Frequently Asked Questions
1. Who is qualified for our program?
Matthews Law Firm debt settlement program is for people facing HARDSHIP. This means people who are late paying their debts, have little or no ability to pay their debts in the future, and are facing a possible bankruptcy.2. Who is not qualified for our program?
Matthews Law Firm does not advocate that any person default on their debts. This program is not designed to negotiate debts for people who have reasonable means to pay off their debts. If you have the ability to pay your debts in the normal fashion, by paying the minimum payments, then you should honor your debts and do so. This program is NOT for people who are gainfully employed, have high credit ratings, and can meet monthly debt obligations.3. When does Matthews Law Firm begin settling my debt?
At such time Matthews Law Firm has received the first payment, Matthews Law Firm will commence the service. Matthews Law Firm will advise Client of all good faith offers made by creditors and debt collectors and of their acceptance of any offers. Matthews Law Firm will not settle any account without the approval of Client, who has absolute discretion to accept or reject any settlement offer. We can only settle a debt once the necessary funds are available in your settlement account.4. What correspondence from my creditors do I need to fax to Matthews Law Firm?
All correspondence, other than statements, needs to be faxed in immediately. This includes notices from Third-Party agencies, settlement offers, and information about charge-offs. Keep your statements and other communication with your Welcome Packet so that you may refer to them throughout the duration of your personal negotiation strategy.5. My creditors keep calling. How long should I expect these calls to continue?
Have you noticed that it is the same one or two people calling on an account? This is more of a call center issue. Your original creditor hires call centers and the people on the other line have no power over your account. Sometimes the quickest way to reduce this is a letter directly from you to the creditor. There may still be calls coming in, but continue screening your calls with Caller ID or an answering machine, and before you know it, you'll be ready to settle on your accounts and on schedule to being debt free.Every time you pick up the phone, they know it is a number where they can get a hold of you and they will mark that number as responsive and they will continue to call. The best way to stop the calls is to not pick up the phone if you do not recognize the number. Once your account moves to a third party agency or a different department, they will send you notice and you should fax that to us immediately.
Although your original creditor has the right to call you, they do not have the right to harass you. Customer Service has more information regarding the steps you can take in dealing with the calls if they are becoming stressful.
6. Will creditors call me at work?
Once you have informed the creditor that they are not allowed to call you at work they should not continue to do so. In fact, jeopardizing your employment with harassing calls is against the law. The quickest way to end these calls is a written request directly from you. Included in the Welcome Packet are blank letters for original creditors and third-party collectors to cease harassing calls. When creditors call you at work they need to be notified of your rights. If you don't notice a difference in a couple weeks please call Customer Service. You may also want to look into filing a complaint with the appropriate reporting agency.7. Why am I still receiving statements from the credit card companies showing interest and late fees? Shouldn't Matthews Law Firm be reducing my debt?
Creditors have the legal right to continue accruing interest, late fees, and over-limit penalties (if applicable) while your debts are in the program. A key point to understand is that the amount of money involved is less significant when compared to the total amount of money saved over the duration of the program. For example, if you start out with exactly $30,000 of debt, you would pay approximately $75,600 over a ten year period to avoid late fees and penalties, and yet you would still owe about $27,600 at the end of those ten years. Under the program, let's say the debt inflates to $36,000 during the first six months, since you may no longer be keeping up with those endless minimum monthly payments. At an average settlement of 40% to 60% on the dollar, you will pay out only about $21,800. Would you rather pay $75,600 over ten years and still owe most of the original $30,000? Or would you rather pay$21,800 over three years to become completely debt free?8. I received a settlement offer from one of my creditors, what should I do?
During the course of your Debt Settlement Program, a creditor may offer a settlement directly to you. It is very important that you understand that such direct settlement offers are a direct result of your participation in our program. You should always forward such offers to Matthews Law Firms' Customer Service Department. The decision to accept or decline any settlement offer is completely yours to make. However, you are paying us for our experience and we would like to speak with you before you make any decisions on settling an account.9. Can creditors garnish my wages?
Yes. This action would depend upon the state you reside in and your circumstances. However, this can be a long drawn out process for the creditors. The creditor has to sue you, successfully obtain a judgment, and then file for a garnishment action. If you are willing to work with your creditors then wage garnishment can normally be avoided.10. I received a notice from a law firm. Am I getting sued?
Many of the major creditors hire law firms which are collection agencies to handle the accounts. The paperwork probably says something to the effect of “This is an attempt to collect a debt” and “you have 30 days to dispute the validity of this debt.” This is very typical, but you should fax that as soon as possible. In many respects this is a good thing, once a notice is sent to the agency they will not be allowed to call you anymore.11. How should I respond to arbitration or possible litigation?
Although this is not typical during the program, accounts may be transferred to arbitration or litigation. There are several methods to respond to this kind of paperwork. If you receive this information immediately contact Matthews Law Firm's Customer Service Department. You should also be prepared to FAX that information to us at your earliest convenience. The important thing to remember is that you still have a lot of options for handling this account, and Matthews Law Firm has the ability to assist you throughout the program.12. Will this program have a negative effect on my credit?
The Debt Settlement Program will likely have a negative effect on your credit profile. When a delinquent account is settled this is reflected on your credit report. A settled account is better than an unresolved delinquent account. Your credit score should improve after successfully completing the program. Since these debts are paid, your debt-to-income ratio should improve. Debt to income ratios are not part of a credit score. However, they are an important measurement by which lenders evaluate applicants for auto and home loans. Once negotiated and settled, your creditors will report the accounts as “settled as agreed” or “balance 0”.13. Will Matthews Law Firm repair my credit?
No. Matthews Law Firm does not engage in credit repair services. Negative items will remain on your credit report according to the conditions imposed by the credit reporting agencies. The goal of our debt settlement program is to settle your delinquent accounts.14. I received a notice from the IRS regarding one of my settlements.
Financial Institutions are generally required to provide a Form 1099-C in the event that a forgiven debt amount exceeds $600.00. Please note that just because you receive a Form 1099-C showing income in the form of a cancelled debt, this does not necessarily mean that you owe tax on the forgiven portion of the debt. In fact, most Matthews Law Firm clients can legally and ethically exclude forgiveness debts from income through the “insolvency exclusion” provided by the IRS code. Briefly, this exclusion means that your liabilities exceed the fair market value of your assets, or in other words, you “owe” more than you “own.” Please refer to IRS publication 982 for more detailed information. We also strongly recommend that you consult your tax advisor regarding your particular circumstances. Should you or your tax advisor have questions regarding your account, please feel free to call Customer Service for further information. Matthews Law Firm does not provide tax advice.15. Can I still use my credit cards?
No. All credit cards in the program will not be active and you will not have credit privileges. Any cards you DO NOT put into the program should not be used. This program is for you to get out of debt. All costs and fees are always fully disclosed and you are required to sign for approval before you commit to our program.16. Can I negotiate my debts with my creditors on my own?
Yes, you can negotiate your debts with your creditors on your own. As a matter of fact if you successfully negotiate a debt it may cost you less in the long run to use this approach than to use our services. You should note however, that the Debt Settlement process can be a long and complex process for the average consumer. Our debt negotiators have the skills and knowledge of how your creditors negotiate and they have many years of experience negotiating the largest debt reductions. You don't have to spend all of the time and effort trying to negotiate with your creditors and you can rely on our experience to get the best debt reduction possible for you.17. Should I just file bankruptcy?
In our opinion, bankruptcy should only be used as a last resort and only after debt reduction remedies have been fully explored. Please note that changes in Federal Bankruptcy laws have made it more difficult for many people to completely eliminate their debts in bankruptcy, and therefore, a debt reduction program is usually a better alternative. Also, a bankruptcy filing will remain on your credit reports for at least 7 years and possibly longer.