Debt Relief FAQs


What Is Debt Settlement?

Debt Settlement (also referred to as debt negotiation, negotiated debt settlement or sometimes incorrectly called debt consolidation) means that your debt is negotiated down to a reduced amount and paid off in a lump sum. In some rare cases, multiple payments are utilized to pay off the debt, settling the account in full. Settlement is one of the most effective choices available to consumers. It’s a great choice if you have more debt than you can pay off in a 2 – 3 year time frame or are experiencing a financial hardship that has you falling behind (or just about to be) on your monthly payments. Why would creditors choose to settle debts rather than simply charge you interest and late fees over and over again? Well, it’s really a matter of dollars and good sense. Creditors know that if you get into such a bad financial position that you can’t pay your monthly payments, you may decide to declare bankruptcy or simply do nothing. In this case they may get nothing! Therefore, they are usually very willing to settle for a lower amount, given your hardship, than risk getting nothing at all, especially with a bankruptcy among the alternatives.

What Makes Me a Good Candidate for Debt Settlement?

A debt settlement program is certainly not for everyone. Qualified candidates are those who have a legitimate financial hardship, which has caused them to fall behind on their payments to creditors, or will cause them to fall behind in the near future. Affirmative Debt Relief will not welcome anyone into the program that has the intentions of defrauding, deceiving, or swindling their creditors. We only represent consumers who are truly in need of our services & stand to significantly improve their financial situation.

Why should I use Affirmative Debt Relief to settle my debts as opposed to handling it myself?

Our experienced debt arbitrators have established impeccable relationships with the creditors & collection agencies. Our arbitrators have extensive knowledge in Federal & State consumer laws & exercise the Fair Credit Reporting Act, Fair Credit Billing Act, as well as the Fair Debt Collection Practices Act to help settle your debt.

Who is holding my money while I’m waiting on a settlement?

Your funds will be held at Global Client Solutions, which is an FDIC insured dedicated account. This account will be opened in your name with you having ultimate control over its funds. The monies collected in this account get disbursed only at the time a negotiation is reached with the creditor and you agree with the settlement offer.

Should I keep paying my credit card bills?

Due to your legitimate financial hardship, you are able to participate in this savings program in order to help pay your debts in the future. We are not here to advise you not to pay your debts now, however if you are able to make payments to your creditors, then you probably don’t actually have a legitimate financial hardship.

Do I have to include all my debts into a debt settlement program?

In order to enhance the success of the program, we will strongly encourage that all of your qualified creditors enter into the program. Your debt consultant will walk you through all of the program benefits when including all qualified creditors and potential opportunities of leaving out a debt, if that will be in your best interest.

How Will Debt Settlement Affect My Taxes?

In the worlds of business and finance, solvency is a term that is used to refer to the current level of financial stability associated with a company or individual. The term can also apply to the status of a particular area of finances, such as insurance, cash flow, or property. To be solvent is to be in a position where it is possible to honor all current financial obligations according to the terms and conditions related to each debt, while still having assets left over for other purposes.

Insolvency means the inability to pay one’s debts as they fall due and in normal cases it is bad to be insolvent, but when discussing paying taxes on forgiven debt this become a plus. An individual or business that is insolvent will usually have their forgiven debt excluded from their income, thus not being required to pay taxes on it.

“A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. The forgiven debt may be excluded as income under the ‘insolvency’ exclusion. Normally, a taxpayer is not required to include forgiven debts in income to the extent that the taxpayer is insolvent.” –

How is debt settlement different from bankruptcy?

Bankruptcy is an option that is generally treated as a last resort. It will remain on your credit report for 10 years & you can be denied employment, state licenses, insurance, as well as tenancy of an apartment. Most importantly, you can be denied virtually any type of credit with a bankruptcy on your report. In addition, since the bankruptcy laws have changed recently, it is even more difficult to qualify for Chapter 7, the method of liquidating assets to eliminate your debt. You will not be allowed to discharge alimony, child support, taxes, student loans, judgments, or any loan on the bankruptcy petition. Under Chapter 13 bankruptcy, your debt payments are simply restructured meaning you will still have to pay a percentage of your debts while you suffer the consequences of bankruptcy. Debt settlement is an alternative to bankruptcy.

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Where can you report adebt collector for an alleged violation?

Report any problems you have with a debt collector to the office of your state attorney general and the Federal Trade Commission. Many states have their own debt collection laws and your state attorney general can help you determine your rights.

What must the debt collector tell you about the debt?

Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe, the name of the creditor to whom you owe the money, and what action to take if you believe you do not owe the money.

Who is a debt collector?

A debt collector is any person, other than the creditor, who regularly collects debts owed to others. Under the 1986 Amendment to the Fair Debt Collection Practices Act, this includes attorneys who collect debts on a regular basis.

How may a debt collector contact you?

A debt collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at unreasonable times or places, such as before 8:00 a.m. or after 9:00 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves.

May a debt collector continue to contact you if you believe that you DO NOT owe money?

A collector may not contact you if, within 30 days after you are first contacted, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

What debts are covered?

Your personal, family, and household debts are covered under the act. This includes money owed for purchase of an automobile, for medical care, or for charge accounts. 

What control do you have over payment of debts?

If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.

What can I do if I believe that a debt collector violated the law?

You may have the right to sue a collector in a court of law. If you win, you may recover money for the damages you suffered and, in certain jurisdictions, you may recover statutory damages. In addition, in certain jurisdictions court costs and attorney’s fees may also be recovered.

May a debt collector contact anyone else about my debt?

A debt collector may not contact third parties, except only to find information on where and how to contact you. Collectors usually are prohibited from contacting such permissible third parties more than once. In addition, the collector may not tell anyone other than you (or a co-signor) that you owe money or that they are a debt collector.

Definitions and General Provisions

If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a debt collector. You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly by prohibiting certain methods of debt collection. Of course, the law does not forgive any legitimate debt you owe. This section answers commonly asked questions about your rights under the Fair Debt Collection Practices Act.


Summary of Illegal Actions

The following actions are illegal:

  • A debt collector calls you at work and knows that it is inconvenient or that your employer forbids it.

  • A debt collector calls you before 8:00 a.m. or after 9:00 p.m. in your time zone.

  • A debt collector makes an excessive number of phone calls to annoy or harass you.

  • A debt collector knows that an attorney, whose contact information is known or is easy to locate, represents you and the debt collector continues to contact you.

  • A debt collector tells a person other than you, your spouse, or your attorney that you owe money. (If you are a minor, the debt collector can tell your parents or guardians about the debt.) Debt collectors can only communicate with other people to obtain contact information about you.

  • A debt collector misrepresents the amount, character, or legal status of a debt.

  • A debt collector gives others credit information about you that is false, or should be known to be false.

  • A debt collector fails to honor your dispute or cease communication rights.

  • A debt collector threatens to take your property or garnish your wages when this action would not be legal or the debt collector does not actually intend to do it. Your property cannot be taken and your wages cannot be garnished without a court order (judgment).

  • A debt collector uses, or threatens to use, violence or any other illegal means to harm you, your family, your reputation, or your property.

  • A debt collector uses profane or obscene language when communicating with you.

  • A debt collector threatens you with criminal prosecution or implies that you have committed a crime. Debt and credit issues are matters of civil law, not criminal law.

  • A debt collector tricks you into accepting charges for collect calls, telegrams, a C.O.D., etc.

  • A debt collector cashes, or threatens to cash, a post-dated check before the date written on the check, if the check is post-dated by five days or more.

  • A debt collector does not give three to 10 days advance notice before cashing a check that is post-dated by five days or more.

  • A debt collector claims to be an attorney or sends a letter made to look like it is from an attorney (unless the debt collector really is an attorney).

  • A debt collector sends a letter that is made to look like a government or court document when it isn’t.

  • A debt collector sends a government or court document that is not recognizable as such.

  • A debt collector threatens any action against you that is not legally feasible or that the debt collector does not intend to take.

What are our fees?

We do NOT charge any upfront fees. All our fees are included into your one low monthly program payment that is deposited into your FDIC insured dedicated account; however, they are not charged to you until your enrolled debt(s) are resolved. Actual fees vary state by state and/or by debt amount enrolled. Please contact a debt consultant for more information.


Mailing Address:

99 Wall ST, suite 1305

New York, NY 10005





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*Clients who make all their monthly program deposits pay approximately 55-75% of their original enrolled debts over 24 to 48 months. Not all clients are able to complete their program for various reasons, including their ability to save sufficient funds. Our estimates are based on prior results, which will vary depending on your specific enrolled creditors and your individual program terms. We do not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Our service is not available in all states and our fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of debt settlement services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements we obtain on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S.12-03825.

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