Common Concerns
Financial hardship is stressful enough. We take the guesswork out of your debt resolution journey providing transparent answers to the most common concerns our clients have.
Our Clients Most Common Questions
What happens to my credit score?
Most client credit is already being negatively impacted by poor payment history and amounts owed, which are the two largest factors of your credit. Whether your credit is maxed out or you have a high debt-to-credit or debt-to-income ratio, chances are that your credit has been negatively impacted.
Our goal is to help you resolve your debt quickly, so that you can start building a brighter financial future (including a more positive credit score) as soon as possible. Everyone’s specific credit situation is different, but in general, enrolling in any debt resolution program could have a negative impact on your credit. The good news is that, while you may take one step back with your credit, you’ll take five steps forward with resolving debt. In the long term, the credit effect could be much more positive; Once your debts are resolved, you can practice positive credit behavior to build your credit score back up over time.
Do I have to stop using my credit cards?
Yes. The accounts being enrolled will be closed. However, this is not to say you cannot get new credit cards in the near future.
Will I face legal action from my creditors?
Legal action by creditors could occur. If you do receive a legal notice, please send it to your servicing team so they can prioritize this creditor or lender and work to settle it first.
Rather than taking legal action, a more common step creditors take is selling your debt to third-party collection agencies and/or law firms. When something like this happens, this particular creditor or lender might get moved to a priority list.
If a lawsuit does get filed against you, your settlement negotiators can attempt to resolve that creditor or lender’s account by setting up a specific payment plan. They also may be able to refer you for further help if needed.
Note: We are not a law firm and can’t offer any legal advice.
Will I have any tax consequences?
While the answer can be different for everyone, in general, forgiven debts can be taxable. When tax time rolls around, you’ll likely receive a Cancellation of Debt form (1099-c) from the lender that forgave your debt.
To find out about your specific situation –and understand the potential tax implications of any debt that’s been forgiven through a debt relief program– it’s a good idea to talk to your tax advisor.