Debt settlement disclosures
Debt settlement isn’t for everyone. We’ll tell you if it isn’t for you. This page is the written version of that conversation: what the program costs, what it can’t do, and what could go wrong.
1. Fees are charged only after a debt settles
Under the Federal Trade Commission’s Telemarketing Sales Rule, a debt settlement company may not charge a fee for settling a debt until a settlement has actually been reached with the creditor, the terms are in writing, and you have made at least one payment toward that settlement. Vertex operates under that rule. Our fee is set as a percentage, stated in your written agreement before you enroll, and charged per debt only after that debt settles, you have approved the settlement, and the first payment under it has been made. If no debt settles, you owe no fee.
2. Your money sits in an account you own
Programs require you to save money into a dedicated account, held at an independent financial institution, in your name and under your control. Settlements and, after a settlement, our fee are paid from that account with your authorization. The institution that holds the account has its own agreement with you, and any account charges of its own are disclosed there, not here. You may withdraw from the program at any time and take the funds in the account, less any fees already earned on settled debts.
3. Credit impact
Debt settlement is likely to hurt your credit, at least in the near term. To negotiate, accounts usually need to be past due, and creditors report missed payments. A settled account is typically reported as settled for less than the full balance. How long the effect lasts depends on your overall credit history. If you expect to apply for a mortgage, auto loan, or other credit soon, weigh that carefully.
4. Balances may grow before they settle
Until a settlement is reached, interest, late fees, and penalties on enrolled accounts generally continue to accrue. The balance a creditor claims can increase during the program, sometimes significantly, before it is reduced by a settlement.
5. Creditors can keep collecting, and some may sue
Enrolling in a program does not stop creditors or collectors from contacting you, and it does not prevent a creditor from filing a lawsuit. Some creditors refuse to negotiate with settlement companies at all, and some will only negotiate late in the process. We work to resolve accounts before legal action, but we cannot prevent it, and a judgment can lead to wage garnishment or other remedies allowed in your state.
6. No guarantee of results
We cannot guarantee that any particular debt will be settled, the amount of any settlement, the fee savings, or how long a program will take. Outcomes depend on your ability to save, each creditor’s policies, and factors outside anyone’s control. Any figure you hear about “typical” savings or timelines is not a promise about your case.
7. Tax consequences
When a creditor forgives part of a balance, the forgiven amount may be treated as taxable income and reported to the IRS on Form 1099-C. Exceptions exist, including for insolvency. Vertex does not give tax advice. Talk to a qualified tax professional about your situation.
8. Alternatives exist
- Paying in full, on your own or with a hardship plan directly from the creditor.
- Nonprofit credit counseling and debt management plans, which typically repay the full balance at reduced interest.
- Bankruptcy, a legal process with its own consequences and protections. A licensed attorney can explain whether it fits.
- Doing nothing yet, if your situation is likely to change.
We will tell you on the first call if one of these looks like the better tool.
9. Availability varies by state
Debt settlement is regulated at the state level, and services are not available in every state. Requirements, licensing, and fee limits differ. Our form asks for your state so we can tell you up front whether the program is offered there. [List states where services are not offered, or reference the partner’s current list.]
10. Who we are and what we aren’t
Vertex Resolution LLC is a debt settlement company organized in Wyoming, located at 30 N Gould St, Ste R, Sheridan, WY 82801. We negotiate unsecured debt settlements. We are not a lender, we do not offer loans, and we are not a law firm. Nothing on this Site is legal, tax, or financial advice. Vertex Resolution LLC is the company you deal with, and its written agreement is the one that sets the fee. Enrollment, the dedicated account, and payment processing may be administered on its behalf by our servicing partner, [servicing partner name], under a separate agreement with you. [Confirm which entity is the provider of record and licensee in each state before launch.]
Questions about any of this: privacy@vertexresolution.com, or ask on the first call.