I had asked my contact there a few more questions:
Since my total debt savings would be about $20,000.00, or 6-7K a year,
I am guessing I would have to pay tax on that savings annually?
Not on a yearly basis once your debt is paid in full and your balances read zero on the credit report it possible the creditors 1099 you for the difference, regardless it's a loss and your savings out weighs that scenario anyway. Also,
are your fees included in my monthly payment.
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Yes fees are included in the settlement amount.
I also read that I can be sued and/or have creditors come after my wages while I am in your program. Can you please elaborate on this?
Yes, although statistically we have found this only happens to 8% of the clients enrolled in our program because they were already excessively past due. (8 months to one year past due resulting in a declining relationship between the creditor and the client prior to joining our program.)
On there website under FAQ, they had this as an explanation of what they do:
4. How will Sierra Financial Solutions settle my debts?
You will be asked to put aside and save a set amount of settlement funds on a monthly basis. This amount will be determined in your initial analysis based on total amount of debt and will be in line with your income and expense budget. Once you have accumulated enough settlement funds to make a reasonable offer to your creditors to settle the debt, Sierra Financial Solutions will begin the negotiation process. 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, we will present this offer to you. If you approve of the settlement, we will instruct the creditor to fax over the ‘settlement offer’ in writing. Then have a three way recorded conversation with you, the creditor and us to settle the account. Debts can be settled in two different ways; one lump sum or a term settlement. One lump sum is just that, one payment and the account is paid. A term settlement is a settlement which is paid over an extended period of time until the account is paid. Sierra Financial Solutions then moves through each debt until all of your debts have been paid and you are debt free. Sierra Financial Solutions strongly encourages you to read our Debt Settlement FAQ.
7. Does Debt Settlement have a negative impact on my credit?
YES. Your credit score will decline due to entering this program. How much it will decline depends on your original circumstances. Most of the accounts you place into negotiation are likely to “charge off”, which will reflect negatively on your credit. However, once this charged off debt is settled, the settlement is reported to the credit bureaus. Settled accounts are positive compared to unresolved delinquent debts or bankruptcy. After all the debts have been settled and paid, the credit score should begin to improve since the negative items have been resolved. A high credit score is desirable to have, but if you have a financial hardship and are unable to pay your debts, then your first priority should be to pay your delinquent debts and get back on your feet financially.
9. What will I pay for your services?
Sierra Financial Solutions has a 15% fee which is calculated based on the total amount of debt that an individual brings into the debt settlement program. This program requires one or two down payments then small monthly fees paid throughout the first year of the program.
All costs and fees are always fully disclosed and are you are required to sign for approval before you commit to our program.
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