Ask The Get Out of Debt Experts Debt Settlement

I’m Thinking of Using Impact Debt Relief or Freedom Debt Relief. – Bob

“Dear Steve,

I’m self employed with about $70,000.00 in credit card debt a large a large part of which came about from marketing expenses over a period of years.

I have been in contact with two companies, Impact Debt Relief and Freedom Debt Relief and have discussed their debt reduction programs with each.

Impact quoted a 10 percent fee (they later offered a reduction to 8 percent) and Freedom 15 percent (un-negotiable) that, as I understand it from Freedom’s explanation, accumulates from monthly I’d make into an account used first to cover their fee and then to begin one by one, starting with the smallest, paying off each of my accounts after they have been negotiated down to as low as 40 per cent of the original balance.

I also spoke to one of my credit card companies, BOA, who said they have a program where they will work with my other creditors to coordinate/manage and resolve my debt. After going through my finances with the gentleman from BoA, however, he said that currently I have a shortfall of approx. $1600.00 a month and would not qualify for that program.

While, due the cyclical nature of my business, I do anticipate and am already seeing an upswing that I think will resolve the shortfall, I don’t know any of these programs are viable.

Do you know anything about the legitimacy of either of the debt reduction companies I’ve mentioned or of programs like the one BoA mentioned or, if any or none of them is advisable for someone in my situation, are there any programs you know of that actually are?


Dear Bob,

As of October 27, 2010 it will be illegal for debt settlement companies to charge you any advance fee before actually settling your debts. In addition, by September 27, 2010 debt settlement companies will not be able to make unsupported claims to induce you into buying their services. These claims would include statements of debt reduction without giving you a good faith estimate of their actual performance.

READ  Freedom Debt Relief - Consumer Complaint - May 9, 2019

It’s interesting to note that Freedom Debt Relief recently issued a press release supporting these changes, here, in which they said the CEO of Freedom Debt Relief, Andrew Houser, said, “..we believe there is more good in this rule than bad, and are looking forward to the positive changes it will bring to our industry.”

But based on your question both debt settlement companies appear to want to still charge you fees in advance for their services. If you decide that you do want to use their services I would suggest you wait until after September 27, 2010 or ask them for a performance based contract for services now.

The Bank of America program, if it included your other cards, was probably a standard debt management program. It does concern me that you are that negative each month on your cash flow. That indicates to me your current income is way below the minimum payments your creditors are expecting.

Enrolling in a debt settlement program may sound “wonderful” with creditors reducing your debt and all that but you need to know some things.

In a debt settlementt program:

  • when you stop paying your creditors your credit is damaged;
  • when you stop paying your creditors you will wind up in collections;
  • the debt settlement company can’t make the collection calls stop;
  • once you’ve defaulted on your debt you can be sued;
  • the lawsuit will show on your credit report;
  • following that you could have a judgment issued against you; and
  • you may subsequently have your wages garnished.

In order to make the best decision possible for you based on reality and your specific situation you may want to contact Damon Day for an extended consultation and click here to find a local bankruptcy attorney to learn more about what bankruptcy would mean for you.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

READ  Did Freedom Debt Relief Mislead Us?

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • Hey John B,
    I was wondering when I would get my daily personal attack from a debt settlement sales person. Looks like you get the prize. I have certainly noticed an increase now that most of them are going out of business shortly. I guess they need someone to blame and it might as well be me 🙂

    I am very open about the fact that I owe back taxes to the IRS, I talk about it on my website and I will discuss it with any of my clients that care to know. I find it interesting that you jump to the conclusion that I can’t help people because I owe the IRS money when you clearly don’t know the reasons or the circumstances as to why I owe the money. You also don’t understand what I do as you claim that I am a lead provider which I am not.

    The reason I don’t have a telephone number on my website is because I was tired of sales calls from Debt Settlement Lead providers and other people calling me up to sell me things. If you are a client of mine or in communication with me through email then you will have my phone number as it is on the signature of every email I send out. If you are not a client of mine, or have not contacted me previously in writing to let me know why you would like to speak with me, then you don’t need my phone number. Of course it isn’t a secret. My phone number is all over the web on plenty of public social media sites. Anyone could find it with a quick google search.

    As for my address, I consult from my home office. Again, I am very open about this so you haven’t uncovered any secrets. Any of my clients can have my address, but if they are not clients of mine, then I don’t feel a need to have my address plastered on my website.

    Now, instead of trying to attack me personally because you are afraid of my message, I challenge you to find any fault in the message that I bring to consumers and challenge me on what I teach. I assume you couldn’t find anything that I say that was incorrect and thus, I represent a threat to your ability to sell whatever it is that you sell. Consumers are smart enough to know that when the attacks get personal, than I must have something that they should check out.

    I recommend you take some time to read and listen to all of the testimonies from my actual clients that have spoken with me, and you will get a better understanding of what I do. Make sure to set aside at least an hour because it will take you that long to get through all of them. I will let my work speak for itself and my clients attest to the value they found in speaking with me.

    I always tell consumers to call as many debt help sales people as they wish, and then call me for an actual financial consultation, then they will immediately understand why these sales people feel the need to attack me personally. They won’t be able to sell their over priced one sized fits all solution to a consumer that has spoken with me and then has a step by step strategy tailored for their circumstances, usually not involving the need to buy what these guys are selling for thousands of dollars.

    John, if you are open to discussing actual issues, or you feel that anything I am teaching consumers on my blog is not correct, I am open to having that discussion. If you want to keep attacking me personally, then you are free to do that as well. That just further helps my message reach consumers that are looking for real, straight forward information and would certainly be curious to know why debt settlement sales people are attacking me in droves.

    Things that make you go hmmmmmm.

  • Damon Day is an exceptional debt coach. If you want to read why I recommend Damon Day and listen to an interview with him, click here.

    Damon does have a tax lien and he openly talks about it on his site at this link.


  • All of the questions are real. You can read on the site why on the ONE question I honored the wishes of the requester and changed the name. Big deal. What’s it matter anyway? How does anyone know if people give their real names when they leave a question. It’s not the name that’s important. Is your name really Jane Tuston?


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