Frequently Asked Questions about Debt Elimination
To Reach an Angel just call 210-979-9447

What is Debt Settlement?

Debt Settlement is when a consumer hires a professional negotiation company like Debt Free Angels to settle their debt. Debt Free Angels drives your creditors down so that you save 60% on the unsecured debt that you owe at the time of enrollment.
Once this reduced debt is paid the creditor accepts this reduced payment as PAID IN FULL and there is no future expectation of any additional money. You will receive a Settlement Letter in the mail stating the debt is PAID IN FULL for your records as well.

Debt Free Angels adds two special aspects to our Debt Settlement program that are completely unique from our industry:

1. We legally stop the creditors from harassing you at home, work, friends and family.

2. We work to rebuild or establish good credit for you throughout the program by updating the credit bureaus when you have paid off each of your creditors so that your credit report reflects a positive “zero balance” which improves your credit score.

Debt Settlement Example: If you owed $20,000, Debt Free Angels would negotiate it down to only $8,000 so you would save 12,000. Over the next 36 months you would pay yourself $305 dollars a month into a savings account so that your debt would be paid off in full as each settlement is reached. Each Client approves every settlement offer before money goes to the creditor and Debt Free Angels only earns our fees if we are able to successfully negotiate below 60% or more on all your debt combined.

What Qualifies me for Debt Settlement?

Debt Free Angels is here to help people who got into debt through no fault of their own or are public servants that need a helping hand.
If you are able to pay your creditors off we encourage to do so immediately. If you are unable to pay your creditors then debt settlement may be the right solution for you to get back on track quickly.

Debt Free Angels definition of hardship: You are qualified to be in hardship if you are unable to pay off ALL your unsecured debt within a 6 month period.

To qualify, you must have been in a hardship or be a civil servant/military in the past three years:
• Divorce
• Injury or Accident
• Sickness
• Unemployed temporarily, laid off, fired, pay cut or your hours were cut
• If Self Employed/Business owner saw at least a 10% drop in your overall income
• Lost a Financial Partner
• Military, Police, Fire Fighters, Teachers/Civilians
Please call us today if you have additional questions about qualification at 210-979-9447

Where is my money? How do I know this is safe?

Debt Free Angels has an A Rating with the Better Business Bureau. We have been in business over 7 years and plan to be many more years to come but… to play devil’s advocate if we disappeared one day… your money is completely 100% safe in a FDIC insured account in your name.

Debt Free Angels has always used unique escrow/special accounts set up for the purpose of debt settlement offers. Every month your bank account is drafted by a 3rd party company that holds your money and provides monthly statements for you in the mail and also online 24/7.

Since the money is held in your name by a third party company you have the ability to withdraw your reserve fund and close your account at your discretion without penalty only paying Debt Free Angels any money owed for management fees earned as in accordance with FTC rules.

Saved money for the repayment of your bills can only be dispersed to three parties:
1. The Creditor to pay off the debt at the new low negotiated amount
2. To Debt Free Angels for our fee for settling your debt as outlined and agreed
3. Back to you, the client, at the end of the program if any remaining money left is over because the settlement totals were above the 60% goal.

What type of debt can Debt Free Angels settle?

All unsecured debt can be settled by Debt Free Angels
If the debt is in collections or at an attorney’s firm that’s okay, we can still help.

An unsecured debt is any money owed to another party that is not attached to an asset.

Examples are:
• ALL Credit Cards (business debt too)
• ALL Medical Debt over $100 per bill
• ALL Judgments * except child support or back taxes
• Old utility bills (past due)
• Business loans or lines of credit not attached to equipment
• Car loans if the car has been repossessed/totaled/returned

*We have had excellent success with settling Judgments, but due to the unique nature of these types of debt the 60% or less guarantee is void. Call for more details 210-979-9447.

What types of debt does Debt Free Angels not enroll?

• Child Support
• Tax debt
• Bankruptcy
• Secured Debt like the house you live in or the car you drive

How does Debt Settlement affect my credit?

While you are in the program you credit score will go down since you are not going to be paying your creditors directly and instead paying into a checking account that will be used to pay off the principals on the debt you owe at a reduced rate. It takes only 30 to 60 days after you pay off each debt for it to report “zero balanced” because you have paid your debt in full. The Zero Balance is what you are looking for so that your credit score will go up.

As the debt is settled, your credit score returns and is often much higher than when you entered the program since your debt has disappeared with the assumption that you have continued to pay your mortgage and car payments and other debts on time.

Do I have to default on my debts to settle them?

The answer is yes, you have to be in default which normally takes about 90 to 120 days and at that time the interest and penalties stop and the debt is moved to a new department that can negotiate settlements with us or sold/transferred to a collection agency that can negotiate settlements with us.

Debt Free Angels does not recommend that you do not pay your creditors if you are able to pay them off in a timely manner. But if you are in a hardship or a public servant and cannot afford to pay your debt off within a six month period and you have already missed payments in the past 12 months or realize you won’t be able to pay them in the future… Debt Free Angels debt settlement program is worth considering as the cheapest and quickest alternative to eliminating the debt and moving forward to rebuild your credit and your financial future.

How long will it take to get out of debt?

This varies from person to person depending on the debt that they have and their budget. Depending on their monthly payments, it could take a few months. A typical program usually takes 6-36 months, and as soon as the client has raised at least 40% of the money needed to settle a debt, we start negotiating that settlement.


How is Debt Settlement different than Bankruptcy?

How is Debt Settlement different from Credit Counseling?

How is Debt Settlement different than Consolidated Loans?

With a consolidated loan you are taking out a loan for 100% of the amount of money that you owe to all your creditors.
In return for this lump sum to pay all your creditors off you now owe the lender that loaned you the money monthly interest on the new single payment. So you basically have only replaced one creditor with another creditor. If you could afford to pay the original creditors why would you think you are going to be able to pay your new creditor? Consolidated loans typically do not help people out of debt but rather it drags them further into debt.

What are the tax consequences?

Any debt settled exceeding $600 will be reported to the IRS by your creditors as income. Consult with your tax adviser for advice specific to your situation.

Can my creditors sue me?

The answer is YES. Your creditors have the right to sue you but they have no reason to if you are not challenging them that the money is owed.
As Texans we have excellent laws to protect us from our creditors.
A great resource we like to refer people to is Know Your Rights!  by Richard M. Alderman, “The People’s Lawyer.”
Here at Debt Free Angels we have heard every tall tale you can imagine and we constantly have to help our clients learn their legal rights as citizens of the great State of Texas. Sometimes creditors say they are attorneys and they are actually telemarketers calling from India or Indiana it doesn’t matter in the state of Texas you need to know you rights….
Remember we are not attorneys so this is information that should not be considered legal advice but a quick guide and directions where you can read up on the specifics and laws from a Legal Expert Richard M Alderman B.S., J.D., LL.M.
Get a copy of KNOW YOUR RIGHTS by Richard M. Alderman “The People’s Lawyer” from our Education Section of this website written by a brilliant attorney who is the Dean for academic affairs and holds the Dwight Olds Chair in Law at the University of Houston Law Center since 1990 and has written over 20 books.
#1 In Texas, Creditors can not put a lien on your house (unless the debt is for fixing up your house) by filing a Homestead Affidavit to clear your title. P. 98
#2 In Texas, Creditors cannot make you sell any assets see lists of exemptions p. 71-74
#3 In Texas, Creditors cannot garnish your wages you have made in Texas p.74
#4 In Texas, Creditors cannot make you give them your IRA savings p. 85-86
#5 In Texas, Creditors cannot arrest you p. 74

Will I still be able to use my credit cards?

No, by enrolling the cards/lines of credit you are going to be closing them so that we can start the clock on your 90 to 120 day charge off period to begin the settlement negotiations. Most people’s cards are maxed out, but if you do have available credit that is unused you will lose it when you enroll in our program.

Can I keep some credit cards out of the program and not settle them?

Yes, you can decide to keep cards out of the program if you choose.

Can I accept new credit card offers?

Yes, you can accept new credit card offers from vendors, even those that you submitted for settlement. Do not let your balances exceed 25% of the cards value so as not to negatively affect your credit score.
Often we find that soon after your debt charges off that you will start receiving PRE APPROVED offers for the same companies you just enrolled. Be very careful, they are hoping you have given up on becoming debt free and want to ensnare you into the potential of falling into more debt again. Give us a call to help coach you through what’s best for your situation and your credit 210-979-9447.

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