Choosing Debts for the Settlement Program

Q: What types of debts can be included in debt settlement?

Trident Debt Solutions works best with credit card debts and other unsecured debts that are greater than $1000. But other debts may be included. After review of the bill, we will advise you if it can be included.

Q: What is the difference between secured and unsecured debts?

An unsecured debt is one that has no collateral associated with it. Examples of unsecured debts are credit cards, lines of credit, signature loans, bounced checks, deficiency balances on repossessed vehicles, and medical bills. Secured debts have collateral. Examples of secured debts include mortgages, home equity lines of credit and car loans. If you have a secured debt like a mortgage or a car loan and then you surrender the home (foreclosure) or the car (repossession) the debt is now unsecured and we can help.

Q: Are there debts that cannot be included in the debt settlement program?

Yes. Our program cannot cure every financial problem. Nor is it the right step for every individual. We typically cannot negotiate tax debts, secured debts, alimony, child support, student loans, court restitution orders and criminal fines. We also do not settle debts of under $1000. We prefer to see national debts as opposed to a lot of local debts, like credit unions and local finance companies. But we need to review your situation in order to best assess your options.

Q: What about debts that have co-signers?

If someone else has co-signed a loan with you, the co-signer may become legally responsible for paying your debt if you do not pay it in full. This means that these types of loans are not good ones for our program.

Q: Can I only include those debts that are causing me problems?

No. Generally, we want to have you include all of your unsecured debts. Creditors have access to your credit report and when they see that you are still paying on some cards, it can impact the quality of our settlement because they will want to know how come you can pay some creditors, but not them. We allow you to leave out one or two cards if you feel it is necessary, but we do not recommend it.

Q: Do I have to be behind on my bills to do this?

No. Whether you are behind or current on your monthly debt payments, we can help you.

The debt settlement process is a complicated one, which is why it is usually in your better interest to hire a professional to steer you through it. Once you’ve done your homework and chosen a credible and reputable debt settlement company or lawyer, what should you expect from the process?

Debt Settlement Debt Reduction Eliminate Debt

Before any of the settlement negotiations begin, the firm will perform a complete analysis of your debts. Not all debts can be included in debt negotiation. Secured debts, which are debts that are backed by collateral to reduce the risk of the loan for the lender, as well as student loans, tax debts, and a few others, typically cannot be negotiated. Debt negotiation works best with unsecured debts, meaning there is no collateral involved. Examples of unsecured debt include credit cards, lines of credit, and medical bills.

After this is completed, you have two options to begin the settlement process. You can either put a lump sum of money into a trust account to begin negotiations with creditors, or, if this is not a possibility, you can make large monthly payments – at least 4% of your total debt – into a trust account. At this point, you stop making payments directly to creditors, and only into the trust account. Once there is sufficient money in your account to settle a debt, the firm or company begins negotiations with your creditors, one at a time until they are all settled.

What is Debt Settlement?

The terms “ debt settlement “, “ debt negotiation ” and “ debt arbitration ” all refer to the same thing: that you reach an agreement with a creditor to accept less than full payment on a debt to pay it off in full. Typically, a creditor will only accept a lump sum payment as a settlement. The discount they give you is in exchange for a lump sum of money as opposed to collecting the debt from you over time. You are then released from further obligation on that debt. The primary feature of debt settlement is that you eliminate debt at a discount.

Debt settlement is not the same thing as “debt consolidation.” Debt consolidation occurs when you lump two or more of your debts together (consolidate them) and make one payment on the debt instead of multiple payments. Bank consolidation loans are rare without excellent credit or some collateral such as your home. More common, is what is referred to as “consumer credit counseling,” where you make one payment to the credit counseling company, and they divide it up among your creditors in some way. With debt consolidation, you pay full value on the debt, plus interest (which may be reduced).

Steve Craig is a Colorado Debt Settlement Attorney
who in his capacity as a lawyer, has counseled thousands of individuals regarding their debt load.

His law firm has successfully filed over 2000 bankruptcies and has helped hundreds more with other alternatives.  He is familiar with all aspects of the debt collection process, and therefore, we give you a straight and honest answer on the alternatives available to you.