Questions & Answers:

1.         Who is qualified for our program?

Colonial Credit Solutions debt settlement program is for people facing HARDSHIP.  This means people who are late paying their debts, have little or no ability to pay their debts in the future and are facing a possible bankruptcy.

2.         Who is not qualified for our program?

Colonial Credit Solutions does not advocate that any person default on their debts.  This program is not designed to negotiate debts for people who have reasonable means to pay off their debts.  If you have the ability to pay your debts in the normal fashion, by paying minimum payments, then you should honor your debts and do so.  This program is NOT for people who are gainfully employed, have high credit ratings and can meet monthly debt obligations.

3.         When I enrolled in the program I was working with a Debt Consultant.  Should I continue to work with that person throughout the program?

No.  Once your file is processed it moves to the Client Services Department so that we can handle your account more effectively.  In order to ensure that you receive the best possible service, you should always communicate directly with the Client Services Department and not your Debt Consultant.  You will also have several other people working on your account throughout the course of your program.  But for right now, you should contact Client Services with any questions or concerns you have about your account.

Client Services Phone/Fax:  (866) 558-3809 / (714) 836-7357 

4.         When does Colonial Credit Solutions start negotiating my debt?

At such time Colonial Credit Solutions has received the first payment, we will commence the services.  Colonial Credit Solutions will advise Client of all good faith offers made by creditors and debt collectors, and of their acceptance of any offers made by Colonial Credit Services.  No accounts will be settled without Client approval who has absolute discretion to accept or reject any settlement offer.  We can only settle a debt once the full funds are available in your settlement account.

5.         What correspondence from my creditors do I need t fax to Colonial Credit Solutions?

All correspondence, other than statements, need to be faxed in immediately to (714) 836-7357.  This includes notices from Third-Party agencies, settlement offers, and information about charge-offs.  Keep your statements and other communications with your Welcome Packet so that you may refer to them throughout the duration of your personal negotiation strategy.

6.         My creditors keep calling.  How long should I expect these calls to continue?

Have you noticed that it is the same one or two people calling on an account?  This is more of a call center issue.  Your original creditor hires call centers and the people on the other line have no power over your account.  Some times the quickest way to reduce this is a letter directly from you to the creditor.  There may still be calls coming in, but continue screening your calls with Caller ID or an answering machine, and before you know it, you’ll be ready to settle on your accounts and on schedule to being debt free.

Every time you pick up the phone, they know it is a number where they can get a hold of you and they will mark that number as responsive and they will continue to call.  The best way to stop the calls is to not pick up the phone if you do not recognize the number.  Once your account moves to a third party agency or a different department, they will send you notice and you should fax that to us immediately.

Although your original creditor has the right to call you, they do not have the right to harass you.  Client Services has more information regarding the steps you can take in dealing with the calls if they are becoming stressful.

7.         My creditors said you haven’t paid them yet.

There has been no payment because you haven’t settled with them yet.  You will be fully aware of the payments made to your creditors during this program and it will be done by you under the savings plan that was agreed upon in the Program of Scheduled Debt.  Your creditor is always going to want a payment now, but you have decided to save up and settle your debts one at a time.  You decide the payment terms, not the creditor and you have the final say on the settlements that are reached. 

8.         I think I might have trouble making my next payment to Colonial Credit Solutions.  Will you still be able to assist me if I miss a payment?

In order for you to successfully complete the negotiation program, our clients must be dedicated to the program’s financial commitments.  If you are unable to make a service fee payment to Colonial Credit Solutions please contact us as soon as possible.  We understand that problems can arise from time to time and are always willing to work with you.  Any needed payment changes need to be communicated to a Client Specialist five (5) business days prior to the scheduled draft.  This will help to ensure that we have time to coordinate an agreeable solution to your concern. 

9.         Will creditors call me at work?

Once you have informed the creditor that they are not allowed to call you at work they should not continue to do so.  In fact, jeopardizing your employment with harassing calls is against the law.  The quickest way to end these is a written request directly from you.  Included in the Welcome Packet are blank letters fro original creditors and third-party collectors to cease harassing calls.  When creditors call you at work they need to be notified of your rights.  If you don’t notice a difference in a couple of weeks please notify Client Services.  You may also want to look into filing a complaint with the appropriate reporting agency.

10.       I received a notice that my account is being handled by a Third-Party agency.  Should I be worried?

Absolutely not.  Creditors routinely place accounts for collection with collection agencies and collection attorneys.  While the letters or phone calls you may receive from such companies can often be confrontational and threatening, you should understand that such activity is “business-as-usual” in the world of debt collections.  If you begin receiving phone calls from such an agency or attorney, then you should contact a Client Specialist.  Written notices that you may receive from any collection agency or collection attorney should be faxed to Client Services at (866) 558-3809.  This is important information for tracking your account.  In many ways, this change can be good.  Collection agencies are guided by different federal laws and working with Colonial Credit Solutions, you may soon find that you are able to reduce the calls you are currently receiving. 

11.       Why am I still receiving statements from the credit card companies showing interest and late fees?  Shouldn’t Colonial Credit Solutions be reducing my debt?

Creditors have the legal right to continue accruing interest, late fees, and over limit penalties (if applicable) while your debts are in the program.  A key point to understand is that the amount of money involved is less significant when compared to the total amount of money saved over the duration of the program.  For example, if you start out with exactly $30,000 of debt, you would pay approximately $75,000 over a ten-year period to avoid late fees and penalties, and yet you would still owe about $27,600 at the end of those ten years.  Under the program, let’s say the debt inflates to $36,000 during the first six months, since you may no longer be keeping up with those endless minimum payments.  By the time we settle those debts at our average 40%-60% on the dollar, you will have paid out only about $21,800.  Would you rather pay $75,600 over ten years and still owe most of the original $30,000?  Or would you rather pay $21,800 over three years to become completely debt free?

12.       I received a settlement offer from one of my creditors, what should I do?

Call Colonial Credit Solutions Client Services at (866) 558-3809.  During the course of your Debt Negotiations Program, a creditor may offer a settlement directly to you.  It is very important that you understand that such direct settlement offers are a direct result of your participation in our program.  You should always forward such offers to Colonial Credit Solutions Client Services.  The decision to accept or decline any settlement offer is completely yours to make, however, you are paying us for our experience and we would like to speak with you before you make any decisions on settling an account.

First, some creditors actually try to “trick” clients into calling them by mailing a settlement offer.  When the client calls the creditor to take the deal, they are informed that the offer is no longer valid.  Intense collection pressure is applied to force a payment from the client, which might jeopardize the entire negotiation process.  Second, the offer extended by the creditor may no be the best available settlement.  Third, if you attempt to work a settlement with a creditor on your own, you will lose the protection that comes from the involvement of a professional third-party negotiation firm.  Fourth, they may offer you a settlement that looks hones, which in fact only benefits the creditor and not you.  Part of our service is to ensure that each settlement is properly documented before funds are present to the creditor, and to act on your behalf should a creditor attempt to collect the forgiven balance later on.  By speaking with a Client Service Specialist, you can be confident that you will be making an educated decision regarding your settlement and your debt.

13.       My first account was settled last month, but I received a statement today stating that I still owe the full balance.

After we reach a mutually agreeable settlement with one of your creditors, it usually takes 60-90 days for the settlement to clear and post in the creditor’s database.  What this means is that you may receive one to two additional creditor statements showing the payment of the settlement amount, and an open balance for the remainder.  This is normal and should not cause undue concern.  Within 60-90 days, the account will be updated to reflect a zero balance.  If you receive more than two post-settlement statements showing a positive balance on your account, or any additional collection activity on a settled account, call our Client Services Team right away.  We will then get in touch with the creditor again to make sure the balance is properly set to zero and that you receive no further collection notices or statements showing a balance owed for that account. 

14.       Can creditors garnish my wages?

Yes.  This action would depend upon the state you reside in and your circumstances.  However, this can be a long and drawn out process for the creditors.  The creditor has to sue you, successfully obtain a judgment, and then file for a garnishment action.  If you are willing to work with your creditors then garnishment can normally be avoided.

15.       I received a notice from law firm.  Am I getting sued?

Many of the major creditors hire law firms which are collection agencies to handle the accounts.  The paperwork probably says something to the effect of “This is an attempt to collect a debt” and “you have 30 days to dispute the validity of this debt”.  This is very typical, but you should fax that as soon as possible.  In many respects this is a good thing.  Once a notice is sent to the agency they will not be allowed to call you anymore.

16.       How should I respond to Arbitration or possible litigation?

Although this is not typical during the program, occasionally accounts will be transferred to arbitration or litigation.  If you receive this information contact Client Services immediately at (866) 558-3809.  You should also be prepared to FAX this information to us at your earliest convenience at the same number.  The important thing to remember is that you still have a lot of options for handling this account, and Colonial Credit Solutions Client Specialists have the training available to assist you throughout the program. 

17.       Will this program have a negative effect on my credit?

Not like bankruptcy!  The Debt Settlement Program may have a short-term negative effect on your credit profile.  When a delinquent account is settled this is reflected on your credit report.  A settled account is better than an unresolved delinquent account.  Your credit score should improve after successfully completing our program.  Since these debts are paid, your debt-to-income ratio should improve.  Debt to income ratios are not part of your credit score.  However, they are an important measurement by which lenders evaluate applicants for auto and home loans.  Once negotiated and settled, your creditors will report the accounts as “settled as agreed” or “balance zero”.

18.       Will Colonial Credit Solutions repair my credit?

No.  Colonial Credit does not engage in credit repair services.  No company can resolve legitimate negative items from your credit report.  Negative items will remain on your credit report according to the conditions imposed by the credit reporting agencies.  The goal of our debt settlement program is to settle your delinquent accounts. 

19.       I received a notice from the IRS regarding one of my settlements.

Financial institutions are generally required to provide a Form 1099-C in the event that a forgiven debt amount exceeds $600.00.  Please note that just because you receive a Form 1099-C showing income in the form of a canceled debt, this does not necessarily mean that you owe taxes on the forgiven portion of the debt.  In fact, most Colonial Credit Solution clients can legally and ethically exclude forgiven debts from income through the “insolvency exclusion” provided by the IRS code.  Briefly, the exclusion means that your liabilities exceed the fair market value of your assets, or in other words, you “owe” more than you “own”.  Please refer to IRS Publication 982 for more detailed information.  We also strongly recommend that you consult your tax advisor regarding your particular circumstances.  Should you or your tax advisor have questions regarding your account, please feel free to call Client Services for further information.  Colonial Credit Solutions does not provide financial, legal or tax advice.

20.     What is a Settlement Account?

You will be asked to place settlement funds into an FDIC insured trust account on a monthly basis. This amount will be determined in your initial consultation by a Debt Consultant and is based upon the total amount of debt owed and what you can afford on a monthly basis depending on your income and expense budget. Each person's situation is different and the negotiation process will begin at different times depending on the amount of your debt.

Once the creditors agree to a settlement amount, Colonial Credit Solutions will present the creditors offer to you. If you approve the settlement, we will instruct the creditor to fax over the 'settlement offer' in writing. Next a recorded conference call will be established with you, the creditor, and Colonial Credit Solutions, Inc., to settle the balance on the account.  This will be completed with each of your accounts until you are debt free.