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California Debt Relief FAQ’s

Will late fees and interest still accrue on my accounts?

Until the account is paid off, most creditors will continue charging interest for 3-6 months. But those payments and interest will be reflected in your personalized program, which is integrated into the Settlement Program as well. However, since Optimal Debt Solutions negotiates to bring your debt down to a fraction, our help will let you gain significant savings that are way over the cost of your interest and late fees.

What if my creditors won’t settle?

It is rare for creditors to deny the settlement. This is because if they choose not to settle, you’re more likely to file for bankruptcy which will leave them with nothing at all. With a settlement, however, they can at least get a fraction of their money back. On the off chance that your creditor will refuse the settlement, payment arrangements and counteroffers that are beneficial for you can still be achieved.

Does Debt Settlement have a negative impact on my credit?

Unfortunately, YES. Since most of your accounts in negotiation will “charge off,” your credit score will be negatively affected. Once you complete the settlement, your creditor will then notify the credit bureaus about it, and your account will reflect a zero balance by that time. You can then begin to properly manage your finances and rebuild a positive credit score.

Will I continue to get calls and collection letters from my creditors?

Yes, you will. Your creditor will mostly still call you, but this shouldn’t happen as much as before once they realize that you’re already working with Optimal Debt Solutions. The important thing to remember is to review our program kit for new clients and learn how to properly handle creditor calls in order to minimize creditor harassments. Also, it is advisable that you keep in touch with your account manager and give them updates on your creditors’ collection attempts.

Will this program stop legal action against me?

NO. Your creditors have all the rights to use legal measures in collecting your payments, and there will be others who might file a suit. Although there are only a very small number of debtors who are involved in a lawsuit, collection agencies and third-party creditors tend to threaten debtors with lawsuits to encourage payments. Take note, though, that this tactic is illegal if they don’t have the intent to sue you.

As much as we cannot guarantee that no legal action will be taken against you, we are also confident that our expertise in negotiating with creditors can reduce the chances of this happening. And even if there will be a case against you, we can still settle your account before, during, or after the lawsuit.

Remember that as much as the threat of legal action can be scary, the experts can handle it. Also, accounts can always be settled despite the legal action going on. In fact, lawsuits can sometimes lead to giving our negotiators some leverage to get your creditor to settle.

Note: When a lawsuit is filed against you, it is highly recommended to get legal counsel. Optimal Debt Solutions cannot provide that, but we will still work on your debt settlement while the legal action is pending.

Who is Qualified?

Only people with a real financial crisis are eligible for the debt settlement programs. This means that if you’re late on your payments, you have little to no chance of fully paying your debt in the future, and you’re facing possible bankruptcy; you can definitely make use of debt settlement.

How do I apply?

You only have to complete the application form online. After you submit your form, a debt consultant will review your information and call you for a situational assessment. Once the debt consultant has gathered all information about your credit situation and financial hardship, they will then determine if you qualify for our program or not.

What will I pay for your service?

Our service fee is already included in your monthly payment, an amount calculated based on the total amount of the debt enrolled. Don’t worry because we will fully disclose all the required fees and ask you to sign an agreement before you fully commit to our debt management program.

When I enroll in the program, what will happen to my accounts, can I still use them?

All canceled debts exceeding $600 are required to be reported by the original creditors to the IRS, and you are required to report it as income on your yearly tax return. However, you can write off your “income” from canceled debts that equate to the amount by which you were still insolvent at that time. This means that you’re not required to pay taxes for your forgiven debts unless you’ve already reached a positive net worth.

Additionally, fees accumulated on the account and other non-principal fees can also be deducted from the amount to be reported if you do not qualify as insolvent.

Refer to: Publication 908, Form 982.

Can I still use my credit cards?

All the credit cards that are in the program will no longer be active, canceling all your credit privileges. Also, any card that is not enrolled in the program should not be used either. Since debt settlement is a program that aims to relieve you from debts, stopping the use of any other credit card is a reasonable action.

Call Optimal Debt Solutions today at (213) 463-7313 for your Free Evaluation!