- How long can I expect to be enrolled in the DRO Reduction Plan?
- What about secured versus unsecured debt?
- Are there debts that can't be negotiated?
- Am I eligible for your program?
- How much does it cost and how does DRO make its money?
- Will I truly be debt free when the program ends?
- What if a current or former spouse is listed on one or more of my accounts? Must he or she be included in the settlement process?
- What about my credit score?
- Can I use my credit cards during the settlement process?
- What about the future? Will it be possible to get credit cards, a loan or a mortgage?
- Does DRO provide credit repair services?
- Why can't I negotiate my own debts?
- Are debt consolidation and debt settlement the same thing?
- What should I know about bankruptcy?
- Will collectors still call and harass me during the DRO program?
- What happens if I miss my settlement payment?
How long can I expect to be enrolled in the DRO Reduction Plan?
The length of the DRO Debt Reduction plan is determined primarily by how much money
you pay into your settlement account each month. Although not required, you can
shorten the program’s timeline by making additional payments above and beyond your
monthly commitment. Based on your circumstances and budget, a Debt Reduction Specialist
will help you arrive at an affordable payment.
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What about secured versus unsecured debt?
Secured debt refers to debt for which another asset serves as collateral. Common
examples of secured debt include car loans, a home equity loan or credit cards that
are secured through a bank account. In the case of secured debt, creditors can resort
to selling the underlying asset to achieve full repayment of the debt. DRO is only
able to negotiate unsecured debt as part of a settlement program. In some cases,
for example, an outstanding car loan balance remaining after the car is repossessed,
secured debt can be converted to unsecured debt and may become negotiable. DRO routinely
negotiates agreements on credit card debt, personal loans and outstanding medical
bills. Tax debt is only occasionally forgiven. Student loans are forgiven only in
cases of exceptional financial hardship.
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Are there debts that can't be negotiated?
DRO cannot negotiate mortgage debts or any debt secured by a bank account, securities account or a loan on a recreational vehicle or boat.
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Am I eligible for your program?
To be eligible, your unsecured debts must equal or exceed $10,000 and you must earn
enough each month to settle the debt through regular monthly payments. Clients often
discover that their monthly debt settlement payment is less than the monthly payments
they currently make. You must also have a strong desire to become debt free and
demonstrate a fundamental understanding of the DRO debt reduction plan.
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How much does it cost and how does DRO make its money?
DRO charges a flat fee determined by how much debt you enroll in our debt reduction
plan. A small monthly fee is also levied for bank account maintenance. Complete
details about the reduction plan are available by calling 1-800-374-1088.
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Will I truly be debt free when the program ends?
Credit reporting agencies will mark all accounts enrolled in our program as “settled” with no outstanding balance, leaving you completely debt free!
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What if a current or former spouse is listed on one or more of my accounts? Must he or she be included in the settlement process?
Generally, creditors will decline to free either a current or former spouse from
the account and will even exclude the spouse enrolling into the debt reduction plan.
In some cases, however, we may be able to enroll only one spouse. To learn more
about your specific situation, contact our debt specialists at 1-800-374-1088.
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What about my credit score?
DRO’s debt reduction plan will affect your credit score in several ways. As mentioned
earlier, credit reporting agencies will report all of your accounts enrolled in
the program as “settled” with no outstanding balance, releasing you from all further
obligations. Several other factors will also influence your global credit score,
making it important to think about the long-term impact of the debt reduction plan
and debt help options available to you. In the short term, for example, the debt settlement process process may negatively impact your payment history. However, the impact
may be negligible if you’ve been late in making recent payments. Nevertheless, settlement
usually has a positive impact on another component that makes up your credit score:
the amount owed. By the time the settlement process ends, clients sometimes see
their credit score improve because they now have fewer debts or no outstanding debts
at all.
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Can I use my credit cards during the settlement process?
DRO strongly recommends that clients enroll all of their unsecured debt in the negotiation
process. We also recommend the use of debit cards instead of credit cards. Clients
are sometimes allowed a low-limit credit card to deal with emergencies, but using
such a card can seriously undercut the negotiation process. Obviously, creditors
may be unwilling to settle for less than the full amount owed if they discover a
client has a current credit card account.
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What about the future? Will it be possible to get credit cards, a loan or a mortgage?
Clients who ask these questions are usually ideal candidates for our program because
of their commitment to reclaiming their financial future. Once you complete our
program, you’ll have two characteristics considered important by many creditors:
the ability to pay your debts and a minimum number of other commitments. You may
still need to shop your interest in new credit to several banks or financial institutions,
but this process will be made easier by our post-program referral service to companies
that offer consumer credit counseling and help with re-establishing your credit.
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Does DRO provide credit repair services?
The removal of out-of-date entries in your credit history is the only truly legitimate
form of credit repair. DRO not only protects client interests during every phase
of the settlement process, we also promise truthful reporting about any and all
debts we settle.
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Why can't I negotiate my own debts?
You actually can negotiate your own debts! But in the long run, it pays to have
an expert do the job, just as it usually pays to have an expert sell your house,
repair your car, or fix a stubborn leaky faucet. At DRO, we’re experts in a specific
type of negotiation called debt negotiation. We’re on intimate terms with the collection
cycles, internal policies and Federal and State laws that drive the credit and collection
industries. Most importantly, the credit and collection industries know us! Even
though the credit industry is an expert at getting people to pay their debts, their
tactics don’t work on us. As a result, entry-level negotiations start at a much
lower point than is typically the case when the industry negotiates with people
like you. And even though DRO is a fee-for-service company, overall costs for our
clients are lower than they can reasonably expect to negotiate for themselves. And
forget about taking those harassing calls from creditors, at DRO, that’s our job!
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Are debt consolidation and debt settlement the same thing?
Definitely not! A debt consolidation program rolls all of your existing debt into
one new debt. This new debt either has a significantly higher interest rate or uses
your home as collateral. Using your home to secure this kind of debt converts your
unsecured debt into secured debt, surrendering the home equity you’ve worked so
hard to build. Instead of providing true debt relief, these programs generally create
more debt and have a very different goal than a debt relief program. For example,
debt consolidators often receive compensation from the client as well as the lender
who issues or services the loan — something the client may know nothing about.
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What should I know about bankruptcy?
DRO firmly believes debt reduction to be a much better alternative than bankruptcy.
Bankruptcy should be the last resort because of its potentially crippling effect
on your long-term financial future. Most people have already heard about the two
types of bankruptcy, called Chapter 13 and Chapter 7. These differ in terms of their
financial impact on your debt freedom, the obligations you must continue to meet,
and the assets they may cause you to lose, including your home. From a financial
and psychological standpoint, both types of bankruptcy have ruinous implications.
That’s why we strongly advise against filing for bankruptcy before considering DRO’s
outstanding debt reduction. Click here to learn more about bankruptcy.
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Will collectors still call and harass me during the DRO program?
DRO makes every effort to stop creditor harassment. After all, we want them to talk
to us and not you. While the law stipulates that creditors must stop if you instruct
them to no longer write or call, DRO cannot stop creditors who operate outside the
law. However, we do have specific strategies to discourage further contact with
you. You should also be aware that a creditor may give your account to a collection
agency and that this agency can legally contact you, either in writing or by phone,
to inform you of this change. Here, too, DRO will leave no stone unturned in our
efforts to engage them in a meaningful conversation with us, instead of harassing
you.
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What happens if I miss my settlement payment?
As a DRO client, you should take your monthly settlement payment just as seriously
as paying your rent or mortgage. That being said, DRO realizes that emergencies
may occur that take precedence over debt management payments. Our policy is to continue
working with clients who miss payments for legitimate reasons, providing they show
a serious long-term commitment to our settlement programs.
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