1. Debt Settlement

What is Debt Settlement? Many individuals have problems paying their debts on time. Or maybe, you are already behind on payments or cannot afford to stay current due to a financial or medical hardship. Debt settlement is a method to reduce those debts. Our trained debt negotiation specialists will negotiate with your creditors on your behalf to reduce your debt balances by 40-60%. We can also help you to avoid filing a costly bankruptcy.

Is this the same as consumer credit counseling? No. Credit counseling has no effect on your principal balance. In credit counseling you repay the debt in full, at reduced interest rates. One problem with consumer credit counseling is that the payments are still rather high and it typically takes 5 years to pay off the debt. These companies also receive most of their revenues from your creditors - the very people to whom you owe money. In other words, they probably do not represent your best interests. After all, they are being largely supported by your creditors. While in credit counseling, you pay your debts through the counseling company. You will stay current on payments and probably not damage your FICO score. However, you will receive a negative mark on your credit report, a CC or Credit Counseling mark. This is viewed negatively by lenders and may damage your creditworthiness.

What about bankruptcy? Bankruptcy is an absolute last resort. It will have an extremely negative and lingering affect on your credit report for 7-10 years. It will also carry a horrible stigma and may affect you in other ways such as employment. You do not want to file for bankruptcy if it at all possible. If you are employed, are serious about resolving your debt, and have enough discretionary income to resolve your debt over time, you should contact us for a free initial consultation.

How about a loan? This may already be part of the problem and an additional loan can only compound matters. Could you even qualify? And if so, you may need to secure the loan with an collateral - a risky venture. If you default on a secured loan, you'll lost the collateral, which could be your home.

Who is your perfect client?
An ideal client:

• Has a debt problem he or she cannot resolve.
• Is having trouble staying current, is delinquent, or is close to being in litigation.
• Has a positive cash flow.
• May be considering bankruptcy, but would like to avoid it.
• Has a minimum of $10,000 in unsecured debt.
• Have some type of hardship (divorce, illness, job loss, etc.).

What is Unsecured Debt? Unsecured Debt is not collateralized by property and commonly includes: credit cards, medical bills, commercial debt, personal loans, and consumer debt.

What is Secured Debt? A Secured Debt is a loan where the creditor retains a security interest in an item of real or personal property such as a house. If you fall behind on this type of debt, the lender can repossess collateral in order to collect on their outstanding debt.

How do I qualify for your Debt Settlement Program? After you filled out an easy online application, our Debt Counselors will provide you with a free consultation, which includes a detailed and customized financial analysis to determine if you would benefit from the program. The last thing we want to do is put you in a program that will only provide temporary relief. Our goal is to eliminate your debt as quickly and as cheaply as possible. If you are in debt and have a legitimate hardship, chances are we can assist you. However, we do not accept everyone into our program.

Will all creditors settle? We look at each situation as being unique. We have established relationships with most creditors and know which ones are willing to settle and at what percentage. Our Debt Consultants will review the percentages we typically receive from your creditors and base their estimates on these. We will not accept into our program creditors that we cannot work.

What if I cannot afford to pay the settlement? You are in control of what gets settled. If you do not have the funds available for a settlement, then no settlement is made. We will keep your creditor at bay until you have accumulated the requisite funds. Sometimes an attractive settlement offer is reached earlier than anticipated. In these instances, we recommend you take advantage of the offer, if possible. You need to make an effort to eliminate your debt by following the plan we develop. We form a partnership to help you solve your financial situation. Without an effort on your party, you debt will not disappear and we cannot settle.

Do I have to include all of my debts in your program? You can select which debts you would like us to resolve. We recommend that you include all or most of your unsecured debt. It is important that you tell our consultants about all other unsecured debt you have. It may affect our ability to negotiate if you make payments to a creditor that is not included in our program, while not paying creditors in the program.

How does this affect my taxes? Debt settlements should be recorded on your tax filing. If a debt is canceled or forgiven, the debtor generally must include the canceled amount in gross income for tax purposes. It is considered forgiven debt and taxed at your normal rate. If you have three debts and each is settled in a different year, then you would only owe taxes in the year in which each individual settlement occurs. Example: You owe Creditor A $20,000 and we settle it for $8,000. You have saved $12,000. Your tax rate is 25%. You would owe $3,000 in taxes (25% of the $12,000). Even with the taxes, you are still saving $9,000 in this example. Depending on your financial situation, you may be able to claim insolvency and not owe these taxes. For more information contact your accountant.

How does this affect my credit? It is important to point out that we do not report to the credit bureaus. However, your creditors may report that you are participating in a debt program. Clients will likely experience an adverse affect on their credit. No form of debt reduction will have a positive effect on your credit. In debt settlement, you receive an 'open delinquency' on your credit report because regular payments are not made to your creditors. However, once we negotiate a settlement, you will pay the creditor directly yourself, and the late marks will cease. Your credit report will then read 'settled in full'. Our program will certainly improve your debt to income ratio by eliminating debt. This ratio is used by lenders to evaluate your creditworthiness. Since your debt is being resolved by way of settlement, future creditors will see you have made a concerted effort to resolve your debt instead of filing bankruptcy. Remember, our program is a bankruptcy alternative so credit is a secondary concern. Our goal is not to improve your credit, but to get you out of debt as quickly as possible.

Do you pay my creditors or do I pay them? We do NOT disburse funds to your creditors during the program. We are not a credit counseling program. The purpose of our debt management program is to settle your debts at a discount to the principal balance. While in our program, regular payments are not made to your creditors. We cannot negotiate meaningful settlements on current accounts. If you can afford to pay off your debts on your own, you should do so. Once you approve a negotiated settlement offer, you will then make settlement payments directly to your creditors from your settlement account. The settlement account is an account that you control at your bank.

How long will the program take? The length of time necessary for completion of the program varies from case to case and will depend largely on your budget. Depending on the monthly payment you decide upon, the debt can be eliminated as soon as you can come up with the necessary funds. It could be as soon as 120 days. A typical program, however, takes 12-36 months.

Can my creditors call me when I'm in the program? Yes, but most will not. The majority of first party creditors are cooperative and will update your records to indicate you are participating in a debt management plan. Our program includes representation by our in-house legal department. We send cease and desist letters to creditors. This compels third-party creditors or collection agencies to only communicate with us. However, they may still call for 30 to 60 days while the program is being set up as the amount of time it takes for their records to update varies by creditor. Usually, the calls will cease after the creditor receives notice from us. Your Debt Counselor will explain how various creditors are handled. Be aware that despite our efforts, there are unscrupulous collection agencies that will not abide by the law and will continue to call you. You can formally complain should this continue. You should also know that accounts are frequently sold. We may prevent one collection agency from contacting you. However, they may sell your account to another new agency and the process will have to be repeated.

Can my creditors sue? Creditors maintain the right to use legal means to collect a debt. Some are more litigious than others. However, most will only sue if there is a lack of communication or they feel a consumer who can afford to pay, is trying to 'beat the system.' Lawsuits are not common but do occur. You should be aware that a creditor can only sue you if it retains an attorney in your state. Furthermore, it takes time and costs money to file. Lastly, even if a creditor were to take legal action, they can only collect what you actually have. A garnishment takes time and hinges on your employment. If you lose your job, the garnishment will temporarily cease. It is not easy for a creditor to attach to equity in your home and it may be protected by your state's homestead act. In summary, it is more cost effective for a creditor to settle than to pursue legal action. We work with your creditors to find a solution that will satisfy everyone before legal action is taken. While we cannot guarantee that legal action will not be taken, we are confident that our experience can avoid it.

I own a home with equity. How can this be used to help with debt settlement? If you have available equity in your home we may be able to help you use this as a means to gather money for settlement more quickly. We have affiliations with several mortgage companies that are experienced in working with debt settlement companies. Ask your debt counselor for more information on this.

So what are your fees? Our fee is based on a percentage of your overall debt. We guarantee that our fee is among the lowest in the industry. If for any reason, you fail to complete the program, you shall be entitled to a reimbursement of all unearned fees. Our exact fee schedule can be explained to you by your personal debt counselor and is further outlined in writing for your benefit. Our program is very affordable and far less expensive than costly legal fees or attorneys which may charge hundreds of dollars per hour. We receive our fees through an electronic funds transfer from the bank account you use.

Will my information be kept private? We are committed to maintaining complete confidentiality and privacy. Feel free to read our comprehensive privacy policy found on this site.

2. Debt Consolidation Loans

What is Debt Consolidation? Debt Consolidation is a very popular strategy used by consumers to better manage their debt problems. It is use of a home equity loan where members move high-rate credit card balances to low rate home equity loans. By taking a credit card with an 18% interest rate and moving it to a home equity line with an 8 or 9% interest rate, a member could save thousands of dollars. The commercials on television make it sound like a debt consolidation loan will solve all my financial problems. Are these loans really the perfect way to solve my debt issues? For some people debt consolidation loans can work very well. For others they may come with some side effects.

How can I determine if a debt consolidation loan is right for me? Start by understanding what a debt consolidation loan is and how it fits into solving your personal debt situation.

Isn't a debt consolidation loan just a loan where you get money to pay off your bills? No. In almost all cases a debt consolidation loan is structured as a second mortgage on your primary residence. Sometimes people with excellent credit can get an unsecured personal loan for their debt consolidation needs. For people with good fair or poor credit, unsecured personal debt consolidation loans may be harder to get and the maximum loan available hovers around $5,000-$15,000 depending on your exact credit and employment situation. In somes cases these loans do the trick, but for many debtors an unsecured debt consolidation loan of $15,000 or less does not address enough of their bills.

What difference does that make? Most debtors attempting to obtain a debt consolidation loan face issues with unsecured debt, such as credit card bills. A second mortgage represents a secured debt. This becomes of critical importance if things go from bad to worse. With unsecured debt a chapter 7 bankruptcy can discharge the debt, completely relieving the individual of the obligation. In the case of secured debt, such as a second mortgage, even in a bankruptcy situation, the creditor has the right to seize the collateral if the loan cannot be repaid. When speaking about a second mortgage that would mean foreclosure on the property.

I intend to make all my payments, why is this an issue? You may have taken the credit cards with the intention of paying off the balance each month as well. Good intentions are fine, but unexpected things happen in life. One of the most critical issues to analyze before taking on a debt consolidation loan will be the borrower’s ability to weather a financial down turn. I recommend that anyone taking on a debt consolidation loan be very comfortable that should they have a health issue, loss of job or other unfortunate financial surprise that they would remain able to make the payment for some time on the new debt consolidation loan. To be even more clear, a debt consolidation loan means you "bet the house" that you can repay your credit card debt.

My monthly payment with a debt consolidation loan will be much more affordable, what is wrong with that? There is nothing wrong with lower payments as long as you understand the mathematical reasons why the payments will be lower. Take a hard look at your current debt including the payments and the interest rates. How long would it take to pay off the debt in full? Then look at the terms of the debt consolidation loan. In some cases lower payments result from a significantly reduced interest rate, in other cases the reduced payment can come entirely from extending the payoff time to as long as 30 years.

Aren't the rates of these debt consolidation loans always low? Absolutely not. In some cases, where the borrower has good credit and a fair amount of equity in the home, rates can indeed be close to rates expected for a first mortgage. In other cases, particularly those with individuals with poor credit or in case of 125% LTV debt consolidation loans, rates can soar to over 18%. Depending on your current debt, rates for these debt consolidation loans can be higher than the interest rate on the pre-existing debt.

What is 125% LTV loan all about? 125% LTV (Loan To Value) loans allow the individual to borrow monies beyond the value of their home. For example if a home is worth $100,000.00 and the mortgage debt on the house is also $100,000.00, a 125% LTV loan would allow the debtor to borrow an additional $25,000.00 with the result being the total debt secured by the house after the loan would be 125% of the value of the home. While this type of loan opens the door for some individuals who may otherwise have no access to money it comes with a price. The interest rates for these loans typically run much higher that other mortgage loans and origination fees to set the loan up can be as much as 10% of the loan balance.

Can anyone get a 125% loan if they need it? No. Only those with good to excellent credit will be eligible.

What if a debt consolidation loan would really cure all my problems? Are there any other dangers? Yes. The debtor must examine how the trouble began. One of the most common pitfalls and recipes for the worst of disasters happens when people take on a debt consolidation loan without rectifying the true cause of the debt. A typical situation would play out like this: Individuals get into debt trouble because they are living beyond their means and supporting their spending habits with credit cards. A debt consolidation loan seems to solve things by paying off the debts. Unfortunately, if the spending habits continue, the individuals find in another year or two they have run their credit cards up to the same levels or higher than they were before the debt consolidation loan. Only this time the equity in their house has all been used up by the debt consolidation loan. They are unable to pay either the new bills or the debt consolidation loan and bankruptcy and foreclosure becomes await them.

What is the best way to avoid this scenario? Find out why the debt has truly accumulated. In a case of irresponsible use of credit cards, after paying off the credit cards with a debt consolidation loan, cut the credit cards up. If you need to have credit cards for rental cars, business trips or on-line purchases consider secured credit cards or debit cards. Spending on secured credit cards cannot exceed a limit based on the value of an accompanying savings account. Use of debit cards require you have money in an account in order to use the card.

Is there a way to get a debt consolidation loan that does not require pledging your house as collateral or a way to get a debt consolidation loan if you do not own a house? No. You may be able to get an unsecured personal loan, but unsecured personal loans will always require good to excellent credit and come with interest rates even higher than debt consolidation loans. Some people may refer to an unsecured loan as a debt consolidation loan, but the typical advertising you see on television or in the newspaper for a debt consolidation loan refers to one secured by a second mortgage.

Is there any legal difference between a debt consolidation loan and a home equity loan? Not in most cases. A debt consolidation loan in legal structure generally does not differ in any way from what one might call a home equity loan or a second mortgage loan.

Are there any good points to a debt consolidation loan? Yes. When debt consolidation loans carry a low enough interest rate payments can be significantly reduced. Many people find making one payment can be much more convenient that making five or ten smaller payments. Even if not the best long term plan, in the short run longer amortizations available with debt consolidation loans can help with cash flow.

I have very bad credit and no collateral, like a house or a car, what kind of debt consolidation loan is available for me. Other than borrowing from friends or family, if you have very bad credit and no collateral I know of no legitimate financial entity anywhere that will make you a loan. This is an important point to stress for two reasons. If you have very bad credit and no collateral don't bother spending a lot of time and effort trying to find a loan. I have been trying to find unsecured personal loans for clients with very bad credit for 10 years, only to find none. If anyone reading this knows of a legitimate loan I would be excited to hear about it. Based on my knowledge of financial institutions, their requirements and the default rate that would exists on such loans, I don't believe that anyone who did endeavor to make such loans would stay in business long. With that said, the second point to keep in mind is not to expend any money to anyone telling you they can obtain an unsecured loan for anyone with very bad credit. I have seen ads where people are attempting to sell lists or in some way taking an up front fee for find such a loan. In other related cases credit cards are offered enabling a credit line even with very bad credit, where in reality the application fees, annual fees and other miscellaneous fees result with the borrower essentially paying $250.00 for a $250.00 line of credit.

In this context what constitutes very bad credit? While each account and loan request may be judged on it's own circumstances, a bankruptcy within 2 years or a number of accounts over 120 days late would probably be viewed very negatively by someone examining a request for an unsecured personal loan.

Are there cases where it's not a bad idea to pledge the house as collateral for a debt consolidation loan? Yes, I can envision some situations, particularly in state that offers very little in way of homestead exemptions for homeowners in bankruptcy. In some places the equity in ones home is significantly at risk whether a debt consolidation loan is taken out or not. When the writing is on the wall that a debtor will lose their home unless they can clean up some of their financial mess, a debt consolidation loan can be the tool to save a home.

I heard that debt consolidation loans are tax deductible, is this true? In some cases depending on the cost basis of your home the interest portions may be tax deductible. Potential borrowers should check with their tax advisors to explore what portion, if any, would be tax deductible for them.

If things get better can I pay off a debt consolidation loan early? In most cases there is no prepayment penalty with these loans, but read your documents carefully. Some loans will indeed penalize you an extra-prepayment penalty fee if you pay the loan early.

3. Tax Debt Relief

Why should I use your website instead of using a local CPA or attorney? Consider our experience. We handle more cases in one week that most CPAs or attorneys will handle in their career. Can you rely on someone who occasionally handles a tax resolution case to produce a favorable outcome? At Omni, we handle tax resolution all day, every day.

What can I do when faced with enforced collection action? As a taxpayer, you have rights and options. However, the IRS or state is not obligated to point these out to you. Neither will most tax practitioners %u2013 they just aren’t specialists in dealing with back tax issues. At Debt Quote Advisor, we routinely negotiate payment plans, penalty abatements, and settlement offers that can be tailored to fit your budget, allowing you to stay in business. Additionally, we provide financing and new corporate formation options that may work for you.

What authority does the State or IRS have to collect money from me or my business? The collection divisions of the State and the IRS have the power to file tax liens without court order. They also have the power to levy your bank accounts, wages, investments, retirement funds, business and personal property. The IRS has thousands of Collection Division employees doing this everyday.

Is there a way out? The IRS allows qualified taxpayers to satisfy their tax liabilities for lump sum payments, amounting to a small portion of the liability. Recent statistics also show that 42% of all IRS penalties are abated %u2013 if you know the procedure. Omni Financial can help reduce your liability and get you the fresh start you need.

There are so many tax help companies out there. Why should I choose Debt Quote Advisor’s services? That's simple: experience; clients in every state across America; the most knowledgeable and experienced professionals in this industry are a few reasons why you need to choose Debt Quote Advisor!

Things you should know

• The problem is not going to go away on it’s own. Letting time pass without taking action will only make it worse.
• The IRS and State Collection Divisions can and will levy bank accounts, garnish wages and seize assets.
• Dealing with a tax issue can be overwhelming. You don’t have to go through it alone. Let our experts guide you through the process so you can go back to living your life with complete confidence.