Sofos Debt Relief

DEBT-RELIEF SERVICES AND HOW THEY WORK

4 DEBT-RELIEF OPTIONS

Debt Counseling

This program involves working with a credit counselor to analyze your income, expenses and outstanding debt. These companies make recommendations and set a budget on how to tackle your debt and pay down your bills. Some relief comes in the form of setting up repayment plans or lowering the interest rates on your debt. These programs typically do not reduce the total amount owed. If you're currently struggling with making minimum payments month to month, this may not be the best option for you.

Debt Consolidation

Debt Consolidation is a type of loan that allows you to consolidate debt and pay off your current creditors. This results in making one monthly payment. The short term benefits could end up costing you more down the road. First, you must qualify for a loan and in some cases, the lender may not extend enough money to cover all of your debt. Then there's the issue with interest rates. If your consolidation loan has a variable APR, you could end up paying tens of thousands of dollars over time.

Bankruptcy

Chapter 7 and Chapter 13 are the most common filings for individuals facing enormous debt. Bankruptcy is governed by federal law and is a formal legal process that comes with severe costs. Bankruptcy may not eliminate all of your debt and it stays on your credit for 7 to 10 years. If the other debt relief options do not work for you, a qualified bankruptcy attorney may be able to assess your situation and review options and consequences.

Debt Settlement

Debt Settlement Programs work to negotiate your outstanding balance with your creditors and settle for less than you owe. Once we negotiate a settlement you are satisfied with, the creditor is paid with the money you saved in your FDIC-insured dedicated account and the debt is reduced to a zero-balance. We continue with the same process on your other accounts until all enrolled debt has been settled. Debt Settlement provides faster relief and greater savings than just making monthly payments.

Frequently Asked Questions

Is Debt Settlement right for me?

This program is designed for individuals and families seeking an effective debt relief solution as an alternative to bankruptcy. Most of our clients are making their monthly creditor payments prior to enrollment, but they are not seeing their balances go down. Our clients face a financial hardship and cannot continue with their monthly payments without defaulting on other bills and obligations.

What Type of Debt qualifies for Debt Settlement?

We only work with unsecured debt, meaning debt without any collateral attached to them. This includes credit cards, lines of credit, personal loans, medical bills, repossessions and accounts already in collections.

How will my credit score be affected?

Depending on what your credit score is at the time of enrollment depends on how your credit will decline during the program. In general, credit scores may decline while enrolled in the program. As we work to settle your accounts reducing them to a zero-balance, your credit will gradually improve because you no longer have maxed out accounts. Results vary depending on your payment history, credit utilization, length of credit history and debt-to-income ratio.

When will my debts be paid off?

Each situation is unique and the answer varies. Generally, our clients become completely debt free within 24 to 48 months with our program.

Factors that can reduce or extend the timeframe include types of debt, ability to save money and commit to monthly deposits, amount of debt and the overall financial situation. Our debt consultants will review each of these components to develop the best program to fit your needs.

Does enrolling in a debt relief program stop collection calls?

Creditors can use internal collectors or outsource to a third party agency. Their only goal is to get you to pay the full balance. Although we cannot stop collection calls, we can say this is evidence the program is working.

No debt relief program has the ability to stop collection calls but it is important to understand that as the calls increase, we're closer to being able to negotiate the lowest settlement offer on your account. It is a short term hassle for long term results.

Will I owe taxes on the forgiven debt?

Once again, this answer varies based on a client's financial situation. Creditors may issue a 1099-c if any amount of debt forgiven is greater than $600. This does not necessarily mean that you will be required to pay taxes. In many cases, clients are eligible for an insolvency exclusion under IRS Form 982. It is our recommendation that you consult a knowledgeable tax advisor to assess your situation as we do not offer tax advice.

Calls with the company may be recorded or monitored for quality assurance and training purposes. Our estimates are based on prior results, which will vary depending on each client's unique situation, enrolled creditors and individual program terms. Our clients who make all monthly program payments and settle all enrolled debt realize approximate savings of 45% before fees, or 25% including our fees, over 24 to 48 months. All claims are based on enrolled debt and not all debt is eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save money. We do not guarantee your debts will be resolved for a specific amount, 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 services are not available in every state, including New Jersey and our fees vary from state to state. Please contact a tax professional to discuss potential tax consequences of debt settlement. The use of debt settlement services will likely have an adverse affect on your credit worthiness, may subject you to collection activity or lawsuit from your creditors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, our negotiated settlements we obtain on your behalf resolve the entire account balance, including accrued interests and fees. Please read and understand all program materials prior to enrollment.

Sofos Debt Relief, LLC does not discriminate on the basis of race, color, religion, sex, marital status, national origin, or ancestry.