Month: April 2019

Documents Needed

Block 16.2  Article 2.3 Transfers of Structured Settlement Payment Rights   Quick Resource Guide:  “The List” of Documents Needed to Give to the OAG for Structured Settlement Transfers   Below is the official list of documents needed by the California Office of Attorney General pursuant to CA Code of Insurance 10139(a), taken directly, and verbatim, from the code itself on December 12th 2014, Friday at 12:19 p.m.:   a copy of the transferee’s petition for approval a copy of the written disclosure statement required by subdivision (a) of Section 10136 a copy of the annuity contract any qualified assignment agreement […]

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Debt Settlement

11 Questions You Absolutely Must Ask Any Debt Settlement Company

May 18, 2015 by National Debt Relief

A young female business manager behind a computer talks on a mobile phone.

If you’re laboring under a big cloud of debt the idea of getting relief from it probably sounds very good. If you were able to get those debts paid off you could stop worrying about them, quit sweating every time the phone rings because you’re afraid it’s yet another debt collector calling … and get back to having a better, less stressful life.

What exactly is debt relief?

Debt relief is a sort of an umbrella term that covers several different ways to deal with debt including forbearance, debt restructuring, and debt settlement.

Forbearance generally means that the lender or lenders forgive your past due interest payments so long as you start making your payments. Debt restructuring is where an existing debt is replaced with a new debt. This usually involves a reduction in your principle or a change in the terms of the debt. For example, you might consolidate your credit card debts into a new personal loan that would be repaid over five or even 10 years. This would allow the same principle (your balance) to be amortized over more time resulting in smaller monthly payments.

Debt settlement

This form of debt relief grew in popularity as a result of the Great Recession that left many people either unemployed or underemployed. The way it works is that you contact with a debt settlement company that then offers lump sum payments to your creditors to settle your debts but for much less than their balances. In fact, good debt settlement companies are usually able to settle unsecured debts such as credit card debts for about fifty cents on the dollar.

Why would lenders ever agree to settle?

Lenders can be persuaded to settle debts when they are made to believe that it’s either that or you will be forced to file for bankruptcy. This comes under the old “half a loaf is better than none” idea. Companies that hold unsecured debts understand that if you file for bankruptcy they will get nothing. This is why most of them will settle.

Questions to ask any debt settlement company

While debt settlement can be an excellent way to get debt relief, it’s important to choose a reputable company. Here are 11 questions to ask any debt settlement company to gauge its honesty and reliability.

How long have you been in this business and how much debt have you settled?

Young companies have very little experience in settling debts and may not have settled many at all. The company you chose should have been in business for at least five years and should have settled many millions of dollars in debts.

What do you charge?

The Federal Trade Commission has outlawed upfront fees so if a settlement company tells you that you must pay something upfront, run away. No reputable debt settlement company will charge you any fees until it has settled your debts. Before your sign an agreement with a debt settlement company be sure to ask for a full disclosure of is fees in writing.

Do you pay my creditors monthly?

Honest debt settlement companies do not pay your creditors monthly. As noted above they settle debts in the form of lump sum payments. If the settlement company says that it will be making monthly payments to your creditors, big red flag!

Will this affect my credit report?

The correct answer to this is, “yes.” Debt settlement will impact your credit report and credit score. If a debt settlement company claims anything to the contrary – another big red flag.

When will you settle my first debt?

When the debt settlement company will be able to settle your first debt will depend on your creditors and the amount of money you can save for your settlements. The more time the debt settlement company takes to settle your debts the greater are the chances you will end up getting sued over one of them.

How long will this take and how much will it cost?

It’s really impossible for a debt settlement company to tell you how long it will take to settle your debts. However, under the new rules for debt relief the company should be able to give you an estimated time frame based on the amount of debt you owe and how much you are able to save for your settlements. Most of the leading debt settlement companies operate on a fee basis, which varies from 15% to 25% depending on the size of your debt. Once the settlement company and you reach an agreement as to how much of your debt it will be settling it should be able to give you a very clear idea of what it’s fee will be.

Where is my money while you’re settling my debts?

Your money should be in an escrow account held by a third-party while your debts are being settled. This account should be FDIC insured. You must have control of the account and the ability to close it and get your money back without a penalty at any time. The best debt settlement companies offer a 100% satisfaction guaranty that you can withdraw from your program at any time for any reason and not be charged a single cent.

Are there alternatives to settling my debts?

A reputable debt settlement company will explain to you that there are alternatives available to debt settlement. For example, it will tell you if you would be a good candidate for a debt management plan. It should also not discourage you from talking with a bankruptcy attorney about that option. If the debt settlement company discourages you from looking into other options that’s another big red flag.

When will I hear from you?

Reputable debt settlement companies practice transparency. This means they will keep you in the loop with updates all along the way as to the status of their negotiations with your creditors.

Does debt settlement have tax consequences?

The answer to this is also “yes.” Lenders are required by the IRS to report any settlement of more than $500. However, many lenders simply do not do this. Plus, if you can show the IRS you are insolvent you’ll probably get those taxes waived.

How do you calculate my estimated savings?

Let’s assume for the sake of the example that the debt settlement company says it will save you 50% of your debt. It must base this estimate on the total amount of debt being settled plus any fees or interest that accumulate after you enroll in its program. Plus, they must include the fees that you’ll pay before they calculate your savings. If the debt settlement company doesn’t provide a complete disclosure of the savings it estimates it can get you, tell it so long.

Contact the Law Offices of Eugene Ahtirski today for a FREE consultation

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Filing Structured Settlement Transfer

Block 16.4 Article 2.3 Transfers of Structured Settlement Payment Rights   OAG May Charge for Filing Structured Settlement Transfer Agreement   California Insurance Code 10139(c) simply states, “The Attorney General may charge a reasonable fee for the filing of the transfer agreement as provided in this section.  The fee shall be paid by the transferee.”   Just as there is a filing fee for the petition to the Superior Court, there can be a filing fee for the transfer agreement to the Attorney General’s Office too.  Note that this fee is for the filing itself, not for a “review”, if […]

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