RISK FREE can make arrangements with your lender to defer (to the end of your loan) or totally cancel some or all of your current arrearage in payments on secured debt. Sometimes these arrangements fall under the heading of “loan modification”, but there can be other types of special arrangements which are not so formal, and which do not have to comply with strict government guidelines for loan modification. The flexibility which RISK FREE offers in exploring possible solutions makes it unique among debt settlement firms. When your lender has made an offer which would bring your loan back to a current status, based on terms which have been disclosed to, and approved by you,
RISK FREE earns its modest fee. This is payable ONLY if we succeed (see F A Q #2 »).
RISK FREE only asks a modest fee, between one and three percent of your mortgage payment (or in the case of vehicle payments, between 2 and 4 monthly payments) to make lasting arrangements which rid you of
arrearages and bring you relief from the fear of repossession (Secured Debt Fees »)
Results are guaranteed!(Secured Debt Guarantee »)
Many rogue firms are out there in cyberspace or even broadcasting ads on the air touting their service” to push “loan modification” as their only brand of secured debt negotiation. Most of these firms have rigid, inflexible programs flawed by “tunnel vision”, because their schemes ONLY consider one specific, costly plan for modification. Compare RISK FREE, whose 30-year experienced negotiator proposes a number of possible solutions
to help you bring your loan to a current status, so you can save your home, building or car.
The first goal in dealing with secured debt is to have the lender negotiate a plan to bring the loan back to current status. If you are behind a number of payments
(and these days, millions of borrowers are behind by as many as 12 payments!), the best solution is to have the lender agree to plans where the arrearage is either
deferred to the end of the loan RISK FREE strives to make these arrangements for a modest fee (Link- Secured Debt How it works) and guarantees results
(Secured Debt Guarantee ») But if your lender won’t let you make these arrangements, or if you wish to walk away from the secured property, there are alternative solutions which RISK FREE can arrange, including Short Sales and Deeds in Lieu (Link – Secured Debt Alternative Solutions).
NO MATTER HOW YOU RESOLVE YOUR SECURED DEBT ISSUES, WITH NEW NEGOTIATED ARRANGEMENTS, SHORT SALE, OR BY DEED IN LIEU, RISK FREE CAN HANDLE IT FOR MODEST FEES!
As noted in the answer to FAQ #4, above, there are alternatives to simply making new arrangements to modify or liberalize an existing loan. These include Short Sales and Deeds in Lieu, which allow you to walk away from the secured property with minimum damage to your credit, minimal or fully released liability to the lender for any remaining balance.
RISK FREE can arrange your lender’s participation/approval for a modest fee.
RISK FREE understands that vehicle lenders, like mortgage bankers, would rather work out a reasonable settlement arrangement for you to keep your vehicle and pay it off, than simply take it back, dump it at auction for a distress price and then try to chase you for the deficiency balance as an unsecured debt. So RISK FREE offers to negotiate a plan to defer delinquent payments,
which allows your lender to bring your loan status back to current, and thereby removes all risk of repossession based on any prior late payments.
RISK FREE can get creditors of unsecured debt to drastically reduce their balances, because these lenders have no other recourse
but to pursue borrowers in Court or tolerate the crushing loss of all of their receivable when a borrower claims bankruptcy. RISK FREE can use the creditor’s
fear of getting nothing for their unpaid receivable to score a major discount for the borrower. But when a lender has some recourse, especially where property
is secured by collateral which the borrower needs for daily living, such as their home or vehicle, there is a balance of terror between the lender’s fear of
the borrower defaulting and the borrower’s fear of the lender repossessing the collateral. The lender is not so afraid of the borrower’s default that it will
routinely excuse a large amount of debt, and has little or no incentive to drastically reduce the balance. Still, even secured lenders have to worry about
the cost of foreclosing or repossessing property, maintaining it for months until an auction, and then paying to sell it off. So while these lenders will
usually not drop their principal balance much (if at all), they will make concessions, either in time for payment or waiving some charges, to accommodate
a borrower with a credible plan to wipe out a one-time arrearage, get current and make new arrangements. RISK FREE knows just how to get the best result for
its clients who deal with secured lenders.
A real recipe for mischief and miscommunication is for different firms to handle secured debt relief and unsecured debt settlement. Few firms handle both, and even now, millions of borrowers turn to one firm (or perhaps directly with their lender) to handle the secured category of their debt, while referring their unsecured debt to a completely different firm.
There are many problems which can arise with such a disjointed, fragmented approach.
Debt settlement is a process which should be coordinated among all settled obligations, because tax and credit consequences are affected by ALL debts being forgiven or modified at any one time. Next year’s tax results (especially relief under vital “insolvency” provisions which protect borrowers from having to pay tax on forgiven debt, even in the absence of any bankruptcy filings) and most creditworthiness issues depend on an understanding and accounting of all debts at each point of debt forgiveness.
If different firms handle each category of debt, each firm may lack vital information as to the amount of debt, temporary insolvency or creditworthiness left by each firm’s actions.
To keep the process of debt relief coordinated and well informed, it is always preferable to have a single advisor apprised of what is happening to all of the debts being settled.
RISK FREE is unique among settlement firms in its ability to handle ALL kinds of debt
Debt settlement of principal amounts of unsecured debt creates debt forgiveness, which can be taxable unless the borrower can demonstrate insolvency at the moment of debt forgiveness. This does not require a bankruptcy filing, but it is a complex reckoning which an accountant or tax expert can help with, when it comes time to file your taxes. Consult your own tax advisor.
But settlement of secured debt by way of fresh loan arrangements (either through formal loan modification or by way of informal, special loan arrangements) generally only involves deferment of late payments to the end of the loan, and at most, waiver of a few nominal fees. There is no huge principal balance forgiveness which can be made subject of any tax. However, if a secured debt is terminated by way of a short sale or deed in lieu, the lender invariably issues a “1099” form, which documents the event and creates its own tax consequences, which your accountant or adviser can describe in more detail. Generally, unless the amount of debt exceeds the market value of the secured property, there is no taxable forgiveness, and even if debt does exceed market value, there may be escape from tax liability through tax insolvency provisions. Consult your tax expert. RISK FREE does not provide tax advice, but we try to limit tax risk.
Secured creditors’ outright foreclosure or repossession of secured collateral etches a deep gouge of negativity into your credit profile, one of the most derogatory possible entries, which pulsates like a dark star over your credit rating for years. A short sale or deed in lieu also leaves a credit mark, but it is far less derogatory or negative than foreclosure.
Fresh, lender-approved arrangements to re-classify your loan as current may, in rare cases have the beneficial effect of erasing past derogatory entries for late payments you made before the arrangement was posted to your account, but usually your old delinquent payments will remain on the record. Still, the arrangement limits damage to your credit.
RISK FREE does not pretend to monitor or repair credit but we try to limit credit damage