FREQUENTLY ASKED QUESTIONS REGARDING OUR DEBT ELIMINATION PROGRAM

What Can I Expect From Your Company?
We Work For YOU! We do not work for the creditors. This allows us to negotiate your debt, to ensure your interests are served, not those of your creditor's.

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How Does Your Debt Elimination Plan Work?
We custom tailor a budget plan that works especially for you with low monthly payments. You have the discretion to place these funds in an escrow account or in your own personal savings account. While you are putting money in this account (either monthly or in a lump sum), we start working with your creditor(s). The more money that you set aside in this account, the more aggressive we can be with negotiations. At the appropriate time, we begin a dialogue with your creditor(s) in an attempt to negotiate a settlement with each of them. Meanwhile, you continue to save your money while we are in discussions with your creditor(s). The timing of each creditor contact and the start of negotiations is critical. Be sure to be in contact with your Client Relations Manager to discuss your strategy.

Once we receive a reasonable offer that matches what you have available in your savings / escrow account, we will bring that offer to you. When you consent to the terms of the negotiated amount, we will obtain the creditor's settlement offer in writing. At this time, you will make a final settlement payment(s) to the creditor directly and this debt will be eliminated forever. We will continue this process with each of your creditor(s) until you are debt free!

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What Amount of Money Are You Typically Able to Settle For?
Settlements can vary greatly. We have settled accounts for over 80% less than the balance owed. We have also received offers to settle accounts for only 50% less than the balance owed. In most circumstances, we base our plan on an average settlement amount of 40% of the balances owed at the time you begin the program.

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How Much Money Will I Need To Participate in Your Program?
This depends on the total amount of unsecured debt you have. To find out what your monthly payments would be (or what lump sum you would need), please consult with one of our Debt Analyst toll free at (866) 637-2285. Remember, our consultation on your unsecured debt is completed at no cost and no obligation to you.

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Where Will I Come Up With Money For This Program?
There are three possibilities: 1) You can save money by putting away a portion of your paycheck each week or every month; 2) You can borrow money from friends, family or your retirement or savings accounts or by way of a mortgage; and/or 3) You can sell some property you own to raise money.

For most people, Option 1 is the most practical. Under that scenario, you save your money by placing it in your savings account that is set aside for your creditors. Instead of your money going to your creditors each month, you make a monthly deposit into this account based on an agreed-upon schedule. When a settlement is reached, you will use this fund to pay for the settlements.

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How Much Does it Cost?
Our fee is 15% of the total debt. The fee is broken down into 15% of each individual debt, paid out of the money you save by using our Debt Elimination Program.

Example #1 - Suppose you owe $3,000.00 on an account and we negotiate a 40% settlement with the creditor. You would pay $1,200.00 to the creditor from your settlement account and you would save $1,800.00 on the total debt ($3,000.00 - $1,200.00 = $1,800.00 Savings). Our fee would be 15% of the $3,000.00 or $450.00. It's that simple. Therefore, as you can see, our fee comes out of your savings!

Example #2 - If, over the course of your program, we settled $20,000.00 of debt for $8,000.00, you would have saved $12,000.00. Our fee would be $3,000.00 (or approximately $1,000.00 per year over the 36 month plan). Therefore, at the end of the program, you will have paid $11,000.00 out of $20,000.00, including our fee! You will have saved $9,000.00 (not including interest you would have paid many times over by making minimum payments forever). And, you will likely be out of debt in 3 years or less!

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What Types of Debts Do You Handle?
We deal with all forms of unsecured debt, such as credit cards, department store cards, medical bills, old utility bills, personal loans, business debts, etc. We do not handle current car notes, current mortgage payments, student loans or tax debt. We do not negotiate with creditors on bills that are for less than $500 and you must have at least $10,000 in total debt to qualify for our program.

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Will My Creditors Continue to Call Me?
The original creditor has a right to call you in an attempt to collect on your debt. You may request in writing that they stop calling and in most cases they will. However, there is a legal difference between creditors and collection agencies. For collection agencies, the law is on your side. Pursuant to the Federal Fair Debt Collection Practices Act, once you request, in writing, that they stop calling, they are NOT ALLOWED to call you anymore.

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Will My Creditors Accept a Settlement?
In most cases - Yes! We have proven success with creditors nationally. Although no firm can guarantee that every creditor will accept an offer to satisfy your outstanding debt, even if an account is not settled, you will still be better off. For example, if you have five debts of $5,000.00 each for a total of $25,000.00, your payments under our program would be approximately $382.00 per month. If we settled with four (4) of your creditors for an average of 40%, you would have eliminated $20,000.00 out of $25,000.00 of debt and saved approximately $12,000.00 (less our fee). Although you would still owe approximately $5,000.00, if you continue to pay $382.00 per month to this creditor, you will be able to pay off this balance in approximately 14 months! You will then be debt free in a fraction of the amount of time it would have taken making minimum monthly payments and at a substantial savings to you!

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Will Repair America's Credit Credit Solutions Stop Late Fees and Interest From Accruing on My Accounts?
Some creditors will stop the interest and late fees once an account is placed with a collection agency. Even though we can't guarantee that every creditor will do this, because we negotiate the debt down to a fraction of what you owe, your savings are far greater than any interest or late fees that could accrue! Often times any interest or fees associated with your debt that accrues after you enter our program we can negotiate down to $0.

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How will this Affect My Credit Rating?
Due to your outstanding debt, your credit is probably already compromised. This is because even if you have a perfect payment record your debt-to-income ratio is probably too high. This is the very first thing a creditor will look at; “Can your income support more debt?” By the time you are done with our program, you should be in a better “buying power” position because your debt-to-income ratio has been substantially lowered. Your credit report will also show the accounts are paid and/or have a zero balance.

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Why Can't I Just Do this Myself?
You Can! You can also cut your own hair or rebuild your transmission. However, because we know many of the creditors' tendencies, we therefore know what a good settlement offer is and when to settle or when to wait for a better offer. Also, creditors are usually more willing to negotiate with a Negotiation firm than with the consumer directly. In addition, our firm is made up of educated professionals with experience in negotiating debt and working with creditors. And finally, we know what rights you have under various laws. Also, keep in mind, we have experience with thousands of clients and Millions of Dollars of Negotiated debt.

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Isn't this the Same as a Nonprofit Consumer Credit Counseling Service (CCCS)?
In a word - NO. Consumer Credit Counseling Services and other nonprofit groups normally don't work on reducing the principal balance of what you owe. They typically can reduce the interest rate you are being charged; however, you still end up paying the full amount you borrowed plus interest!

Even though they appear to be “volunteering” to help you, they effectively work FOR the credit card companies. Creditors kick back a percentage of each of your monthly payments (known as “fair share”) to the CCCS. Yes, simply put, “credit counseling companies are paid by creditors to be their debt collectors.” (Source: Ray Martin, financial advisor, CBSNews.com, June 26, 2002)

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Do You Have a Guarantee?
As with most professionals, (Doctors, Lawyers, Accountants…) there cannot be a guarantee on the outcome. However, our track record speaks for itself. Feel free to contact your local Better Business Bureau. Also, feel free to check out the www.bbb.com, Dallas, TX. No complaints filed with either entity. We are a National Company that works with Thousands of clients & Millions of Dollars, and having no complaints speaks for itself.

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What Are My Other Alternatives?
1. You Could File for Bankruptcy.

Problem: Bankruptcy is a last resort. If you have the ability to pay even a portion of your debts, you have the power to avoid the stigma of bankruptcy. Further, filing bankruptcy makes your situation a public matter as your name and address will be made public record, a judge will be involved and you will have a hearing in a public forum. Furthermore, should you ever get into trouble again; you will lose the right to file bankruptcy for 6 years after a Chapter 7. It can also take up to 10 years to have it removed from your credit record!

2. You Could Borrow Money from a Bank to Pay Off Your Debt (Home Equity Loan or 2nd Mortgage).

Problem: In addition to the significant closing costs you'll pay, you'll now run a much higher risk of losing your home or property if you get into financial trouble again and can't make the payments. That's because it is much easier for a lender holding a lien on your property to take it than it is for a credit card company who does not have a lien on your property. This is the difference between secured and unsecured debt. “It is always a bad idea to refinance unsecured debt into secured debt' ... ‘even if this allows you to lower the interest rate you are paying.'” (Source: “Surviving Deb t... A Guide for Consumers,” The National Consumer Law Center, pp. 22 & 54, © 1999).

3. You Could Do Nothing or Continue to Make Minimum Monthly Payments.

Problem: With only a $10,000.00 credit card balance, and an industry average of 18% APR, it could take you over 40 years to pay your debt off if you continue to make the minimum monthly payment. You will pay significantly more in interest alone than the original amount of the debt! This money could be going towards your retirement fund, children's college education or a vacation! And, if you are behind, you may continue to endure creditor harassment for decades! Source: www.cnnmoney.com

4. You Could Turn Your Money Over to a “Not-For-Profit” Consumer Credit Counseling Service.

Problem: 1) Being “nonprofit” does not mean they work for free; 2) As outlined above, they effectively work for the credit card companies; 3) They typically lower the interest rates only, but you will still have to repay the FULL BALANCE plus interest; 4) You must entrust your hard-earned money to them and risk nonpayment and/or late payments by them which can cause significant late fees to be added to the amount you owe; and 5) Their programs can take up to 7 years or more to complete! Source: “Conniving Credit Counselors”, CBSNews.com, March 7, 2003

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Will the Creditors Sue Me? Will they Garnish My Wages?
Creditors do have the legal right to pursue a debtor in a court of law to collect the debt. In some states, garnishment is permitted and in some states it is prohibited. Federal law also limits the amount that can be taken from your take-home pay. However, usually this is a last resort after much effort to collect without response or satisfaction. Taking a client to court is a costly and time consuming activity which most creditors would prefer to avoid if given an alternative. It may also cause a bankruptcy and the creditor may end up with nothing. One reason creditors take action is lack of communication and/or rudeness over the phone.

Once our negotiators contact your creditors, they will be in constant communication with the creditors, letting them know what your situation is and answering their questions. We will do everything we can to reach a settlement prior to a creditor initiating legal proceedings. If a creditor does take legal action, we have the experience to know what steps to take to slow down or stop the proceedings.

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Can I Keep Some of My Credit Cards?
You may keep one card open for emergency purposes. Choose a card that has either a very low balance or no balance at all. Otherwise, you have to include all unsecured debt over $500 in our program. We cannot ask one creditor to settle on its account, if some other creditors are continuing to get paid monthly on their accounts. The story we tell them must be consistent for all. That is why the one card must only be used for emergencies and must have a small balance. All lines of credit on the cards that we are negotiating are closed. You cannot apply for further credit or use credit while in the program. When you have completed the program we want you to be debt free; not stuck with remaining debt which could cause you future problems.

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Is This Legal?
Absolutely. This is completely legal; it's simply a negotiated agreement between two people. For many of our clients, it is the only effective way of ever getting them out of debt. Without the use of debt negotiations, bankruptcy would be the only option left for many of our clients. However, through our negotiation efforts, the creditors do recover a portion of the amount owed. So, this is a win-win situation for both client and creditor.

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Summary
We will do everything in our power to ensure that all questions you may have are answered to your satisfaction. If you have any further questions or are confused by any part of this program, please do not hesitate to contact us. We are here to help you every step along the way!

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