DEBT SETTLEMENT PROGRAM GUIDELINES

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1 DEBT SETTLEMENT PROGRAM GUIDELINES MINIMUM PROGRAM DEBT: $5, MINIMUM ACCOUNT BALANCE: $ PROGRAM TERMS: $ 4,999 TO $ 8,999 = 21 MONTHS $ 9,000 TO $ 11,999 = 28 MONTHS $ 12,000 TO $ 19,999 = 30 MONTHS $ 20,000 TO $ 29,999 = 32 MONTHS $ 30,000 TO $ 39,999 = 34 MONTHS $ 40,000 TO $ 59,000 = 36 MONTHS $ 60,000 TO $ 74,999 = 38 MONTHS $ 75,000 TO Infinity = 42 MONTHS EXTENDED TERMS AVAILABLE FOR EXTREME HARDSHIPS Program Debt Requirements Debt Accepted Into The Program: Credit Cards Unsecured Loans Unsecured Personal Loans Collections Repossessed Autos with Deficiency Statement Medical Bills College Tuition No Government Backed Student Loans Repossessed Recreational Vehicles Unsecured Personal Lines of Credit Gym Equipment Payday Loans

2 Debt Not Accepted Into The Program: Utilities on Open Accounts Current Auto Loans IRS Debt Tax Liens Student Loans (Government Backed) Military Star Military Pioneer Jewelry Accounts Cash Call Secured Loans Home Loans (NO HELOCS) Apartment Lease Defaults Overdraft Accounts (linked to checking or savings accounts) Business Accounts (with the company currently open) Credit Union Personal Loans Army & Navy Exchange Service (used primarily by military personnel) Gym Memberships USAA United Services Automobile Association (used primarily by military personnel) USAA Federal Savings Bank (used primarily by military personnel) Debt that is pending or in the process of a Lawsuit (if judgment has been issued, ok. No PENDING litigation) NOTE: (* *) See Descriptions Listed On The Next Few Pages for Debt that can be entered into the program if the proper requirements are met. Debt Allowed in the Program with Special Circumstances: Banks: We accept Credit Cards, Unsecured Loans, Unsecured Personal Loans, Autos or Trailers that are repossessed. If the client has a checking or savings account with the bank, it needs to be changed prior to enrollment. Business Accounts: Any accounts related to a business will not be accepted into the program if the business is currently open. If the business is closed, the debt may be accepted into the program with a signed Commercial Debt Waiver. Savings Accounts: A client may use a savings account as a source for debiting their monthly payment. The client needs to know that the deposit slip routing number is used for deposits only. The client will need to contact his/her bank and request a routing number for debits (withdrawals) from the savings account. This is the number which we will use for debiting the payment. Credit Unions: We only accept Credit Card debt from Credit Unions. Clients must close their Credit Union checking or savings accounts prior to entering the program if they are including a credit card from the Credit Union.

3 This is due to Cross Collateralization. If the accounts are not closed and the Credit Union receives the Limited Power of Attorney, the Credit Union will freeze the client s assets associated with that Credit Union. This can include repossession of a vehicle financed through the credit union, a lien against a mortgage through that Credit Union and so on. A client may not enter debt from a Credit Union that he is employed with or associated with. The Credit Union will recoup their money from the clients pay check and/or may terminate his employment. Credit Reports: The use of credit reports is accepted. It is still suggested that you instruct client to send in all statements for accounts being enrolled into the program ALONG with running their credit. Date last reported or date updated for each creditor can not be older than two months. With dates three months and older we have found in many instances the debt has been sold to another agency or sent to collections. Client can obtain their own credit report and send it to you. Tell them to get the TransUnion report through This report includes the most recent information with full creditor account numbers. Instructions for client to obtain report: 1 - Instruct client to go to Once logged into website, client will select the state the client resides in. 3 - Next select request report. 4 - Client will be asked for personal information, i.e. name, address, social security number, etc. 5 - Once personal information is completed, click Continue 6 - On the next page, the client will be asked what credit reporting company they want to choose. Client will select TransUnion, then click next to continue. 7 Client will have to answer 3 security questions such as account numbers for revolving or installment loans they currently have, name of a past employer, address and zip of a past street they lived on. 8 - Have client print report and fax.

4 Creditor Worksheet: The Creditor Worksheet is to be filled out entirely. -Please include all account numbers in full as well as balances. Gas Cards: We accept Gas Cards that are backed by major creditors such as Visa, Master Card, etc. Account numbers will be sixteen digits: i.e. BP Cards (through Chase), Shell Master Card (through Citibank), etc. Collections If a creditor has acquired the services of a collection agency to recover a debt, the statement from the collection agency needs to have the original creditors account number in order for us to verify and negotiate the client s debt. A majority of the time, the collection agency will also have their own account number along with the original creditors account number on the statement. If an agency has purchased the debt and is not working for a creditor, the account number the agency has assigned to that debt will be sufficient for verification and negotiation. Balance Transfers and Cash Advances: Clients are required to make at least 3 monthly minimum payments on any balance transfer or cash advance before the debt may be entered into the program. This would also apply to any balance transfer or cash advance from a line of credit. During a consultation with a client, please ask, Have you done any balance transfers or cash advances in which ZERO payments have been made at all to that creditor on a that credit card, personal loan, line of credit, etc. If the answer is yes, then a determination needs to be made whether that debt can be accepted. This will be based upon the size of the advance or balance transfer, how long has it been since it took place and the specific creditor. In some instances, a balance transfer or a cash advance above $500 may be accepted based upon the size of the debt and the creditor to which it is associated with. This will be a case by case basis and will be determined by management. Military Accounts: We can accept active Military Personnel into the program, this includes Military Reserves. A Military Debt Waiver will be signed by the client and his/her commanding officer. Our Compliance Officer will verify authenticity of the waiver. - (If we accept a client in the military without such a waiver, it could hurt their current rank, future advancement, loss of security clearance, and possible demotion.) Government Security Clearances: - A number of Military personnel and civilian personnel work for the Government. Within these positions, they hold security clearances, some at very high levels. Verify with the client that this program will not jeopardize their job or security clearance.

5 This is a possibility. USAA Accounts: - In some cases we can negotiate on USAA accounts. The most common services are listed below. - USAA United Services Automobile Association (used primarily by military personnel) and USAA Federal Savings Bank (used primarily by military personnel). - The following criteria will be used for qualification of a USAA debt to be entered into the program. It is pertinent that each consultant makes sure that this criterion is met and is accurate. Each USAA debt will be reviewed by management and in compliance. 1. Client is not enlisted in the military. 2. Client is not active in the military reserves. 3. Client is not receiving military retirement pay or subsistence. 4. Client cannot be a family member or relative of an active or retired military person who is a signer on the client s card or account. 5. Client is not employed by the government in a contractor capacity. Note: If a client meets the above listed criteria, there is still another concern. If the client has automobile insurance, house insurance, renters insurance, etc., more than likely they will be dropped from the carrier. If not, when the policy is to be renewed, the carrier will likely request a year in advance premium or not let them sign up for insurance at all. Furniture Accounts: These accounts MUST have a Secured Debt Waiver. Make sure to inform the client that there is always the possibility that the furniture may be repossessed. Student Loans: There are a number of different Student Loan Programs throughout the United States. Some are financed through private lenders while others are Government backed. We do not accept this type of debt. We Will Not Accept Any Student Loan That Is Government Backed Such A Stafford Loan, Federal Direct Student Loan Program, Federal Plus, Federal SLS, Federal Consolidation Loan Program. College Tuition We can take college tuition that is not attached to any school loan like a Stafford Loan. This type of tuition debt typically comes from online courses from colleges such as Phoenix and Westwood College. Judgments: We can accept accounts that have judgments against them. The client needs to be informed that the account may settle at a higher percentage. NOTE: In order to enter a Judgment into the program, it requires the Judgment Order. This order dictates the terms of the judgment which allows us to see what avenues we have for negotiating the settlement.

6 Lawsuits We will not accept a debt which has been issued a notice of pending lawsuit or is in the process of being sued by an Attorney or a Law Firm. The debt can be added to the program once a judgment has been awarded. The debt, when added to the program (as a judgment) will settle at a higher percentage rate. Cell Phone Bills: We can only take Cell Phone bills that are in collections after the account has been closed. Hardship Explanations: Clients are required to complete a detailed Explanation of Hardship. This hardship explanation is very important in the negotiation process. If the explanation is weak or minimal, the creditor is apt to discount a settlement proposal if not deny it completely. Please instruct your client to be as detailed as possible regarding their hardship. It is also helpful if you go through the hardship with them and take notes. That way, when the paperwork is returned to you, if they have by some chance forgotten to include details of their hardship, you can call them, go over the missing information and have them add the missing hardship and re-send it to you. Repossessed Vehicles: Automobiles - We accept debt on automobiles that have been repossessed. Proof is required the vehicle has been repossessed; a Deficiency Balance Statement will indicate the balance to be negotiated on. Recreational Vehicles - We accept debt on recreational vehicles that have been repossessed. Proof is required that the vehicle/trailer/rv/etc. has been repossessed; a Deficiency Balance Statement will indicate the balance to be negotiated on. Recreational Vehicles: Motorcycles, ATV s, Boats, Jet Ski s, Trailers, Tractors, Motor Homes, Campers, RV s, Snowmobiles, Airplanes. We will not accept the debt if the client still possesses the vehicle. Sometimes a client states he does not care if the creditor repossesses the vehicle, he will sign a secured debt waiver and wait for whatever happens just to get the debt accepted. The problem with this is that the vehicle, once repossessed, will be sold at auction which changes the debt balance. There will also be late charges, estimated repossession, collection and storage expenses that will be added to the debt. We need a true debt amount in order to negotiate. If the recreational vehicle was purchased with an outside unsecured credit card we can accept the credit card debt. ** Outside would indicate that the issuer was not the brand of the motor vehicle. Example: Yamaha credit, Honda credit.

7 Conn s Electronics & Furniture Stores: We do not accept any accounts in collections from this store (located mainly in the state of Texas). They will show up at the client's residence or business and repossess any items associated with the debt. Citi and Discover Cards: Client is to be informed that a Limited Power of Attorney will not be sent to the following Creditors: Citibank, Citicorp, Citigroup and Discover Card. Citi and Discover have a history of pursuing legal action against clients as soon as they know the client is working with any agency. This does not guarantee that Citi or Discover won t sue. By using these tactics, it will help if not delay any action from the creditor. The Power of Attorney for Citibank, Citicorp, Citigroup and Discover will only be sent once the debt goes to a collection agency. On average this takes six to eight months to happen. Affiliates of Citi that currently negotiate are: Citifinancial, AT&T Universal, Sears, Goodyear and Home Depot. Payment Coupons for Unsecured Loans: We can accept payment coupons for unsecured loans under the following circumstances: We need to see a copy of the unsecured loan agreement. This insures that the loan is not secured or that there are no stipulations within the loan that would jeopardize the client's property or personal possessions. Need the most recent payment coupon. No older than two months. Client needs to request the current balance of the loan from the bank. Gym Memberships: We do not accept any Gym Memberships into the Program. This includes the likes of Bally's Fitness, 24 Hr. Fitness, LA Fitness, LA Sports Clubs, etc. Please call to see if you qualify for debt settlement. Direct Federal Mortgage Inc Beach Blvd., Suite 46 Huntington Beach CA Marketing Site and wholly owned subsidiary of Direct Federal Mortgage Inc Beach Blvd., Suite 46 Huntington Beach CA Toll-Free Office