Debt Relief FAQs

WHAT IS DEBT NEGOTIATION, DEBT SETTLEMENT AND/OR DEBT RESTRUCTURING?
Debt Negotiation is when your creditor agrees to accept less than you owe to satisfy your debt. This process usually involves negotiations between the consumer and his or her creditors to resolve unsecured debt for less than the full balance. These negotiations are often conducted on behalf of the consumer by a professional debt negotiator.
WHERE DOES A DEBT NEGOTIATION COMPANY FIT INTO MY DEBT RESOLUTION GOALS?
Debt Negotiation can be an outstanding debt relief option for people who cannot afford Consumer Credit Counseling, but also want to avoid bankruptcy. A Debt Negotiation company will customize a savings plan that fits your financial situation and help you set-aside funds to pay off settlements. Due to a Debt Negotiation company’s lack of emotional involvement with your accounts, you can be sure that their negotiating position is objective and effective. When you hire a Debt Negotiation company to negotiate on your behalf, you normally deposit money into a savings account each month. Once enough money builds up in your savings account, the Debt Negotiation Company uses those funds to obtain a settlement with your creditors for less than the outstanding balance.
HOW MUCH MONEY CAN DEBT NEGOTIATION SAVE ME?
Each Debt Negotiation client is unique and your results will vary. Settlement savings may depend however is not limited to who your creditor is or what type of debt you have. Settling your debt for 50% of the entire balance owed is not uncommon and most Debt Negotiation companies negotiate for percentages somewhere between 30% and 70%. You should also be aware there are also circumstances where debts may settle lower than 30% and higher than 70% and in rare cases, may only accept the balance in full. Please be aware the percentages listed are not performance guarantees of any kind and results will vary. Example settlement percentages above do not include program fees.
HOW QUICKLY CAN I BE OUT OF DEBT?
The amount of time it takes to get out of debt greatly depends on your situation. A professional Debt Negotiation program usually takes about 36 to 48 months or to resolve all enrolled debt accounts. Program terms may also be extended past 48 months based on the individual facts of each Client. The time it takes to complete a Debt Negotiation program also depends on how much debt you have, how much money you have to negotiate with, and the status of your debt accounts. Some settlements can take time because it is essential to let your accounts age. It is also important to let your negotiation funds accrue enough to offer a settlement to your creditors. If at any time while enrolled in the program you find yourself able to add additional funds towards settling your accounts, it will certainly expedite the process and the program term should be reduced. Please be aware no debt relief firm can guarantee you will be debt free within any specific time frame and all program terms are estimates only.
WHY WOULD MY CREDITORS AGREE TO ACCEPT LESS THAN THE AMOUNT I OWE THEM?
Your creditors prefer to collect the full amount you owe; however, they know that if you file bankruptcy, they may get nothing at all. Because of the possibility of taking a total loss, creditors are usually open to debt restructuring, especially once they recognize the financial hardships you are facing. In other words, your creditors would rather accept a lump sum payment of less than the full balance owed than risk getting nothing at all.
HOW DOES DEBT NEGOTIATION DIFFER FROM CREDIT COUNSELING?
Consumer Credit Counseling Agencies (CCC) are organizations that provide counseling services to help you budget and organize your finances so you can pay back your debt. CCCs work to lower your interest rate so you can pay back your creditors. While some CCCs may do a good job of orchestrating a repayment plan, more commonly known as a Debt Management Plan (DMP), many of them often are funded by the very creditors you are trying to settle with. So, you may end up with a repayment plan that is in your creditor’s best interest and not your own.

A Debt Negotiation company is funded entirely through the fees it collects from clients, so they work entirely for you, not your creditors. A Debt Negotiation company will negotiate settlements with your creditors rather than keep you in the minimum payment, debt cycle where you will likely get nowhere.

SHOULD I CONSIDER BANKRUPTCY?
Yes, it may be in your best interest to consider bankruptcy, although you should investigate all other avenues of debt relief before you do consider bankruptcy. Bankruptcy can eliminate all of your debt, but the consequences of bankruptcy may outweigh its benefits. Because each consumer’s individual circumstances are different, doing a thorough investigation of each debt relief option is highly recommended to ensure the proper debt relief program is being utilized. Also see the Bankruptcy section of our website to read more about types of Bankruptcy.
CAN I STILL FILE A BANKRUPTCY IF I TRY THE DEBT SETTLEMENT AND IT DOES NOT WORK?
Yes, but the money you will have spent on the credit card debt settlements prior to you filing the bankruptcy will be gone. Many consumers that explore filing for Bankruptcy chose to enter a Debt Negotiation program first in an attempt to avoid filing. For some people this is a smart choice, for others, it may not. All in all, you may certainly still file for Bankruptcy if for any reason Debt Negotiation does not work for you. Some examples of situations that may cause a consumer to cancel from a Debt Negotiation program and file for Bankruptcy include loss of wages, illness & change is a creditor account status.
WHAT ABOUT DEBT CONSOLIDATION?
Debt consolidation is when you combine all of your various debts into one large debt and you attempt to borrow your way out of debt. The most common debt consolidation loan is a home equity loan, since most consumers in a financial bind do not qualify for an unsecured loan. Home equity is the fair market value of your home minus what you still owe on your house. Consumers typically take out a home equity loan to help pay off other credit card bills, but this loan just moves the debt from unsecured accounts to a loan that is backed by their house to a secured debt. A debt consolidation loan secured with your home is very risky, because you could end up losing your home if you are unable to pay the loan back.

For instance, if you take out a home equity loan and cannot afford to repay your lender, you could face foreclosure and eventually lose your home. Many consumers who chose a debt consolidation loan end up charging new debt on their credit card accounts, which increases their overall debt burden and chances for encountering financial difficulties. Debt consolidation may be an appropriate debt relief solution for some, but it may be in your best interest to investigate other debt relief options first. You should be very cautious about changing unsecured debt into secured debt.

ARE THERE ANY ADVERSE THINGS I SHOULD KNOW ABOUT MY DEBT RELIEF OPTIONS?
Each Debt relief option that exists may have positive and negative aspects. For the most part, each positive and negative aspect is going to be reliant on each Consumers specific situation. For example, Bankruptcy may stay on your credit as a public record for 7-10 years and may impact you from obtaining employment, obtaining new loans or credit or prevent you from leasing a home or vehicle. On one hand, this may seem like a lot to digest. On the other hand, for the appropriate person, the benefits a Bankruptcy may provide will outweigh the adverse impacts and will be the right thing to do. Debt Negotiation will adversely impact your credit rating while you are attempting to resolve your debts. Creditor calls and creditors pursuing legal remedies to collect on the debt may be other things a consumer could experience while in a Debt Negotiation program. Credit Counseling may show up on your credit as being enrolled in a “Credit Counseling” program and in some cases will prevent you from obtaining a home refinance or new credit.

As you can see, each Debt Relief option will have pros & cons. Once a consumer is educated on each option, you can make an educated decision as to which option is best for you. Brownstone Law Group, PC. will give you the information you need to make this decision and help you each step of the way.

WHO QUALIFIES FOR A DEBT NEGOTIATION PROGRAM?
Not everyone qualifies for Debt Negotiation or debt restructuring. Generally, Debt Negotiation is an alternative to bankruptcy for people with overwhelming debt who have endured personal or financial hardships that prevent them from fully repaying their creditors. Typically, most Debt Negotiation companies require that you have at least ten-thousand dollars ($10,000) in unsecured debt (debt that has no collateral, like a home or automobile, attached to it) and are experiencing a legitimate hardship, such as unemployment, illness or other situation that has compromised your ability to repay your debts, or sometimes just barely make minimum payments. Upon enrollment, Brownstone Law Group, PC. would perform thorough intake verification with each consumer to ensure accuracy, affordability and a complete understanding of how the program works.
WHO DOESN'T QUALIFY FOR A DEBT NEGOTIATION PROGRAM?
While each Debt Negotiation company may have a different set of qualifications for their program, most companies require their clients to have at least ten-thousand dollars ($10,000) of unsecured debt, and have, or are experiencing a legitimate hardship. Typically, people who do not qualify for Debt Negotiation either do not have enough debt, the wrong type of debt, or have too much or too little income as compared to their expenses. If you do not qualify for debt restructuring, it may serve your best interest to investigate other debt relief options such as Consumer Credit Counseling or Bankruptcy.
WHAT TYPES OF DEBTS QUALIFY FOR A DEBT NEGOTIATION PROGRAM?
Typically, only ’unsecured’ debts qualify for a Debt Negotiation program. Unsecured debt is debt that is not ’secured’ by collateral, such as a home or automobile. Credit card debt is the most common type of unsecured debt. The amount of debt you owe may also play a significant factor in qualifying for debt restructuring. If you have ten-thousand dollars ($10,000) or more of unsecured debt (such as credit card debt), you are experiencing a financial hardship and you want to avoid bankruptcy, then you might qualify for debt restructuring.

Below are examples of unsecured debts that typically qualify for debt restructuring:

  • Unsecured Debt
  • Credit Cards
  • Medical Bills
  • Personal Loans
  • Department Store Credit Cards
  • Unsecured Bank Loans
  • Bank Overdraft & Associated Fees
  • Gasoline cards
  • Jewelry Store Loans
  • Furniture Store Loans
  • Repossessions (Deficiency Balance)
  • Business Debt (Restrictions Apply)
  • Computer Loans
  • Judgments (Must Be Uncollectible For At Least 12 Months)
  • Finance Companies
  • GE Money
  • Care Credit
  • Pay Day or Cash Call Loans

Acceptance of any particular debt is dependent upon the individual facts and circumstances and approval of a lawyer. Brownstone Law Group, PC. reserves the right to accept or reject any debts upon enrollment.

CAN'T I NEGOTIATE A SETTLEMENT ON MY OWN?
You can certainly attempt to negotiate a settlement on your own. But, if you do, make sure you do it right, as we receive many horror stories from consumers who were taken advantage of by their creditors. Our highly trained negotiators have years of experience negotiating and securing excellent settlements with creditors and debt collectors. Furthermore, we believe that Brownstone Law Group, PC. stands out in creditor’s eyes as an honest and reputable law firm that doesn’t enroll unqualified clients (e.g. those consumers who have the ability to fully repay their unsecured debt) and also creditors know that Brownstone Law Group, PC. processes their settlements efficiently reducing time and collection cost for the creditor.

To successfully negotiate and settle debt on your own (among other important things) you need to understand the collections process, differences between various creditors and the right time to begin negotiations and agree to settlements. You must also understand how a settlement agreement is structured to make sure the agreement clearly spells out the negotiated settlement.

Debt Negotiation is a complicated process. If you’re not sure you have the knowledge, organization and self-discipline, you may want to leave it to professionals. Even if you have the time to learn how to save up, negotiate and settle your debts, you may still have some emotional attachment to the debt which could interfere with your objectivity. Professional debt negotiators maintain an objective position with the debt they settle, which means they are less likely to be intimidated by debt collectors.

WHAT SETS BROWNSTONE LAW GROUP, PC. APART FROM OTHER DEBT RELIEF, NEGOTIATION, OR SETTLEMENT COMPANIES?
Our clients feel comfortable with our program because we make sure that our Debt Negotiation program is designed to fit their specific financial situation. Also, our excellent rating with the BBB reflects the professionalism and dedication we have demonstrated to our consumers over the past years. Brownstone Law Group, PC. is not a huge corporate debt relief sales floor with call centers attempting to generate as many clients as we possibly can. We are a consumer centric, customer service focused firm that maintains the necessary balance of staff and technology to ensure our clients receive the best possible results. We also believe in full disclosure so you can rest assured that upon discussing your Debt Relief options with a representative of our firm, you will be aware of the pros & cons of each program available to you so you can make an informed, educated decision that is best for you. Brownstone Law Group’s values consist of honesty, integrity, service and performance. For future, prospective clients, we are happy to share settlement letters from past clients that will validate the fact that we do in fact provide results. All you need to do is ask.
DOES BROWNSTONE LAW GROUP, PC. WORK FOR ME OR MY CREDITORS?
Unlike most nonprofit debt relief organizations or Consumer Credit Counseling Agencies, Brownstone Law Group, PC. does not receive commissions or payments from your creditors. Our business is funded through the fees we charge you, so our loyalty remains solely with you. If you’re considering using a nonprofit debt relief organization, you may want to know that many such nonprofits receive some of their funding directly from their clients’ creditors. In comparison, we do not accept any monies from creditors. We work for you, and only for you.
WHAT IS THE FAIR DEBT COLLECTIONS PRACTICES ACT?
The Fair Debt Collection Practices Act, often referred to as the ’FDCPA’, was passed by Congress in response to abusive conduct by collection agencies, and concern that the abuses were causing an increase in the filings of bankruptcies. The purpose of the Act is to provide guidelines for collection agencies which are seeking to collect legitimate debts, while providing protections and remedies for debtors.
WHAT TYPES OF DEBTS ARE COVERED?
The FDCPA applies to personal, family, and household debts, including debts associated with the purchase of a car, for medical care, for retail financing, for first and second mortgages, and for money owed on credit card accounts. Please note that most states have similar laws, which typically proscribe the same types of misconduct by debt collectors and which may cover a broader range of debts than the federal law.
WHAT DEBT COLLECTORS ARE COVERED BY THE ACT?
The act regulates the conduct of debt collectors: any person who regularly collects debts owed to others. This definition includes lawyers who perform debt collection services on a regular basis. Even where money is legitimately owed, a debt collector’s conduct is restricted by this law.

In-house collection agents are not ordinarily covered by the Act. For example, if you have a store credit card, and the store’s own collection department contacts you, the FDCPA does not apply. However if the same store uses an outside collection agency to contact you in relation to that same debt, the outside agency’s conduct is restricted by the FDCPA. Similarly, if the same store uses an in-house collection agent, but suggests to you that the collection is being performed by a third party, the FDCPA may apply to them as a result of that representation.

Please note that there may be other laws in your state which restrict the conduct of in-house collection agents.

WHAT RESTRICTIONS ARE IMPOSED ON COLLECTION AGENCIES BY THE FDCPA?
The FDCPA restricts debt collectors from engaging in conduct including the following:

  • Contacting a third party who does not owe the debt, such as a relative, neighbor, or your employer. Co-signers to the debt, however, may be contacted by the debt collector;
  • Threatening to refer your account to an attorney, harm your credit rating, repossession or garnishment, without actual intention of action on the threat. Please note that a debt collector may warn you of an actual impending intention to refer your case to an attorney or to report your debt to a credit agency. What they cannot do is use a false threat to try to intimidate you into paying;
  • Making repeated telephone calls or telephone calls at unreasonable times. The act defines unreasonable times as contact before 8:00 AM or after 9:00 PM, unless you have given the debt collector permission to contact you during those hours;
  • Placing telephone calls to an inconvenient place. For example, contacting you at work in violation of a policy by your employer that is known to the debt collector or following a request by you that they not contact you at work;
  • When placing a telephone call to you at work, informing your employer of the purpose of the call, unless first asked by the employer;
  • Using obscenity, racial slurs or insults;
  • Sending letters which appear to have come from a court;
  • Seeking collection fees or interest charges not permitted by your contract or by state law;
  • Requesting post-dated checks with the intention to prosecute if they bounce;
  • Suing in courts far removed from your place of residence;
  • Making certain false representations in association with efforts to collect the debt, including the false claim that the person contacting you in relation to the debt is an attorney, falsely claiming to have started a lawsuit, using a false name, or using stationery that is designed to look like an official court or government communication;
  • Using false claims to collect information about the debtor, such as pretending to be conducting a survey;
  • Threatening you with arrest if you do not pay the debt.
WHAT REMEDIES ARE AVAILABLE IF THE DEBT COLLECTOR VIOLATES THE LAW?
Under the Fair Debt Collection Practices Act, you have the right to sue a debt collector in state or federal court within one year from the date of the violation. If you win, you may recover damages in the amount of any losses you suffered as a result of the violation, plus an additional amount of up to $1,000.00. You may also be able to recover court costs and attorney fees. If the same debt collector has engaged in unlawful conduct with a number of consumers, it may be possible to find a lawyer who will file a class action lawsuit.
DOES THE FAIR DEBT COLLECTIONS PRACTICES ACT APPLY TO MAJOR CREDIT CARD BANKS?
No, it only applies to the professional debt collection companies or collections attorneys the major credit card banks hire. The original creditors are regulated by state law but major credit card companies follow policies close to those of the FDCPA and will comply with your request to stop phoning you at home or work. If feel the original credit card company and not the attorney or collections company is harassing you then you need to research your state laws and file a complaint. Typically, the Attorney General in your state is the proper authority to contact. You will find a link to all of the Attorney Generals Offices by clicking on the link in this sentence.

Please be advised, this FAQ page is intended for informational purposes only. Nothing on the site is to be considered as either creating an attorney-client relationship between users and Brownstone Law Group, P.C. or as rendering legal advice on any specific matter. Brownstone Law Group, PC. also makes no prediction as to the outcome of any case and prior results do not guarantee each consumer will see a similar outcome.
Users are responsible for obtaining such advice from their own legal counsel. No client or other user should act or refrain from acting on the basis of any information contained on the Brownstone Law Group, P.C. website without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue.

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The information contained on this website is not to be construed as legal advice. It is not intended to solicit or form an attorney-client relationship. Debt settlement, debt negotiation or debt resolution programs (the “Program”) are not an offer or promise to lend money and neither they nor Brownstone Law Group, PC. (“BLG”) assume or pay any consumer debt or make monthly payments. BLG is not affiliated with any lending institution, bank, collection agency or collection law firm. Individual Program results may vary and are based on but not limited to the ability of clients to save funds and successfully complete their Program terms and conditions, the amount and type of debts and creditors, history of accounts and financial standing of clients. Past performances of Clients do not guarantee future results for others and BLG does not guarantee that debts enrolled in the Program will be settled at a specific percentage or amount, or that you will be debt free within a specific time period. Not all Clients complete our Program for a variety of reasons including but not limited to an inability to save sufficient funds. The Program may have an adverse impact on Clients credit. Our services may not be available in all states please check with BLG for state eligibility. Please contact a tax professional to discuss potential tax consequences of settling debt. This website and the content of this website has been reviewed and approved by Thomas A. Moore the managing partner of BLG who’s mailing address is PO Box 629, Orange CA 92856-6629. Copyright Brownstone Law Group, PC. All rights reserved. Unauthorized use of the BLG website includes but is not limited to content copying, duplicating or replicating is strictly prohibited. Furthermore, use of this website is subject to the Terms of use.

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