Frequently Asked Questions

Are you looking for debt help or have questions about how the debt relief process works? Don’t worry! We have listed some of the most frequently asked questions on this page. Simply click on a question to see the answer. We are positive the information below will assist you with any debt help you may need. If you have any further questions or concerns, please don’t hesitate to contact us or give us a call at the number above.

1. What types of debt qualify for Lifeline’s Debt Settlement Program?
Our program is focused on dealing with unsecured debt, such as credit cards, lines of credit, personal loans and medical bills. Debt secured by collateral such as mortgages, auto loans, etc. cannot be enrolled into our program.
2. Should I enroll into Lifeline’s Debt Settlement Program?

If you are experiencing any or all of the following, our Debt Settlement Program may be right for you.

You are having difficulty making credit card payments

You have been late with one or more payments in the past three months

You are not seeing a decrease in your credit card balances

You have maxed out your available credit

You are receiving calls from your creditors

3. Will I be totally debt free upon completion of your program?
Yes. When you complete our program, all debt enrolled will be fully paid off. However, not all consumers complete our program and following through with the monthly savings plan is key to your financial freedom.
4. Will this program have a negative effect on my credit?
The reason you are eligible for our program is because you have a legitimate hardship situation. Therefore, you are late with your monthly payments and in certain instances are no longer making payments. Late and missed payments already have an adverse effect on your credit. In many instances, your credit may not be further affected.
5. How long will it take me to complete the program?
Typically, our clients are debt free in 24 to 48 months. However, it depends on you and your ability to maintain your payments in the monthly savings program.
6. How much will my monthly payment be?
We will work with you to customize a monthly payment program you can afford. We can only settle your outstanding debt once you have accumulated sufficient funds in your savings account. We encourage you allocate as much as you can towards your monthly payment. The faster you accumulate funds in your savings account, the faster we can settle with your creditors.
7. Who is in the control of the accumulation account?
You are. The account is set up in your name and therefore the funds in that account belong to you. Once the account has sufficient funds accumulated, we will work with your creditors to reach a reduced settlement.
8. Can I negotiate on my own?
Yes, you absolutely can. You can also do your own taxes and build your own house, but most people prefer to use professionals. Our team of specialists is trained to negotiate reductions in our clients' debts. That is what we do.
9. Will I receive phone calls from collectors?
Our clients may experience some collection calls. Our goal is to work with your creditors and minimize the number of calls that you receive.
10. Will I owe taxes after I complete the program?
Generally, any amount of debt forgiven is deemed taxable by the IRS. However, there are exceptions available for hardship. Please contact your tax advisor to discuss whether the hardship/insolvency provision is applicable to you.
If you are struggling with debt problems, then your credit score may not be perfect. This is usually because you are not making the required minimum payments to your creditor and your payment history is being reported to consumer reporting agencies as a late payment.

It is our job to get you out of debt as fast as possible and for the lowest cost possible so that you can work on re-building your credit. Once all accounts are settled, your debt to income ratio will improve and the money you were spending on high interest will now be available to invest in long term investments such as a home. You will no longer have to pay high interest with no investment return and no end in sight.

No matter how you look at it, the effects of debt settlement on your credit rating will certainly be less damaging than the effects of bankruptcy.
Unsecured debt is a debt that is not secured with collateral. Basically, unsecured debt has no tangible assets or property attached to it. Credit cards, personal loans, lines of credit, retail debt, and medical expenses are all examples of unsecured debt.

Secured debt is debt that is secured with collateral. This means that the creditor has collateral in the form of a security interest in personal and/or real property. This protects the creditor because if you fail to make timely payments on secured debt, then the creditor is entitled to repossess the property and sell it. The most common types of secured debt are mortgages and auto loans.
The answer is no. This program was designed to negotiate with your creditors and reduce your entire debt with a lump sum payment. For example, if you currently owe $50,000 and a counsellor arranges for a 40% settlement then you would pay $20,000 directly to your creditors.

Debt consolidation will require you to apply and obtain a new loan to pay off the entire amount of your existing debt. It is generally harder for people with a lot of debt to obtain such a loan. Additionally, the interest rate for such a loan is quite high. At LifeLine Debt Relief, we don't believe that you can get out of debt by borrowing more money.
No. Credit counseling will reduce your interest rates, but you will have to pay off the debt in full. This means that you will end up paying the entire amount you owe with a reduced interest rate usually over a longer period of time.

The problem with credit counseling is the monthly fees are quite high. Another downside is it could take five or six years to pay off your debt which could further damage your credit score. This is substantially longer than the debt settlement plan offered which normally takes 12 - 36 months.
No. Unfortunately, we cannot provide financial or legal advice. We suggest approaching a licensed lawyer if advice is needed.

The information provided on our website doesn't constitute financial or legal advice and should not be used as a substitute for the counsel and services of a licensed lawyer.
The answer is yes. Unfortunately, a debt counsellor cannot guarantee that legal action will not be taken against you. However, this is highly unlikely for clients. This debt settlement program is constantly screening potential clients to minimize the risk that a client would be subject to legal action. With that being said, all clients in Ontario are provided legal representation by a paralegal at no additional costs in the unlikely event that this occurs.

The odds are usually in your favor as creditors are well aware that if they take legal action against somebody in a financial hardship that it can result in that client filing for bankruptcy. Creditors would much rather agree on a settlement than risk not being paid at all.
Your responsibility is to follow the detailed plan that a counsellor will provide you. This includes restricting your spending so that you can follow the budget and make your monthly payments on time. This will allow a debt counsellor to effectively negotiate your settlements with all of your creditors.
No. Applying for new credit cards and using your existing credit cards will only increase your debt further. It is important to show creditors that you are working on reducing your debt and so you cannot apply for new credit cards or use existing credit cards until all of your debts are resolved.
The answer is simple, you do. The account is setup by you in your name. The debt settlement company will withdraw the monthly service fee from this account, but all of the funds are owned by you.
Yes. It will be up to you to make the payments to your creditors once a counsellor successfully negotiates a settlement for you. When the settlement is finalized, a debt counsellor will provide you a copy in writing along with easy payment instructions so that you can successfully pay your creditors on time.

The purpose of this arbitration program is to act between you and your creditors to negotiate a settlement on your debts.
Yes. If you own a home with equity, a debt counsellor may be able to enrol you into a FAST Track plan that will allow you to get a settlement quicker. This will enable you to refinance your equity and pay off your debt with a larger lump sum payment.
If your loan-to-value is high then it shouldn't affect your mortgage. Creditors will expect you to utilize the equity in your property so that you can settle your debt with them.

A debt consultant will be able to discuss this further with you.
Creditors will continue to charge you fees and interest if you let your accounts go delinquent. It is important to make your minimum payments on time if you can, but keep in mind that interest is going to accrue regardless.

It will be the debt counsellor's job to negotiate a reduction to the balance of your accounts, even after all of the fees and interest charges.
It is important to realize that creditors see your participation in a debt settlement program as a giant leap forward. It shows them that you are willing to make a serious effort to repay your debts and get back on track.

By enrolling in this debt settlement program, you are taking on a serious commitment. It will not be in your best interest to terminate this agreement as it may result in more difficult circumstances for you.

If you are not sure about this program and have further questions, please feel free to speak to a debt consultant before committing to the program.
To get started, simply fill out our online debt relief form to receive a free one-on-one phone consultation. Please keep in mind that your information is completely confidential and there is no risk, cost, or obligation to speak to us about becoming debt free.

Our debt counselors will be happy to discuss your situation at a greater length. This will allow us to determine if you are a good fit for our program.

Become Debt Free!