Q. Will I be totally debt free when I’m done?
Our program is focused on dealing with only unsecured debts (credit cards, medical bills, unsecured personal loans). We cannot help you with debt that is secured by collateral (such as mortgages or auto loans). After completing the program, however, the money that you are no longer paying towards your unsecured creditors can now be used to pay down secured debts, as well as to save for your financial future. Not all consumers complete our program, and sticking with your monthly savings plan is the most important factor in determining your success.

Q. Should I put all of my credit cards in the program?
If you have one card with a low balance that you can quickly pay down to zero, then you may hold onto it for emergencies. However the program will generally not work unless you enroll all of your high balance (greater than $500) credit card accounts. As you can imagine, it makes it difficult for us to negotiate with your creditors if they can see that you are negotiating on some accounts but not others.

Q. Who controls the bank account where I am saving funds for creditors?
You do. The bank account is set up in your name and the money in the account is your money. The reason why we recommend keeping it in a new account that is separate from your existing bank accounts, is that in our experience, this separation dramatically increases (by a factor of 2-3 times!) the probability that you will succeed in FDR's program. FDR's fees are deducted from this account after your debts are settled, according to the Agreement that you sign with us. But the accumulated savings in the account are owned by you.

Q. Will I receive phone calls from collectors?
There are federal and state laws designed to protect you from collection harassment. However, the fact is that most of our clients experience some collection calls. FDR's goal is to get your creditors to call us and not you when they want to ask for money, and we will work with you to minimize any calls that get through to you.

Q. Will I owe taxes on my forgiven debt?
The IRS considers a forgiven debt as taxable income, so at the end of the year, they will expect taxes to be paid on the settlement. The IRS, however, has a form (Form 982) available for certain hardship situations that may exempt you from this tax. Please contact a tax advisor to discuss this issue further.

Q. Do interest and late fees accrue on my accounts?
If you let your accounts go delinquent, your creditors will continue to add interest and late fees onto your balances. Typically, your balance will increase until a settlement is reached. Keep in mind that the interest is going to accrue regardless of whether you make minimum payments or not. FDR's goal is to negotiate substantial reductions to the balances on your accounts, even after the interest and late fees have accrued.

Q. Could I negotiate on my own?
Yes you can. You can also do your own taxes and repair your own car, but most people choose to seek help. Most people prefer to leave these tasks to experienced people who earn their livelihood as specialists in those lines of work. Our team of debt negotiation specialists has only one job - negotiating reductions on our clients' unsecured debts, each and every day of the week. Our knowledge and experience puts us in a strong position to stand up to your creditors and fight for the best settlement possible. Together, FDR's team of negotiation specialists are resolving approximately $40,000,000 of debt each month.

Q. Do you begin negotiating with my creditors right away?
Except when dealing with certain difficult creditors, we generally contact your creditors right away (typically within approximately 1-2 weeks of your joining our program) to let them know that we have authorization to communicate and negotiate on your behalf and to request that future collection calls come to us and not you. The actual negotiation activity is typically very limited until you have saved up enough in your settlement account to make reasonable offers to your creditors. Most (but not all) creditors do not want to spend time negotiating an account unless they know there are funds available. The first settlement typically happens in month 6 to 9 of a client's program (this varies greatly and depends on your monthly savings amount and the number of creditors you have enrolled in the program as well as the balance of each individual account). In some instances it may take more than 9 months before the first settlement is reached. That said, Fresh Start clients (who are not paying fees until a settlement is reached) should see settlements come faster than our historical averages.

Q. Will my debts be sent to a law firm? Will this result in a lawsuit?
Creditors do have the right to send debts to third party collection agencies and/or law firms in order to collect a debt. If this happens, we will continue to negotiate on your account and will treat the debt as a priority creditor. Based on our actual experience, it is a small percentage of cases on which lawsuits are actually filed. When this does happen, usually the purpose of the lawsuit is to force a settlement. We will continue to negotiate to settle the debt, although the settlement percentages are often higher than typical non-legal settlements. If a lawsuit is filed before you have saved up enough funds to negotiate a settlement, we may seek to resolve the account by putting it on a long term payment plan for 100% of the balance. Please note, we are not a law firm and cannot provide legal advice or legal representation.

Q. Do you guarantee that you settle all of my debts for a certain percentage?
No. Every case is a negotiation, and there is no guarantee how the negotiations will wind up. Furthermore, the success of our negotiations is highly dependent on your ability to save a specified amount each and every month you are in the program.

Q. Will entering your program repair my credit?
No. We are not a credit repair company, and our goal is not to repair your credit. Our goal is to negotiate settlements at less than face value on your unsecured debts.

Q. Do you have any tips and/or advice for choosing a debt settlement company?
We recommend you view the FTC’s comments on choosing a debt settlement company, click here to view.