If the alleged debt collector cannot prove their “standing” to collect on a debt by producing these genuine, original documents, credit applications & negotiable instruments, the alleged debt collector can be completely ignored after sending our specifically crafted series of form letters, notices, and requests for information, qualified written requests (“QWR”), and debt validation/ verification letters (“DVLs”) to the alleged debt collector.
The Foxboro Consulting Group, Inc. Debt Remediation Tools, templates, forms & specifically crafted letters can accomplish these objectives for you.
Debt Settlement – You, or a representative negotiating for you, makes an offer to your creditor to settle the debt for less than what is owed. For example, if you owed $10,000, you might offer the creditor a lump-sum payment of $5,000.
If the creditor accepts the offer, you make the payment and the debt matter seemingly is settled.
We say seemingly, because if you owe more than one creditor, as is often the case, you must go through the process with each one individually, which can be personally time consuming, and demand a lot of paperwork, and follow-up.
So, if you are delinquent on several credit cards or bills (e.g. cable, cell phone, auto loan, medical bills, etc.), you will have to negotiate a settlement with each alleged debt collector, before you are completely out of debt.
In the meantime, you likely will be racking up costly late fees and interest charges on all your debts, and you are watching your FICO credit score plummet from 720 to 540 and lower. In the case of debt settlement Pros and Cons, this is just one of the many Cons associated that make it a dicey choice.
If you are paying a debt settlement company to represent you, here are drawbacks you should consider:
- Additional Fees – Debt settlement companies often encourage you to stop making payments to your creditors while they negotiate a settlement. The late fees, interest and other penalties that follow will be added to the amount you owe already.
- Time Frame – The normal time frame for a debt settlement case is 2–3 years, which means 24–36 months of late fees and penalties added to the amount you owe.
- Impact on Credit Score – Debt settlement will have a negative impact on your credit score. Not paying the full amount is a negative. Missing payments while negotiating a settlement is a negative.
- Impact on Credit Report – The fact that you settled your debt — that is, didn’t pay the full amount — remains on your credit report history for seven years, making it more difficult for you to get credit from any lenders.
- Companies Charge Fees – Debt settlement companies charge a fee, which is usually a percentage of the amount owed, to negotiate on your behalf. The fees generally are 20–25% of the final settlement, so if your final settlement is $5,000, you could owe another $1,000 to $1,250 in fees.
- Lenders May Refuse – Lenders are not obligated to accept settlement offers. In fact, some lenders refuse to work with debt settlement companies.
- Tax Consequences – There could be tax consequences from a debt settlement. The IRS may count whatever amount is forgiven as income and require you to list it on your taxes.
With so many negatives attached to the outcome, many consumers wonder: Does debt settlement really work? We have doubts that it is completely effective, and may not be the optimum solution for you.
For people who feel helpless with their financial situation, and don’t want to declare bankruptcy, the FCGI – Debt Remediation Process could be the short-term answer.
However, if there is a chance to weigh the advantages of the FCGI – Debt Remediation Process vs. debt settlement, the safer choice is Foxboro Consulting Group, Inc. Debt Remediation Process.