Frequently Asked Questions
How do I get started?
Getting started is as easy as picking up the phone or chatting live with one of our credit specialists. It’s totally free and there’s no obligation to do anything further. The specialist will explain how our proven process works, and if the program is right for you, enrollment can start immediately. We will then work directly with your creditors so you do not have to communicate with them directly in most cases. We will work with you to produce a reasonable plan to budget your payments and resolve your debt for much less than what you owe. We also provide you with the tools, expertise and support you need to successfully complete the program and fully resolve of debt.
How long does it take to complete the program?
The length of time to complete the program varies with each individual. That’s because each person’s situation is unique. We understand this and that’s why we will look at your individual circumstances, and take every detail into consideration when customizing a program to fit your budget.
How does debt negotiation differ from debt consolidation?
The names sound similar, but there is a world of difference. Debt negotiation may actually decrease your debt balance and requires no collateral. In addition, your results may vary based on our negotiations and agreements with different creditors. Debt negotiation generally takes time to complete and no outcome is guaranteed, although it doesn’t have the same risks as debt consolidation. Debt consolidation programs combine all your outstanding debt into one lump sum, and sometimes secure your total debt amount with an asset of great value such as your home. Debt consolidation only buys you more time, drawing out the payback process and puts you at risk of losing the asset you used as collateral.
What kind of team do I work with to resolve my debt?
We build relationships with our clients based on trust and support. We know the difficulties and stress associated with financial problems. Our dedicated team of knowledgeable debt-resolution specialists have experience dealing with personal debt and will provide you with facts that will help you make informed decisions.
Do I have to combine all my debts, or can I pick certain debts?
The decision of negotiating some or all of your debts is totally up to you. Our debt-resolution counselors will help you decide what strategies are best for you.
What’s so bad about filing bankruptcy?
Bankruptcy may seem quick and simple, however many people file for bankruptcy each year failing to realize they may be forced to deal with related consequences that could plague them the rest of their lives. Bankruptcy does not go away after 7-10 years, as some professionals may claim. The reality is many credit applications ask if you have ever filed bankruptcy, and to answer falsely may be considered a federal offense. Also, costly court and lawyer fees accompany the process of filing for bankruptcy. And with changes in bankruptcy laws, many consumers can no longer qualify to eliminate their debt under Chapter 7. Instead, many consumers must now file Chapter 13, which requires you to pay back a portion of your debt under the supervision of the court, which could take years. Generally speaking, bankruptcy is considered as a last resort to solving financial problems; however, you should consult an attorney regarding such matters.
How does the IRS treat debt that is forgiven?
We are not lawyers or tax advisors, generally however, financial institutions are required to provide a Form 1099-C when a forgiven debt amount exceeds $600. If you receive a Form 1099-C showing income in the form of canceled debt, this does not necessarily mean that you owe taxes on the forgiven portion of the debt. In most cases, clients can legally and ethically exclude forgiven debt from their income through the “insolvency exclusion” provided by the IRS code. This exclusion means that your liabilities exceed the fair market value of your assets, or in other words, you “owe” more than you “own.” We recommend that you consult a tax advisor regarding your particular circumstance if you receive a 1099-C. If appropriate, they can also assist you in filing Form 982 which excludes you from taxes on the forgiven debt.
Does AmericanDebt Counsel make monthly payments to my creditors for me?
No, you are responsible for all payments to creditors, including payments based on offers we negotiate with your creditors. AmericanDebt Counsel helps you add savings for your special service account on a monthly basis. You are responsible for payments to creditors and for saving funds to resolve your debt. If you fail to pay your creditors as agreed, your credit may suffer as a result.
Is it wrong for me to avoid calls from creditors?
It is your right to accept or not accept unwanted calls. We leave the decision up to you.
How does debt negotiation affect my credit?
That depends on what your credit looks like when you enrolled in our debt negotiation program. But in general, if you do not make payments and do not pay your creditors according to the terms of your credit card agreement, your credit will likely suffer.
What happens if I am unable to save funds?
Since this is a debt negotiation program, if you are unable to accumulate funds to pay your creditors, then we will not be able to resolve your accounts. If something happens occasionally and you are unable to make a full or partial savings payment, your debt-resolution specialist may be able to offer you some options for short-term relief.
Does AmericanDebt Counsel have control of my savings?
No, AmericanDebt Counsel does not have any control over your savings and never acts as an intermediary when it comes to your funds. The only money AmericanDebt Counsel ever receives from you is our service fees.
Can AmericanDebt Counsel stop collection efforts including lawsuits brought by creditors?
No, but we do have strategies to help you manage the collection efforts. We can also direct you to an attorney to answer any suits that may be filed.
Do late fees and interest charges stop while I am in the program?
No, the interest and fees continue to accumulate, but AmericanDebt Counsel will negotiate with your original balance in mind.
Can I be sued by my creditors?
Yes, if you fail to make payment to your creditors, they may take legal action against you.
Does AmericanDebt Counsel contact my creditors?
At the appropriate time, AmericanDebt Counsel will contact the appropriate creditor to begin negotiations.
What does AmericanDebt Counsel charge?
We charge service fees as described in our service agreement. However, we receive no payments or fees until we successfully settle a debt for you. We also guarantee that our discounted debt settlements will save you at least the amount of our fees, or we will pay you the difference.