FAQ

With multiple offices in Texas, our Debt Specialists specifically help Texans resolve very high credit card debt and personal loans with numerous options, including the following:

  1. Debt Consolidation Loans offered by 25 industry-leading lenders.
  2. Credit Counseling Programs to reduce credit card interest rates without needing new loans.
  3. Debt Relief Programs to negotiate forgiveness of a large portion of your debt balances.
  4. Advanced Hardship Programs utilizing the Texas Finance Code. These programs provide an alternative to bankruptcy for clients who qualify.
  5. Resolution of creditor lawsuits.

Many of our clients can make minimum payments, but it will take decades to pay off the debt.  In addition, the interest payments are preventing them from saving and investing.  Another common situation is that people struggle to make payments, fall behind, or have not paid creditors in several months.  Finally, some of our clients come to us when facing creditor lawsuits.  We have affordable programs and solutions for all of these situations, so contact one of our Texas Debt Specialists to learn more.  Phone and office consultations are free with no obligation

We are not a lender.  A division of our company offers a platform for Texans to shop up to 25 top lenders who provide Debt Consolidation Loans in Texas.  The platform offers an advantage over applying at one lending institution because you can choose the best loan with the lowest rate for your situation.  There is no fee, and it will not impact your credit score to receive offers.  Debt Redemption specializes in providing several options to resolve debt without the need for a new loan, including negotiated balance reductions.

Credit Counseling is a hardship program designed to reduce your credit card interest rates, often down to somewhere between 5 to 11 percent without a new loan.  Depending on your current interest rates, the program is likely to lower the monthly cost of your debt and provide you with one convenient monthly payment.  These programs will also accelerate your ability to pay off your debt.  Most Credit Counseling programs are structured to last about five years.  Credit Counseling will not negotiate down your balances, only your interest rates.

Debt Negotiation is a hardship program to negotiate your debts for less than the balances owed.  The programs are often able to provide a monthly cost lower than half compared to making minimum payments.  Depending on your monthly budget, the program term is usually estimated to last between 24 to 48 months but could be longer or shorter than estimated depending on the final settlement amounts.  During this process, your debts go into a delinquent status or remain delinquent while making a monthly payment into an FDIC insured Special Purpose Account.  Each debt is then negotiated and settled one at a time using funds accrued in your Special Purpose Account.

Absolutely!  We assist many clients with creditor lawsuits by utilizing our exclusive relationship with who we feel is the best debt defense attorney in the state of Texas.  We know that money is tight in these situations, so our special arrangement makes legal representation affordable to Texans.   In many cases, the debt defense attorney can represent you and get the lawsuit dismissed with a remarkable reduction of the debt balance listed in the lawsuit.

Whether you enroll in a program or not, any time you do not make at least the minimum payments to your creditors, it will negatively affect your credit rating.  Debt Negotiation allows you to resolve your debt as quickly as possible without bankruptcy.  After your debt is eliminated, you can quickly start rebuilding your credit scores.  The other important factor in your overall financial profile is your debt-to-income ratio.  Even with an excellent credit score, you cannot afford to take on more debt if you have a poor debt-to-income ratio.  An excellent credit score could be practically useless with a poor debt-to-income ratio.  While it is relatively easy for most people to rebuild their credit profile quickly, getting out of debt can be extremely difficult without a solution.  Remember, you can always get a great credit score back, but you will never get back the money lost to high interest or the opportunity to invest the lost money.

If you enroll in a Credit Counseling program and make on-time payments, there is no reason for a creditor to call you.  In a Debt Negotiation program by itself, the creditors or debt collectors may call you until the debts are settled.  We offer an optional legal service to enforce the Texas Finance Code, making it illegal for creditors and debt collectors to call you under Texas law.  These laws are separate from the federal law known as the Fair Debt Collection Practices Act and provide Texans additional protection.  The legal services are entirely optional but made affordable through an exclusive relationship with who we feel is the best debt defense attorney in Texas.  We do not know of any other company that can offer this type of optional legal protection.  We also offer an optional “pre-paid legal” plan like many competitors, but these plans do not prevent your creditors from calling you.

It is illegal to promise a debt will settle in the future for a certain percentage.  However, we estimate what your creditors will agree to based upon historical results with your specific creditors.  Aside from charging much higher settlement fees, we have found that many competitors will provide unrealistic quotes to get their clients signed up and collect their high fees.  The results of these “bait and switch” tactics are often seen with dozens or even hundreds of Better Business Bureau complaints.  Some companies have faced prosecution by federal and state authorities for these types of deceptive practices.  Although any negotiation program could be longer or shorter than initially estimated, we strive to provide all of our clients with the most realistic estimations possible.  If you want an honest assessment by a company that will work hard to save you the most money possible, speak to one of our Texas Debt Specialists today.

Debt Redemption Texas Debt Relief never charges for a consultation, and there is no obligation.  For our affiliated Credit Counseling programs, the fees range between $35 to $55 a month.  Our Debt Negotiation clients do not pay any settlement fees until an account is settled.  All of our fees are included in the affordable monthly program amount that we quote you.  Our settlement fees are a flat 15 percent of your enrolled debt.  Most Debt Relief companies charge settlement fees that are 20 to 40 percent higher than ours.  Debt Redemption’s fees do not include optional third-party fees such as attorney representation or legal plan subscriptions.  The administering Texas law firm sets fees for Advanced Hardship Programs.

Yes, we do for our Texas Debt Negotiation programs!  Typical settlement fees in our industry are between 20  to 25 percent of your total enrolled debt.  As a Texas company focused on resolving debt for Texas residents, we keep our overhead low and offer settlement services at a flat fee of 15 percent of your total enrolled debt amount.  This means that Debt Redemption’s settlement fees are 20 to 40 percent less expensive than most competitors.  Settlement fees are not charged until an account is settled and payment has been made towards the settlement.  It is also important to keep in mind that many competitors will charge very high settlement fees and quote you an unrealistic low monthly cost by estimating your creditor settlements unrealistically low.  We will not participate in this bait and switch tactic as your program is much more likely to run much longer than quoted.  Read the Better Business Bureau complaints of competitors, and you will see many of them use this deceptive practice.

If you are qualified for our services and can find a reputable company with lower fees, we will provide our settlement services with a lower fee than our competitor, or we will provide you with a $250 Visa gift card.  The company must be registered with the Texas Office of Consumer Credit Commissioner (as required by law) and rated “A” or higher with the Better Business Bureau.  This guarantee only applies to our settlement services and does not apply to any optional third-party service.  Please speak to one of our Texas Debt Specialists for further details.

Credit Counseling can assist with most credit card debt and some unsecured personal loans.  Debts need to be less than 6 months delinquent.  Our Debt Negotiation programs can assist whether you are current or over 6 months delinquent and can include more debt types.  In addition to credit cards and personal loans, we can include medical bills, payday loans, and most other debts with no collateral attached.  We do not assist with secured debt such as a vehicle loan or mortgage unless you no longer possess the collateral.  The Department Of Education typically secures student loans, but we can assist with some private student loans.

National Debt Relief companies will typically use a “cookie-cutter” program for the various states they do business in.  They may not take advantage of the additional consumer protection laws in the Texas Finance Code that are afforded to Texas residents.  Also, by serving our home state, we keep our overhead low and charge settlement fees 20 to 40 percent lower than most other companies.  We have found that some companies are doing business illegally in Texas because they are not registered with the Texas Office of Consumer Credit Commissioner.  Some also charge high fees, which may be illegal.  Research any company with the Better Business Bureau at https://bbb.org and see how long they have been in business, check their rating, accreditation, and read any complaints.

Anytime you do not make the minimum payments required, creditors can use the court system in an attempt to collect a debt.  While this still occurs in Texas, it is a less favorable method of debt collection since Texas has some of the highest consumer protection laws in the country.  For example, regular creditors such as credit card companies cannot garnish wages or take a homestead property.  If necessary, your negotiators will prioritize settlement on any particular accounts necessary to minimize litigation.  We also provide our clients with the option to utilize two different forms of legal protection while enrolled.  Through a special arrangement with whom we feel is the best debt defense attorney in Texas, the attorney offers our clients upfront legal representation to provide three substantial benefits that we have never seen offered by any competitor.  The benefits include:

  1. The debt defense attorney will actively attempt to prevent lawsuits with your creditors while your accounts are negotiated and settled.
  2. If necessary, the debt defense attorney will defend a lawsuit for you at no additional charge.
  3. It is illegal for debt collectors to call you in Texas after the attorney notifies your creditors of your legal representation.

The second option is a very low-cost pre-paid legal plan similar to what most of our competitors offer.  This plan does not provide any upfront legal services but will cover the cost of an attorney to represent you if any of your enrolled creditors file a lawsuit.  Our settlement fees are 20 to 40 percent lower than most competitors, making it much easier for our clients to utilize either form of legal protection by keeping your overall cost low.  Any legal protection is entirely optional, and the provider collects any applicable fees.

Generally, you should include all unsecured accounts over $1,000 to help ensure that you get the lowest possible settlements.  While in a hardship program, it can complicate negotiations if your creditors see that you are paying some and not others.  Accounts under $1,000 can be left out, but you should not increase your balance to over $1,000 while enrolled.  Your Texas Debt Specialist will discuss other circumstances when accounts over $1,000 may be left out.  Many of our clients have a program payment that is less than half compared to minimum payments, so it is easy to build plenty of funds on a debit card instead of continuing to rely on credit cards and paying high interest charges.

Your funds are held in your FDIC special-purpose custodial account to fund settlements and pay our settlement fees.  Settlement fees are only charged after you approve a settlement with a creditor, and at least one payment has been made towards the settlement.  The fees charged are proportionate to the enrolled balance of the account settled.

A creditor could send you 1099-C for the amount of debt forgiven which may be considered taxable income.  Fortunately, filing IRS Form 982 may exempt you from owing any taxes on debt that has been forgiven.  According to IRS.gov “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.”  If you receive a 1099-C we recommend speaking with your tax advisor as we do not provide tax services.

Some interest and possibly late fees for a few months will be added to your balances before settlement.  While we factor this in our original estimation upon enrollment, we only charge performance fees based upon your enrolled balance.  Keep in mind that the interest accrues whether you make minimum payments or not.  Your balances might not increase if your accounts have already been delinquent for a few months.

Some people like to fix their own vehicles, prepare their own taxes, or repair their own homes.  Most people let professionals do it for them.  Dealing with professional debt collectors can be very stressful for the untrained individual.  If a settlement is not structured correctly, the debt collector may come after you for the full balance down the road.  In many cases, our professional negotiators will obtain better discounts without the headache of dealing with debt collectors.  Creditors and collection agencies usually have special departments to make arrangements with skilled negotiators, while the collection agents who contact consumers directly are trained to extract the maximum amount of money possible.  Professional debt collectors are usually paid a commission based on how much they collect from you.

If you are currently paying your debts when you enroll, negotiations may not begin for 6 months, as this is about when creditors start offering the highest discounts.  If you are already several months delinquent upon enrollment, negotiations may begin once your first deposit is made into your special purpose account.

This is highly dependent on which program you use and how fast you can afford to get through the program.  Generally, a credit counseling program will take about 5 years to complete.  Some clients have been able to complete our debt negotiation programs in less than 6 months since balances are negotiated for much less than what is owed, but most programs are estimated somewhere between 24 to 48 months.  The longest programs are estimated at about 60 months if a very low monthly program payment is needed.  By only making the minimum payments, it could take 10 or 20 years or more to pay off the debt, although your minimum payments will slowly decrease if you do not charge any more on the accounts.  Making minimum payments might cost you 3 or 4 times as much as you originally borrowed.

Bankruptcy is an embarrassing public record potentially for the rest of your life.  Bankruptcy can be easily found on background checks long after it falls off your credit report.  In some cases, it could affect your current or future employment and certain types of state licensing.  As Texans, we know most Texans would prefer to avoid bankruptcy when there is another affordable option.  When the bankruptcy laws changed, income and assets prevent many people from filing a chapter 7.  When chapter 7 is not available, a chapter 13 repayment plan is usually the only other bankruptcy option.  The bankruptcy court determines how much you will pay back your creditors in chapter 13.  Chapter 13 may be more expensive or less expensive compared to our Debt Negotiation programs.  We also assist clients with an Advanced Hardship Program for those whose hardship qualifies, and they need the absolute lowest monthly cost possible without bankruptcy.  Debt Redemption is not a law firm and does not provide legal advice.  We may be able to refer you to Texas attorneys who provide bankruptcy and other legal services.