Frequently Asked Questions
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Are your services really free?
- Absolutely. You don’t owe us a penny. Ever.
Why would Financial Samaritan provide these services for no charge?
- Very simple for two reasons: we want to be the good Samaritans we are and to help you get back on your feet.
- It’s the right thing to do. All of us at Financial Samaritan have families and many of us have gone through the same thing you are going through now, so we know how devastating it can be. We understand because we have been there too.
- It’s the good thing to do. We believe that if we earn your trust, someday you’re going to want a new credit card, mortgage, car loan, and some other financial product or service. We think you will give us a chance to provide those services for you at a good value and fair price.
- Every time we help a family, we make an investment in our own future.
How does debt negotiation work?
- Financial Samaritan gathers information from you about your debts, finances, family and their needs. We evaluate this information using a complex mathematical process that we’ve refined over the course of settling the debts of more than 4.5 million Americans.
- Armed with this analysis, we communicate with your creditors on your behalf. Our approach helps creditors to have a deeper understanding of the reality of your situation so that they can act accordingly.
- Using the information we gather and analyze, we submit to creditors a proposed settlement plan that is within your means. Creditors will evaluate your situation and respond with an acceptance or rejection of the proposal. Sometimes creditors will respond with a counter-proposal. We then deliver the creditor response to you for a decision to accept or reject. It’s important to know that you are always in the driver’s seat—we are only there to advise you.
- If you accept the proposal, then you will make payments directly to the creditor in accordance with the agreed plan. If you reject the proposal, we will gather more information and repeat the process until you and the creditor reach a final agreement.
- Again, you are always in control of the final decisions and you are always in control of your money.
How much discount can I expect?
- There is no single answer to this question. Every customer’s situation is different and our analysis leads to a result that reflects your particular reality. Depending on your individual situation, the discount will result accordingly.
- You always make the final decision about every negotiation.
What types of debts can you negotiate?
- The most common negotiations relate to credit card debts, medical debts, student loans, signature loans, judgments, and other unsecured debt. We can also negotiate mortgage loans and auto loans; although they are more complex and require much more effort and information in order to convince a creditor to make a deal.
Does debt negotiation affect my credit score?
- There is no single answer to this question. Determining a credit score is a complex and continuously changing process. Virtually everything we do as consumers affects our credit score in one direction or another.
- We can’t promise any particular outcome of a credit score. We can promise that delinquent payments month after month will drive your score lower and lower. Getting rid of your delinquent debts will halt the continual decline of your score. As you start paying back your debt, you will begin to improve your score. Many debt negotiation customers will see an initial decline in their credit score and then a gradual improvement over time. Some customers have seen as much as a 150-point increase over six months.
- Customers with good credit scores should cautiously use debt negotiation. You should understand the pros and cons that will affect your final decision.
I have a debt and the payments are current but I don’t think I can keep up the payments. Can that debt be negotiated?
- Yes. It is difficult to negotiate a discounted settlement of a debt that is not delinquent. A successful outcome requires a thorough presentation to the creditor of the circumstances and why they should consider a discounted payment of the debt.
- If you are current on your obligation, we encourage you to keep making payments while you negotiate. It is never a good idea to purposely choose to be delinquent on your obligations just so you can receive a discounted settlement.
Will the creditor continue to call me during the debt-negotiation process?
- The goal is to stop the creditor calls or at least slow them down as much as possible. One of the documents you will be asked to sign is an appointment of Financial Samaritan as your representative. This gives us permission to communicate with your creditors and it insists that creditors work with Financial Samaritan. Many creditors will defer phone calls to you during this process.
- We are 100% honest with you: Some creditors will violate the rules or claim that the rules don’t apply to them, and they may continue to call you. We suggest that you accept the calls from the creditor, but inform them that you are working with Financial Samaritan and would prefer that the creditor not contact you directly.
Can I be sued?
- Every creditor has the legal right to use the courts to collect a debt that is in default. Lawsuits are not as common as debt collectors make you think. Most creditors would rather work out a negotiated settlement than spend money to take a customer to court and perhaps be unable to collect on the judgment.
- A proactive offer of negotiation from you to the creditor will almost always be viewed as a positive by the creditor.
Can my wages be garnished?
- No one can take a part of your paycheck without court approval. You must be given advance notice of any court action through formal paperwork.
- Actual garnishment actions do not happen without advance warning. First, a creditor must bring a lawsuit, obtain a judgment, and then take an additional step to obtain authorization for the garnishment.
- There are some notable exceptions for the IRS and specific student loans.
What is the difference between debt settlement and credit counseling?
- Credit counseling agencies typically set up payment plans where you eventually repay the entire amount due to the creditor. They work more for the interest of the creditor because credit counseling companies receive a fee from the creditor for each payment you make.
- Debt settlement is intended for people who have more debts than they have the ability to repay. Financial Samaritan is a unique type of debt-settlement company because we don’t charge you any fees at all. We also help with employment and other needs you may have. We have many years of experience in settling the debts of millions of Americans.
What about bankruptcy?
- There are two types of bankruptcy: Chapter 7 is best described as a “fresh start” because unsecured debts are wiped out. Chapter 13 is a plan for reduced monthly payments for a period of time. Each type of bankruptcy has specific requirements and requires advance fees to be paid to your bankruptcy attorney.
- As a rule of thumb, bankruptcy should be your last option for a financial restructuring. After evaluating your information and specific situation, Financial Samaritan might recommend that you should consult a bankruptcy attorney; first let’s see if we can find a solution that works best for you.
Can I do debt negotiation myself?
- Yes, it’s possible for you to negotiate directly with creditors, but it is usually not a fair negotiation. Debt collectors are trained to deal with consumers. They understand how to apply psychological pressure to lower your resistance and how to frustrate your efforts.
- An independent negotiator can take a “just the facts” approach with creditors and typically get to a manager who has the authority to make a decision.
I heard that I might have to pay more taxes. Is that right?
- Federal law requires creditors to send you a tax form (called a 1099C), if they forgive more than $600 of your debt. In some situations you might be required to include that amount on your tax return.
- There are also situations where you are not required to include that amount. Most often those situations relate to people who have had financial problems, where all their debts are greater than the market value of everything they own.
- Your best advice will come from a tax professional.
Is debt negotiation right for me?
Debt negotiation can be a great strategy but does not fit the needs of everyone. Ask yourself the following questions:
Do I have a legitimate financial hardship?
The most common drivers of financial hardship are those who have lost a job, and have unexpected medical expenses. These are legitimate hardships that can happen to anyone, through no fault of their own, and these situations can wreck a family budget.
Debt negotiation is not a “free lunch” for people who don’t feel like paying their bills. But, if you are in over your head due to circumstances that are no fault of your own – and you would prefer to work things out with your creditors instead of filing bankruptcy – debt negotiation is an honest and ethical alternative.
Am I committed to finding a solution?
No creditor will release you from 100% of your obligation. All creditors want to recover the most that they can. Financial Samaritan is here to help you prevent bankruptcy, assist with employment and construct a presentation to creditors for a successful payment plan. Most creditors would rather accept what they can get and avoid the additional costs and losses that can result from your bankruptcy.
Am I open to learning new ways to manage my finances and make better financial decisions?
Creditors are sometimes persuaded by your efforts to improve what the industry refers to as “financial literacy.” Although the term sounds tedious, the reality does not need to be difficult. Financial Samaritan offers a range of free, self-paced learning programs, planning, and budgeting tools that will make your life easier.
Last date of revision: April 9, 2015