Debt Settlement FAQ's

Q: Why would my creditors agree to settle for so little money?

A: While it may seem strange that your creditors would agree to settle for less than what you owe, the fact is that in most cases they will settle for as little as 40 to 50 cents on the dollar. Creditors do not like to have accounts for which they do not receive payments. If a bank has too many "non-performing" accounts, it makes the bank look like it is making poor lending decisions and taking too much risk. This can harm the bank's standing with both the Federal Reserve Board and investors, two groups on which all banks depend to operate. Therefore, most banks will accept much less than the balance on delinquent accounts simply to clear their books.

Q: Can I negotiate with my creditors on my own? Why should I hire DRP?

A: As one of the largest debt resolution firms in the United States, the experience we have gained working hard for so many clients is invaluable. We know how much each creditor will accept, the best time to settle, and how to best approach each creditor to maximize client savings. We have also built an unrivaled team of settlement negotiators, many of whom have extensive experience in the collections industry. They know how collectors think, know how to talk to them, and can see through the collector scare tactics which so often inhibit people from negotiating successfully on their own. Our negotiators have also built an extensive network of contacts within the credit card banks and collection agencies, which gives our clients a distinct advantage over those attempting to negotiate without professional assistance.

Q: Will debt resolution hurt my credit standing?

A: Credit scoring depends on too many factors to give an absolute answer to this question. In any debt settlement program, your unsecured accounts will become delinquent and in many cases our clients' credit scores do go down temporarily. However, once your accounts are settled, your credit report will show that the accounts have been paid and reflect zero balances. Clients who have graduated from the DRP program report that their credit rebounds to a reasonable level within a couple of years, though the time will vary depending on other factors. Unlike filing bankruptcy, which reflects on your credit report for up to ten years, your participation in a resolution program is not officially reported on your credit report. Keep in mind that all debt relief options, other than simply paying off your accounts or taking out a debt consolidation loan, are likely to negatively affect your credit. If you are struggling to pay your minimums, it may be worth it to you to take a temporary hit on your credit in order to free yourself from your debt burden.