Frequently Asked Questions

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Square One Financial Group could help you with debt from credit cards, medical bills, department store cards, and many other types of unsecured debt. Our program cannot help with a debt that involves collateral (like auto loans and mortgages).
We can help with private student loans on a case-by-case basis. Although we cannot resolve your Federal Student Loans, we do have solutions outside of debt settlement we can refer you to.
Our program is focused on dealing with unsecured debts (credit cards, medical bills, unsecured personal loans, etc.). We can’t help with debt that is secured by collateral (such as mortgages or auto loans). However, after completing the program, the money you had been paying towards your unsecured creditors can be used to pay down secured debts and start saving for your financial future. Not everyone completes our program, so remember that sticking to your monthly savings plan is the most important factor in determining your success.
There are federal and state laws designed to protect you from harassment by collectors, but the fact is that most of our clients will receive some collection calls. Square One’s goal is to get your creditors to call us and not you.
A single credit card with a low balance and low interest might be good to keep active for emergency situations. To get the full benefits out of this program, you’ll need to sign up with all your high balance credit card accounts. These would be the ones with amounts over $500. Our strongest bargaining chip is to show your creditors that you’re working on all of your debt, not just a few accounts.
You are. When you set up your bank account you will do so in your name. It’s also your money. The idea behind setting up this new account is to keep a healthy distance from your current bank accounts. Believe it or not, separating your account can actually increase your chances of successfully completing the program on time.
It’s important to know that your credit scores have already declined if you’re at the point of resolving your credit card debt or other debt. While enrolled in the program you will not be making the required minimum payments to your creditors. In turn, these missed payments can be reported on your credit report. Although this can be stressful, your top priority should be to get out of debt and get your finances back on track.
Talk to your credit card company about whether it will report your agreement as a settlement to the credit bureaus. If so, that settlement could appear on your credit report for about seven years and may damage your credit score. Ask your credit card company to report the settlement as “paid in full” instead. Once your debts are settled and wiped away and you are keeping your financial house in order, your credit scores will move up.
The IRS considers a forgiven debt as taxable income, so at the end of the year they will expect taxes to be paid on the settlement. IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, may exempt you from this tax. Please contact a tax adviser to discuss this issue further.
Part of your agreement with credit card companies allows for them to continue to add interest and late fees any time you fail to make payments. This means while you’re getting your settlement account set up and funded your credit card debt could go up. This is going to happen whether you make a minimum payment or not. Our goal is to secure significant reductions to your account balances no matter what kind of interest hikes or late fees have been added on.
Definitely. The better question would be why haven’t you up to this point? You can also do your own taxes and repair your own car, but most people would rather leave these tasks to professionals. The Square One affiliate team of debt negotiators resolve approximately $100 million in debt each month. Who do you think is more likely to get the results you’re looking for?
On the average negotiations begin within 1 to 2 weeks after you sign up with the program. These initial calls will be to let them know that you have entered into a partnership and you are working on resolving your debt. This also lets them know what company they should be calling to settle this debt instead of you! Most of your creditors won’t get into the serious discussions of debt reduction until they know you are serious about paying them off. This can only be accomplished once you have established a settlement account and reached the necessary balance. The first settlement usually happens within the first 6 to 9 months of the program.
Creditors do have the right to send debts to collection agencies and/or law firms to collect a debt. In our experience, lawsuits are only filed on a small percentage of enrolled debts. If this happens to you, we established a relationship with a third-party service from a law firm that can negotiate with the goal of resolving the debt. Note that the settlement percentages associated with settlement of debts in litigation are often higher than typical non-legal settlements. Take note that we are not a law firm and cannot provide legal advice or legal representation.
No. Every case is a negotiation, and there is no guarantee as to how those negotiations will go. Furthermore, the success of our negotiations is highly dependent on your ability to pay the specified amount each month you are in the program.
In extreme cases when a creditor doesn’t want to settle the only option is to remove the card from the account. Adjustments in the fees will be made and you won’t have to pay if a settlement can’t be reached. The chances of this happening are rare. Most of the creditors you’re signed up with are happy to get some form of settlement, especially when you can show a hardship.
We recommend you view the FTC’s advice. Click here to go to their website.
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