Frequently Asked Questions
1. What does EFS do?
We negotiate credit card debt and other unsecured debt between you and your creditors. We are a team of professional negotiators who are trained to effectively negotiate the largest possible reductions in principle and interest from your creditors. This process usually results in up to 50% reduction of debt providing you with debt relief.
2. Who qualifies for EFS debt settlement service?
To qualify for our program, you must have a legitimate financial hardship, at least $15,000 of unsecured debt and have a strong desire to become debt-free. At this time, we can only accept US citizens.
3. What types of debt does EFS settle?
We work only with unsecured debt. This includes:
♦ Credit Cards
♦ Retail Store Cards
♦ Gas Cards
♦ Medical Bills
♦ Personal Loans
♦ Prior Apartment Leases
♦ Other Non-secured Loans or Debts (check with our debt consultant if you have any questions.)
4. How do my creditors get paid?
After signing up for our program, a special “debt settlement account” will be set up at a federally insured bank under your name. You will remain in control of this account and when enough money accumulates, through monthly payments, to make a settlement with a creditor. All payments to the creditor will come out of this account. Since the funds are in your “debt settlement account” we can not disperse funds for a settlement without your approval. We will negotiate with each creditor, one by one, for the best settlement possible.
5. How long does the EFS debt settlement service take to complete?
The answer to this question is primarily based upon how much money you will be able to set aside each month to eliminate your debt. Typically, the more money each month, the sooner you can be out of debt. You will discuss your financial situation with a Debt Consultant to determine how much money you will be able to set aside each month so you can get out of debt as quickly as possible.
Clients can typically be out of debt in as little as 36 months.
Please note that EFS expressions about the outcome of any matter are its best professional estimates only, and are limited by your financial resources at the time settlements are obtained with your creditors and your creditor’s disposition toward proposed settlements. Individual results may vary.
6. Will the creditors continue to call and harass me?
Once we send out a Limited Power of Attorney telling your creditors that we are representing you, the calls will begin to stop. It is really a team activity, between you and EFS, to eliminate the calls.
Sometimes, a creditor will continue to call you until we tell them to call us, and they change the phone number in their computer to ours, at EFS.
7. Couldn’t I negotiate with the creditors on my own?
Although it is possible, it can be very difficult to negotiate with a creditor on your own. They deal with thousands of people who are in your same financial situation every day and have refined procedures and sometimes harsh methods of getting money from you. Knowing how to deal with their methods and having in-depth knowledge about how these institutions work can potentially save you thousands of dollars and free you from a considerable amount of stress.
8. Should I pursue Bankruptcy?
We suggest consulting with an attorney for legal advice and to fully answer all your questions concerning bankruptcy. It may be best to try and resolve your debt situation through a debt settlement program, prior to making such a critical decision. The EFS debt settlement program falls between bankruptcy and credit counseling services. Bankruptcy is a permanent decision that will stay on your credit for 7-10 years and can negatively affect you in many different ways. Besides being a devastating hit to your credit it can also affect things like your ability to get a job. Home lenders are now asking, “Have you EVER filed for bankruptcy?” So even if the bankruptcy falls off your credit report, it could still potentially haunt you for the rest of your life. We recommend that you consult with an attorney if you are considering bankruptcy.
9. How will this program affect my credit?
One of the biggest reasons a person has bad credit is NOT their payment history, but how much available credit they have and how much they use. Using more than 35% of the available credit can bring down your credit score.
Creditors tell you that if you don’t make your minimum payment, you will have bad credit for 7 years. But, if you make just the minimum payments to your creditors, you can be in debt for 30 or more years. They WANT you to make payments for 30 years, since their profit comes from the compounding interest. Naturally, they may try and scare you about bad credit for 7 years to keep you in debt for 30 years.
The focus of our program is to get you out of debt as quickly as possible and get you back in control of your financial situation. It will negatively impact your credit while you are going through the program, but it is much better than the alternative of being in debt for 30 or more years and continuing to work to pay the creditors. “I owe, I owe, so off to work I go” is completely relevant to most people’s debt situation.
The good news is, at the successful completion of our program, your debt will have been paid off faster and your number one credit problem, too much debt, will have been handled. With our program you can truly start repairing and building great credit.
Once you are out of debt, our program includes Free Credit Clean Up Assitance, to bring your credit score up as high as possible. There are simple steps that, thanks to the Fair Credit Reporting Act, any person can take to ensure that their credit score is where it should be. We have access to a number of resources that will assist you with this process.
Please note that non-payment of monthly minimum payments to creditors will be reported by creditors to the major credit reporting bureaus and such non-payments will have a negative impact on your credit score.
10. Do I need to be concerned about legal action from my creditors?
Legal action may be taken, but it is still possible your account can still be settled before, during or after a suit. Legal threats are always scary but EFS will continue to work toward the goal of a settlement.
11. What if I’m sued and the creditor gets a judgment against me?
We will continue to work with you toward the objective of a settlement with the creditor.
Here’s some facts: Right now in the United States there is between 200 and 300 billion dollars worth of uncollected judgment debt. The court does not require the loser to pay. The court may not even help to collect the judgment. We negotiate all types of unsecured debts, which include judgments, typically settling for as little as 50 cents on the dollar. In many cases debt can be negotiated down regardless of what stage of collections it is in.
12. Will your program prevent legal action against me?
Despite any legal action that may or may not be taken, it is still possible that your account can be settled before, during or after the suit. Just because an account goes legal does not mean that we cannot settle it. The threat of legal action can be the scariest threat of all, but in many cases, it can still be handled. Our program will not prevent legal action from being taken by your creditors.
13. Are there tax consequences of a successful settlement?
Sometimes a creditor will send a 1099C statement for the amount they have written off when settled. The government calls this forgiveness of debt income. It may be possible to use the exception in the tax law; if insolvent you do not have to pay tax on it. You should check with an accountant to see if you qualify for this exception and refer to: www.IRS.gov Publication 908.
14. What kind of results can I expect from this type of program?
I hear a lot of people are being told by their banks that they will not work with debt settlement or debt negotiation companies. Rather than play a game of “their word verses mine”, I have posted copies of actual settlement letters that we have recently recieved as part of our program. CLICK HERE and see for yourself.