FAQ

Q. Who qualifies for your programs?

A. Our programs are an alternative to filing bankruptcy for consumers, self-employed professionals and small businesses:

• Whose expenses exceed their net income or cash flow
• Whose liabilities exceed assets
• Whose creditors have raised interest rates and/or minimum payments to the point of default
• Who have made reasonable attempts to work directly with their creditors to no avail
• Who are already severely delinquent

Q. How will debt settlement impact my credit score?

A. Anytime you don't pay your creditors the full amount you owe them and on-time, they will put derogatory marks on your credit report. The impact on a person’s credit score is ultimately affected by their behavior before and after the debt settlement program. The reduction of the individual’s debt load, gained by the successful completion of a debt settlement program, will lead to an increased ability to handle new debt. It provides breathing space for a consumer pressed by debts. That reduced debt load may lead to an improved credit score for such a person, depending on their behavior both before and after the debt settlement program. It will also directly improve a consumer’s debt-to-income ratio, an important factor in mortgage and auto lending. Importantly, any derogatory marks on an individual’s credit record arising from debt settlement will still be better than those created by a personal bankruptcy that might be avoided by debt settlement.

Q. Who will have access to my personal and financial information?

A. We take the security of your personal and financial information very seriously. Only those associates affiliated with BlueChip Debt Relief and our processing partner having a specific purpose or function to the benefit and/or advantage of the client.

Q. Can debt settlement stop the debt collectors from calling me at home and at work?

A. If need be, a "Cease and Desist" notice can be served to debt collectors that continue to call or harass a client after the debt collector has been informed of the client’s enrollment in our debt settlement program. While most reputable debt collectors will discontinue this behavior, we cannot guarantee that all debt collectors will abide by such notice and could report them to the Federal Trade Commission (FTC).

Q. Can debt settlement improve my credit rating?

A. Our programs are designed to resolve and eventually settle the client's debt with their creditors. While our programs should improve the client's financial situation, we have no control over the credit reporting bureaus or creditors' posting practices.

Q. Can debt settlement guarantee how much my settlement amount will be for?

A. BlueChip Debt Relief prepares a program worksheet for the client to review and approve after which our processing partner will prepare a forecast and allocation for each creditor. However, we cannot guarantee what the client's creditors will do now or in the future until a settlement agreement has been reached, acknowledged, conveyed and accepted by all parties.

Q. Do you have a money back guarantee?

A. Yes. Any unearned fees received at the time of termination or withdrawal from program shall be refunded.

Q. Should I stop paying my creditors?

A. BlueChip Debt Relief can provide the client with an assessment, analysis and forecast of what might be expected if the client chooses to enroll in one of our programs to resolve and settle their debt. BlueChip Debt Relief cannot advise a client to stop paying their creditors. However, BlueChip Debt Relief can advise a client that their income is inadequate to service their debts and that they should not borrow money from existing or new creditors to pay old debts while they are insolvent.

Q. Should I file for bankruptcy instead?

A. Our programs are a less offensive alternative to bankruptcy. BlueChip Debt Relief believes that bankruptcy should be a last resort rather than a first choice for resolving and settling creditor accounts whenever possible. Bankruptcy stays on the client's records for up to 10 years and generally returns the least amount of funds to the creditor for the same or similar efforts.

Q. Can you give me information about my creditor's history of settlements?

A. Our processing partner acts as an agent of the client at the trust of the creditors and will exercise professional business ethics when working with the creditors on behalf of their clients. While they may share publicly distributed information regarding a client's creditor's policies known to them, they may not disclose confidential information regarding settlements of prior clients.

Q. Will it help to inform my creditors of the cause for my financial condition?

A. If the client wishes for us to inform creditors of the cause for their financial condition, we will review the cause and suggest to avoid the disclosure or to include it in an appropriate manner. In general, there are very few causes that creditors have not heard numerous times before.

Q. What type of forecast will be presented to my creditors?

A. The client will receive a complete assessment and forecast while each creditor will receive a forecast relative to their account, unless further requests of the creditor are made for which only previously authorized additional information of the client will be conveyed to the creditor by our processing partner.

Q. How will I know what my creditors offer or responses are?

A. Our processing partner will convey offers, responses to offers and acceptances between the client and the client creditors until a settlement agreement is reached or otherwise terminated by the parties.

Q. How does the creditor know you really represent me?

A. The client will provide our processing partner with sufficient confidential information to identify and authenticate the client to the creditor in a manner providing the creditor a level of confidence that our processing partner has established an agency relationship with the client.

Q. If I have other financial resources do I have to disclose them to the creditor?

A. Our processing partner will provide a forecast based upon the client's income and expense schedules as reported by the client, which are taken at face value and used to support proposed forecasts and programs on behalf of the client. However, a creditor may request additional documentation to support the client income as a condition for the creditor to resolve and settle the client account. The creditor is not limited to the information provided by our processing partner and may investigate possible financial resources of the client separately, for which the creditor may find cause for other actions upon such discoveries.

Q. Can you use your business leverage against my creditors?

A. Our processing partner acts as an agent of the client at the trust of the creditors and will exercise professional business ethics when working with the creditors on behalf of their clients. Any violation of that trust would defeat the beneficial objectives and advantages the client might otherwise enjoy from our very high business and professional code of conduct.

Q. OK, so you can't tell me to stop paying my creditors, what would you personally do?

A. Given a scenario or event that leaves me where I can no longer afford the necessities of life and pay my creditor loan balances, I would employ the professional services of BlueChip Debt Relief to demonstrate to my creditors that I am serious about resolving my financial condition with them but in a least offensive manner and without bankruptcy or court actions.

Q. What happens if my creditors won't or don't settle with us after your fee is paid?

A. BlueChip Debt Relief and our processing partner provide the same services to the client for the duration of the program regardless of the payment option selected by the client. Creditors handle non-performing accounts based on their individual policies and strategies. Some offer lower settlements for earlier payoffs fearing that the client may file bankruptcy. Other creditors hold out longer hoping for a larger settlement. Most tend to fall between the two and can therefore be forecasted within a reasonable estimate of what to expect overall.

Q. What if my creditors only offer settlement amounts above forecasted amounts?

A. That is possible and our processing partner will convey all such offers or responses-to-offers received from the client's creditors to the client. However, our processing partner has the client's forecast from their current financial condition by which to further convey on behalf of the client and use that information to demonstrate the limits of what the client has to work with. The only option the creditor will have is to incur more expenses through a court action, which could force the client into bankruptcy where the creditor may end up with far less if anything at all.

Q. Do you perform budget planning or credit counseling services for clients?

A. BlueChip Debt Relief and our processing partner act as an agent of the client and operate under a service agreement to resolve and settle debts specified by the client with the corresponding creditors of the client. We are not a budget planner nor do we provide credit counseling services.

Q. Do you control or direct my funds while they are accumulating?

A. No. The client's income and expenses for the necessities of life dictate the amount of funds the client has available to accumulate to settle with creditors. These settlement funds remain under the care, custody and control of the client. Our processing partner will convey final settlement agreements to the client along with any payment conditions of a creditor, which shall be performed at the direction of the client.

Q. How can you help me?

A. BlueChip Debt Relief and our processing partner, with principals having over thirty years experience working with secured and unsecured debt, will work with you and your creditors to resolve and settle your debts based on your financial capability and not on someone else's financial model. We can also redirect most of the creditor correspondence and communications to our processing partner for timely and proper responses.

Q. How do you do this for me?

A. BlueChip Debt Relief will analyze your debts and financial condition and then structure a settlement plan based on a forecast of your financial resources and capabilities, which will be submitted to you for your approval. Once you've successfully enrolled in one of our programs, our processing partner will process the documents necessary to provide proper notices to your creditors. As your accounts move through the collection process and into creditor departments authorized to settle accounts, our processing partner will convey to each creditor their apportioned allocation from your settlement plan so that they may reach settlement agreements with you.

Q. What is unsecured vs. secured debt?

A. Unsecured Debt - for these purposes shall be defined as any loan, lien or other financial obligation of a client, which IS NOT secured by real or personal property and DOES NOT have a priority position with respect to other unsecured obligations of the client. Secured Debt - for these purposes shall be defined as any loan, lien or financial obligation of the client, which IS secured by real or personal property and or DOES have a priority position with respect to other unsecured obligations of the client. NOTE: Client debts having priority by statute or court order, such as taxes and judgments, may be settled. Even the IRS is authorized to negotiate tax settlements under an "Offer in Compromise" with taxpayers.

Q. Do you have to be delinquent to qualify for our programs?

A. No! Most businesses and consumers experiencing a financial hardship from a variety of adversities know in advance that their cash or cash flow will be insufficient to satisfy their debts. Communicating early with creditors can often prevent accounts from becoming delinquent or being turned over to collection agents, whom rarely have the authority to accept anything other than a lump sum payment to settle the debt. (If clients had enough cash to pay all of their creditors in a lump sum they would probably not be experiencing a financial hardship.) While many creditor policies and regulations prevent them from settling debts in the early stage of delinquency, they can however keep the account in-house if they know there is a settlement plan for resolving and settling the debt.

Q. Will enrolling in one of your programs prevent me from obtaining credit?

A. No! However, once enrolled in one of our settlement programs, clients may only obtain new credit for allowable expenses, necessities of life or as may be used or required for the production of income, whether the client is an employee or a business.

Q. What are "allowable expenses" and "necessities of life"?

A. These include such expenses as food, clothing, shelter, transportation, utilities, insurance, medical expenses and necessary household, employment and business related expenses. In addition, clients having disabilities or medical needs may keep an open credit account with use restricted to those needs.

Q. What are "allowable expenses" used for the "production of income"?

A. These include such expenses as travel, rental cars and meals expenses for employees whose employment requires them to travel. It would also include such as the purchase of goods and services directly related to the production of income. In these cases, a client would be allowed to keep an open and current credit account with use restricted to facilitate such transactions.

Q. Can I be sued?

A. Creditors have the right to pursue a client in court to collect the full debt amount. However, creditors will often incur more expenses through a court action compared to accepting a settlement. Moreover, creditors understand that seeking legal remedies may result in a client filing bankruptcy and the creditor may end up with far less, if anything at all.

Q. Can creditors garnish my wages?

A. Depending on the state in which you live, wage garnishment may be a possibility. At present, North Carolina, Pennsylvania, South Carolina and Texas DO NOT allow wage garnishment for unsecured debt. Creditors will have to incur more expenses to obtain a judgment prior to garnishing wages. The cost to file a lawsuit to obtain a judgment is often more costly than accepting a settlement. Moreover, creditors understand that seeking legal remedies may result in a client filing bankruptcy and the creditor may end up with far less, if anything at all.

Q. What are the tax consequences?

A. The IRS considers forgiven debt as taxable income, but certain circumstances may exclude the amount of discharged debt from your taxable income. Refer to IRS Form 982 for more information and consult a tax advisor.