultants for more information on how the program works
and if it's a fit for you.
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Take
Your First Step To Becoming Debt Free
Call for your free phone consultation
today!
(800)404-8687 or (818)630-5080
Find
out how to get started
