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Debt Consolidation in Texas Frequently Asked Questions

Get answers to our most common questions about Debt Consolidation and Debt Relief in Texas.

Why should I choose Affordable Debt Consolidation in Texas?
  1. Affordable Debt Consolidation is Texas-based and exclusively serves Texans. Our debt negotiation service is typically 25 to 40% LESS compared to out-of-state companies, and we also guarantee the lowest negotiation fees.  See the following FAQ for more details.
  2. We are 100% veteran-owned, Rated A+ and Accredited with the Better Business Bureau, and have been serving Texans for two decades. Please read all our BBB complaints by clicking here: BBB for Debt Redemption Inc. DBA Affordable Debt Consolidation
  3. We provide multiple options, including an affiliate platform to shop for the best debt consolidation loan, credit counseling resources, debt negotiation to resolve debt without bankruptcy, and, if necessary, referrals to a highly rated Texas bankruptcy law firm.
  4. We can assist Texans who may have reached the point they are facing lawsuits from their creditors.
Do you guarantee the lowest fees?

Yes!  We offer this with our debt negotiation programs provided exclusively to Texans.  Typical industry negotiation/settlement fees are between 20% to 25%.  As a Texas company focused on resolving debt for Texas residents, we can keep our overhead low and offer negotiation services at a flat fee of 15%.  Our fees are not charged until an account is settled and payment has been made towards the settlement.  You must be qualified for our services a.  The competitor must be registered in Texas with the Office of Consumer Credit Commissioner as required by law and have a rating of “A-” or higher with the Better Business Bureau.  After receiving verification of the competing offer, we will provide our negotiation services at a lower fee than our competitor or provide you with a $1,000 gift Visa card.  This guarantee only applies to our settlement services and does not apply to any optional third-party services.  Contact our Texas Debt Specialists for more information.

When should I seek help with my debt?

Contact us if you have high levels of credit card debt or personal loans that have become burdensome or if you are facing financial hardship from high-interest rates,  income loss, medical expenses, or divorce.  Our programs could be a great option if you are barely keeping up with your minimum payments and the balances keep growing.  If you have no savings, investments, or retirement and your extra money is lost to high-interest debt month after month, talk to one of our Texas Debt Specialists to learn about your options.  Our programs can also help if you are delinquent and your creditors are using collection agencies or attorneys to collect.  If a lawsuit has or may be filed by one of your creditors, we have special Texas-based resources to help you.  Learn your options to resolve debt as quickly and affordably as possible without bankruptcy.

What services do you provide to resolve debt?

Our Texas Debt Specialists assist Texans with multiple programs our company offers and by our highly rated partners.  Credit counseling is one option available to lower interest rates with most credit cards.  Debt relief using debt settlement to negotiate significant reductions in the amount you pay back to your creditors is another option.  Either option will allow you to consolidate debt with one monthly program amount.  We also assist Texans with an exclusive Advanced Hardship Program for those who meet the financial hardship criteria.

Do you offer Debt Consolidation Loans?

In addition to our debt relief services, we offer a platform to shop multiple lenders who provide debt consolidation loans to Texans.  Affordable Debt Consolidation is not a lender.  However, by shopping with numerous lenders, you will increase your chances of qualifying and finding the best interest rate.  There is no fee to use our affiliate platform to shop lenders, and it will not impact your FICO score to receive offers from the lenders.

When should I consider a Debt Relief program over a Debt Consolidation Loan?

If your credit score and debt-to-income ratio are sufficient, a debt consolidation loan could lower your interest, monthly payments, and the time it takes you to pay off your debt.  Applying for this type of loan should be the first step for many people.  If your credit scores and debt-to-income ratios are not excellent, qualifying for a low-interest debt consolidation loan will be challenging with any lender, especially today with inflation and international conflicts.  Even with good credit scores, transferring debt from one lender to another is not likely to solve your debt problem if you struggle to pay your debts.  After discussing your financial situation, we may also offer free advice on how to increase your chances of qualifying for a debt consolidation loan.  Fortunately, our debt management and debt relief programs are designed to resolve your debt without the need for new loans.  In many cases, the program payments are less than half compared to making high-interest credit card minimum payments.  The other advantage is resolving debt in an estimated time frame of as little as 24 to 48 months.  

How much will my monthly payment be?

That depends on how much you owe, your creditors, which option you use, and how much you can afford each month.  Any option is likely to have the opportunity of a much lower monthly cost compared to making minimum payments.  Debt negotiation programs often have program payments of less than half compared to the monthly cost of minimum payments.

How does Debt Negotiation affect my credit rating?

Anytime you do not make the payments you agreed to make with your creditors, your credit rating will be negatively impacted whether enrolling in a program or not.  If your credit lines are at or near their credit limits, it negatively affects your credit score.  Our Debt Specialists can evaluate your credit score and debt amount by obtaining your credit report using a soft pull that has no impact on your credit rating, and this service is free of charge.  Our goal with debt negotiation is to resolve your debt as fast as possible by obtaining forgiveness of a large portion of your balances.  This can be a great alternative to a very damaging bankruptcy and, in some cases, is less expensive compared to chapter 13 bankruptcy.  

Once you have eliminated your debt, you can rebuild your credit relatively quickly.  Also, by not carrying the unsecured debt, your debt-to-income ratio will be dramatically improved, which will improve your overall financial profile.  Many of our clients who fell behind before enrollment will have much better credit scores when they graduate compared to when they started because they no longer owe the overwhelming debt.  The reality is that a good credit score is practically useless if you cannot afford to take on the payments of additional debt.  You can get a good credit score back, but you cannot get back the money thrown away to high-interest charges month over month and year after year.  Furthermore, you cannot get back the lost opportunity if you had invested the money instead of thrown it away to high interest.  Affordable Debt Consolidation is not a “credit repair” company.  Our debt relief clients are provided copies of all creditor settlement letters reflecting a zero balance owed.  These letters can be used to update the credit reports free of charge if needed.

Do you accept creditor lawsuits?

Yes!  We often accept creditor lawsuits by utilizing our exclusive partnership with who we feel is the best debt defense attorney in the state of Texas.  We understand money is tight, so we have an exceptional arrangement with the top Texas debt defense law firm that allows our clients to receive high-quality legal services affordably.  We have found most other Debt Relief companies will not enroll any lawsuits in their programs.  Many of our clients are resolving lawsuits and other debts with a very affordable monthly program payment.

Will I receive collection calls from creditors or debt collectors?

If you utilize a debt consolidation loan or credit counseling program, you should not have collection calls as long as you make on-time payments.  With debt negotiation, our debt negotiators alone are unable to prevent debt collectors from trying to call you directly.  However, we provide an option to not receive collection calls while your debts are negotiated and settled.  Texas has consumer protection laws in the Texas Finance Code separate from federal laws such as the FDCPA.  When utilized, Texas law makes it illegal for debt collectors to contact you directly if you hire an attorney in addition to our services.  Therefore, our clients have the opportunity to use optional separate legal services made by an exceptional arrangement with who we feel is the best debt defense attorney in Texas.  While utilizing the legal services, the creditors will only be authorized to contact the attorney or our settlement representatives.   

Our settlement fees are much lower than typical out-of-state debt relief companies.  Therefore you can include the optional and separate legal services while likely keeping your combined cost roughly comparable and sometimes less expensive than out-of-state competitors who cannot offer the additional legal protections.  We do not know of any other Texas-based debt relief company or out-of-state debt relief company with the resources to provide this optional high level of protection.  Other companies may offer a “pre-paid legal” type of insurance that provides benefits, but this type of insurance cannot prevent collection calls.  We have a very affordable legal insurance option if you are willing to deal with collection calls during the program, especially during the first few months.  If you do not utilize the optional legal representation, we will try to minimize creditor calls as much as possible.  But keep in mind most creditors or debt collectors will continue to call until a settlement agreement is in place with the creditor or debt collector.   

If I use Credit Counseling, how much will my interest rates be reduced?

This will depend on the creditors you owe.  Interest rate reductions down to 6 to 11 percent are common with most credit card debt, but many personal loans, including payday loans, are not eligible.  Credit counseling has a massive benefit if you are currently paying very high interest with your credit cards.  If your credit card interest rates are already low or you have low-interest rate installment loans, the benefit of credit counseling may not be significant.  Debt settlement may be a better non-bankruptcy option if you struggle to make payments on accounts that currently have reasonable interest rates.  Bankruptcy chapters 7 and 13 are other options.

Do you guarantee you will settle all of my debts for a certain percentage?

No one can, and it is illegal to make such promises.  We have nearly two decades of experience, so after reviewing your creditors, we design your program with a realistic good-faith estimate, factoring you’re the individual creditor you owe.   Also, we only collect our negotiation fees after we have successfully settled a debt with your approval and payment has been made towards the reduced balance.  We have found many other companies make it a practice of over-promising and under-delivering.  Our goal is to be more conservative with our estimates.  We prefer our programs to take less time than estimated as much as possible, although some clients will be enrolled longer than estimated.  Texas residents often contact us upset after utilizing an out-of-state competitor after realizing the competitor quoted unrealistic estimates to sign them up for their services.  One of the largest out-of-state Debt Relief companies was sued by the federal government and several state governments for repeatedly misleading their clients.  Our company will not give you an unrealistic estimation to get your business in bad faith.  Contact us if you want an honest assessment.  We will always work hard to obtain the best deal possible with your creditors.

How much do your services cost?

Consultations are free with no obligation.  Our credit counseling partner will typically charge a monthly fee ranging from $35 to $50 a month.  Debt negotiation clients pay our company no fees until a debt is negotiated and settled.  All fees charged by us are included in the affordable monthly program amount that we quote you.  This amount (including fees) is often less than half compared to making minimum payments.  Our settlement fees are a flat 15% of your enrolled debt spread throughout the program as our debts are settled.  Most debt relief companies charge 20 to 25% of your enrolled debt, and some may have increased their fees beyond 25% due to inflation and labor shortages.   Our fees do not include any optional third-party fees.  A third-party Texas law firm administers the Advanced Hardship Program, which is only available to Texans who meet specific hardship qualifications of a Texas law firm and as an alternative to Chapter 7 bankruptcy.

What is Debt Settlement?

Debt settlement is a form of debt relief, also referred to as debt resolution, debt negotiation, and sometimes debt arbitration.  This method resolves your unsecured debt by negotiating with creditors to reduce the amount you owe.  Your success is highly dependent on the quality of services you receive which varies greatly by the company you choose.  Since Affordable Debt Consolidation provides debt relief exclusively to Texans, our goal is to do it much better and much less expensive than other companies.  Typically our negotiation fees are 20 to 40% less.

To be successful, you stop paying your creditors monthly and start saving money in a special purpose account.  Once enough money is saved, a new payoff is negotiated for the lowest amount possible, and funds are transferred from this special account to pay the settlement.  This process repeats until all debts are resolved with a zero balance.

What is Credit Counseling?

Credit counseling is a form of debt management where you pay back the full balances with lower interest rates if you are paying high-interest credit cards.  It also allows you to make one monthly payment without a new loan.  Credit counseling can be very helpful l if you have high credit card interest rates and are current with payments or less than six months delinquent.  If you are over six months delinquent, or if your debt consists of high-interest personal loans, debt negotiation or another option may be a better or necessary approach.

What types of debts are eligible for Debt Negotiation?

This service can help with most unsecured debt, including credit cards, installment loans, medical bills, department store cards, payday loans, and personal loans.  These programs assist with loans that are not attached to collateral (auto loans and home loans, for example) unless the collateral has been or will soon be repossessed.   We do not assist with the department of education student loans because they are backed by the federal government.  Unfortunately, we do not know any reputable company that can help with federal student loans, but free assistance is available at studentaid.gov.   We can help with some private student loans and business debts on a case-by-case basis.

Why should I use a Texas-based company focused on resolving debt only for Texans?

Many Texans turn to us because they typically save 20 to 40% on negotiation fees with us compared to other companies.  Texas also has special consumer protection laws, and as a company focused on resolving debt for Texas residents, we know how to utilize these laws to your advantage.  Texas also has fee caps that many out-of-state companies do not follow and overcharge Texans.  Our fees are significantly below the cap.  Also, any debt relief or debt management company doing business in Texas must be licensed.  There are many requirements for a company to be approved by registering with the Texas Office of Consumer Credit Commissioner.  Also, check the Better Business Bureau at bbb.org to research their accreditation, rating, complaints, and how long they have been in business.  Debt relief companies should provide a realistic timeframe and estimate your potential savings.   Federal law prevents debt relief companies from charging their fees until after a debt has been settled and payment is made towards the settled balance.  

Can a creditor file a lawsuit while I am in a Debt Negotiation program?

Your accounts will go past due in a settlement program or continue past due if you are past due upon enrollment until they are settled.   A past owing status demonstrates financial hardship and is when creditors will offer significant reductions of your balances.  Also, banks cannot just offer a discounted balance if someone is paying on time due to regulations and protecting shareholders from reduced profits.  A creditor can choose to use a law firm and the court system in an attempt to collect any past due debt.  Being a Texas resident is very helpful because consumer protection laws are better than in most other states.  Creditors know they might not be able to collect a Texas judgment.  We have extensive experience with Texas collection attorneys and are prepared to handle these collection methods.  Many of our clients utilize affordable optional legal protection with whom we feel is the top debt defense attorney in Texas.  This attorney has received many awards for his skills in this field.  The highly-rated debt defense attorney is not available as an optional service by any other debt relief company.  By having the top-rated debt defense attorney retained upfront, creditors are less likely to file a lawsuit once they are notified of your legal representation.  In addition, the attorney will take additional actions to try to prevent a lawsuit, and the attorney will also provide legal representation if a lawsuit still occurs.  You will not have to appear in court in the event a creditor lawsuit occurs.

Most of our competitors offer an inferior “pre-paid legal” type product similar to an insurance policy that will pay for an attorney for legal services only after a creditor files a lawsuit.  With these inferior “pre-paid legal” products, no attorney is actively trying to prevent lawsuits from the start.  You also have no idea who your attorney will be or their qualifications until after a lawsuit occurs.  Some of these “pre-paid legal” products do not guarantee they will find an attorney to take your case.  While most of our clients prefer the added security of a top-rated Texas debt defense attorney retained upfront, we can also offer a quality “pre-paid legal” option at a very low cost.  Either third-party service is entirely optional and does not impact our negotiation fees.

Do I need to include all of my credit cards in your Debt Negotiation program?

You may keep out an account with a balance under $1,000 if you keep it under $1,000 while enrolled.  You may also keep out any account you can pay down and keep under $1,000 within six months.  Your Texas Debt Specialist will discuss any exceptions after reviewing your creditors.  Generally, if your enrolled creditors see that you are paying some accounts and not others, it could be challenging for your negotiators to negotiate the lowest possible settlement.

Where are my funds held in the Debt Negotiation program?

We help you set up with a third-party holding company called Debt Pay Gateway.  Funds are held in your FDIC special-purpose custodial account to fund settlements and pay our fees only after successfully settling an account, and at least payment is made towards the new negotiated balance.

Will I owe taxes on my forgiven debt balances?

A creditor may send you a 1099-C for the amount of debt forgiven.  The IRS could consider forgiven debt as taxable income.  IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, 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 their income reporting to the extent that the taxpayer is insolvent.”  You may want to speak with your tax advisor if you receive a 1099-C.  In the very worst-case scenario, paying some income tax on a debt balance forgiven is trivial compared to paying high-interest rates month after month and year after year for potentially decades.

Do interest and late fees accrue on my accounts enrolled in a Debt Negotiation program?

Anytime accounts are delinquent, your creditors will continue to add interest and possibly late fees onto your balances.  We factor that your balances will increase some until settlements are reached.  While we factor this upfront in our estimations, we only charge settlement fees based upon your enrolled balance.  Keep in mind that the interest will continue to accrue on your debt regardless of whether you make minimum payments or not.  

Can I negotiate on my own?

Yes.  And for example, can also prepare your own taxes, make repairs to your own home, and repair your own car.  Most people would rather professionals handle these tasks.  If you make a mistake during the negotiation process, the debt collector may still come after you for the full balances.  Also, dealing with professional debt collectors can be very stressful and intimidating for an untrained individual.  Aside from the time, effort, and knowledge needed, an experienced debt negotiator may obtain lower settlements.  Our negotiators often speak with separate creditor representatives who are not the same debt collectors that speak to individual customers.  Normal debt collectors are highly trained to get individual debtors to pay the most amount possible, and they usually receive a commission based on how much they can collect from you.  Our debt negotiators often deal in bulk and may negotiate several client accounts in one deal for extra savings.  If you would like to negotiate your debts by yourself, our Texas Debt Specialists will provide you with resources at no charge.

When do negotiations begin with my creditors?

Negotiations usually begin about six months into the program.  This will depend on how your program is structured and the payment status of your accounts upon enrollment.  Six months of delinquency is when most creditors start offering our negotiators low settlements.  Negotiations may begin sooner or later in some instances.  Each account is negotiated one at a time, and you will receive a copy of the final settlement agreement showing a zero balance after each account is resolved.

How long will it take to get out of debt?

Credit Counseling programs typically last about five years.  We usually design Debt Settlement programs estimated at somewhere between 24 to 48 months, but they can be shorter or longer depending on how much you can afford monthly.  The programs can be longer or shorter than estimated, depending on final settlement amounts.  If you only make the minimum payments on your credit cards, you could be in debt for the next 10 to 20 years.  If you only make minimum payments and don’t make any more charges on your credit cards, it could still cost you 2x, 3x, or even 4X as much as you originally borrowed.

How is Debt Negotiation different from filing Bankruptcy?

We have found most Texans consider bankruptcy as a last resort.  It will remain on your credit report for ten years after chapter 7 is discharged and seven years after a 3 to 5-year chapter 13 repayment plan is completed.  Bankruptcy may affect your qualification for employment, certain types of state licensing, insurance, as well as qualifying to rent a home or apartment.  Bankruptcy is also a public record that could be found during background checks for the rest of your life.  Bankruptcy could cause a denial of credit or very high interest rates for several years.  Since bankruptcy laws changed for chapter 7 some years back, many people will not qualify due to their income and assets.  Under chapter 13 bankruptcy, your debt payments are restructured, and you will still have to pay a percentage of the debt or the entire debt balance while still suffering the consequences of bankruptcy.  Debt negotiation is an alternative to bankruptcy and, in some cases, may cost less compared to chapter 13.  We are not a law firm, and we do not provide legal advice or bankruptcy services.  We can refer you to a highly rated Texas bankruptcy law firm with decades of experience if you would like to learn more about your bankruptcy options.

Is Affordable Debt Consolidation the same company as Debt Redemption?

Yes!  Affordable Debt Consolidation is a DBA of Debt Redemption Inc. registered with the Texas Secretary of State.  Most people searching for debt solutions on the internet use the keyword “debt consolidation.”  Often, people are unsure what type of solutions are available to them.  These could include debt consolidation loans, which is the “true” form of consolidation, but it could also include a credit counseling debt management plan which is consolidation without a new loan.  While debt negotiation is not debt consolidation in the technical sense, many people still consider it a type of consolidation since it is only necessary to make one monthly program payment even though the debts are not paid on a monthly basis.  Instead, the debts are resolved one by one in a program estimated somewhere between 24 to 48 months in most cases.

Why are your negotiation fees so much lower than other companies?

We feel that by exclusively serving our home state of Texas, we can offer debt negotiation much more efficiently than national out-of-state companies that deal with multiple states. Also, we keep our marketing costs low without the expensive national cable TV advertising or costly pay-per-click internet advertising that other companies pass to their clients in the form of much higher fees. We created Affordable Debt Consolidation primarily to reach more clients using no internet searches that do not cost our company money and result in lower fees to you. You might have seen us on the local news, on a morning show, or you may have been referred by the Better Business Bureau, but you are most likely reading this after an internet search. So if you decide to use debt negotiation to resolve your debt, take advantage of our high reputation and up to 40% lower fees compared to most other companies.

Debt Consolidation Texas, Credit Counseling Texas, and Debt Relief Texas Consultations are Free of Charge with no obligation. Affordable Debt Consolidation is not a lender but offers a platform to receive offers from participating lenders.  Credit counseling clients generally obtain an interest rate between 6% and 11%.  Debt negotiation clients who make their scheduled monthly program payments generally experience approximately a 45% reduction of their enrolled balance before fees over a 24-48 month period, not including any optional and separate services such as legal services provided by a law firm.  Our settlement fees are 15% of the enrolled balance compared to 25% charged by most competitors. Individual results vary based on the ability to fund the program, and the creditors enrolled. Statements made are examples of past performance and are not intended to guarantee that your balances will be reduced by a specific amount or that you will resolve debt within a specific time period. Settlement fees are not charged until a debt is reduced and payment has been made to the creditor. We do not assume consumer debt, make monthly payments, or provide tax or legal advice. We are not a credit repair firm. Please contact a tax professional to discuss any possible tax consequences of paying less than the total balance. Debt Relief programs are exclusively offered to Texas residents. Logos used are property of their respective owners.

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