Who is qualified for our programs?
The Lokman Debt Relief Program is only for people facing financial HARDSHIP. This means people who are late on paying their debts, have little or no ability to pay their debts in the future and are facing a possible bankruptcy. Examples of qualifying hardships are loss of income, medical emergency, death of a member of the household who provided financial assistance, or a divorce.
Who is NOT qualified for our program?
Lokman Debt Relief 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 our debts in the normal fashion, by paying 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 their monthly debt obligations.
Is bankruptcy a better option for me?
Anyone considering our program should also contact a bankruptcy attorney to determine if his or her situation warrants filing for bankruptcy. Using the Debt Settlement process does not guarantee that you will not have to file for bankruptcy in the future.
Does Debt Settlement have a negative impact on my credit?
YES. Your credit score will decline due to entering this program. How much it will decline depends on your original circumstances. Most of the accounts you place into negotiation are likely to “charge off”, which will reflect negatively on your credit. However, once this charged off debt is settled, the settlement is reported to the credit bureaus. Settled accounts are positive compared to unresolved delinquent debts or bankruptcy. A high credit score is desirable to have, but if you have a financial hardship and are unable to pay your debts, then your first priority should be to pay your delinquent debts and get back on your feet financially.
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 designed for you to get out of debt.
What will I pay for your services?
Lokman Debt Relief has a 15 % fee, which is calculated based on the total amount of debt that an individual brings into the debt settlement program. This program small monthly fee is usually paid throughout the first 12-24 months of the program. All cost and fees are always fully disclosed and you are required to sign for approval before you commit to our program.
Can I be sued?
YES. Your creditors certainly have the right to sue to recover their money. But usually the purpose of the lawsuit is to force a settlement on the matter. In our experience, many creditors would rather not go to the expense of suing and simply try to negotiate a settlement.
Can creditors garnish my wages?
Yes, however this can be a long process for the creditors. The creditor first has to sue you, successfully obtain a judgment, and then file for a garnishment action. If you’re willing to work with your creditors, wage garnishment can normally be avoided.
What are the tax consequences?
Your creditors will report cancelled/settled debts exceeding $600 to the IRS and you are required to report the same as income on your annual tax return. However, the IRS permits you to write off any “income” from cancelled debts up to the amount by which you were “insolvent” at the time. You need to consult your own tax advisor for advice specific to your situation.
What if I cannot afford to pay the fee?
If you can afford to make the monthly payments, you can afford to pay the fees. All fees are built into the program and are included in your payments. Simply make your monthly payment and all the fees will also be paid.
Why shouldn’t I just file bankruptcy?
Many people faced with financial hardship rush to bankruptcy as a method of resolving their debt concerns, although their problems might have had other solutions. We believe bankruptcy should ONLY be used as a LAST RESORT, pursued ONLY after all other debt relief remedies have been explored. A bankruptcy filing is a very detrimental entry on your credit history, and can remain on your credit reports from 7 to 10 years after the bankruptcy filing has been discharged.
Should I get a loan instead?
Borrowing more money is not going to help you. Please understand that you’re in a high-risk category and the higher the risk for bank, the higher the rate for you. Remember, you want to get out of debt not deeper in. Plus, if you could get a loan, the lender would most likely want it to be secured by your home or other assets. If you then defaulted, you would lose whatever precious assets you currently have.
When will the negotiation process start?
As sufficient funds accumulate in your Settlement Deposit Account, settlement offers are submitted to your creditors. Therefore, “starting negotiations” is completely dependent on the available funds in your Settlement Deposit Account.
Do I need to consolidate all accounts in the program?
With debt settlement you can choose which accounts you want to include. You should be aware that some accounts left out of the program might be closed if the creditors discover that you are in debt settlement.