Dedicated Account

Dedicated account summary:

• A dedicated account is an account set up by a professional debt settlement company as part of the debt settlement process.

• You'll contribute funds to your dedicated account each month to build up a balance.

• The debt settlement company will use the funds in your dedicated account to pay your creditors once they have negotiated an agreement and you’ve had the chance to review and approve it. The debt settlement company’s fee is taken from the same account. 

Dedicated Account Definition and Meaning

A dedicated account is an account that a professional debt settlement company sets up with a partner bank on your behalf. It’s a place where you can build up funds for making offers to your creditors. You own and control the account. 

Key Features of a Dedicated Account

• A dedicated account is part of a Freedom Debt Relief debt settlement program. It’s an account at an FDIC-insured bank. 

• In a debt settlement program, you’ll make monthly contributions to your dedicated account to build up funds for settlement offers. 

• When your expert negotiators reach an agreement with one of your creditors, you get a chance to review and approve it. 

• If you approve, money from your dedicated account is sent to your creditor. 

• Some agreements are for a single payment. Other agreements are for a series of payments. 

• After at least one payment is made, the debt settlement company’s fee is also paid from your dedicated account.

• You own and control the dedicated account. 

Comprehensive Breakdown of a Dedicated Account

You might decide to use a debt settlement company to negotiate your debt on your behalf. An expert Debt Consultant will create a personalized plan for you.

As part of the debt settlement process, an FDIC-insured bank account will be opened for your use. You’ll work with a debt expert to determine how much money you can afford to put into your dedicated account each month. Then, you’ll make contributions (typically by automatic debits) until you have a large enough balance for a debt negotiator to propose a settlement with one of your creditors. 

Once your negotiator reaches an agreement with your creditor, it’ll be presented to you for your approval. After you review and approve it, the money in your dedicated account will be withdrawn to pay your creditor. Some agreements are for a single lump-sum payment. Other times, your creditor might agree to an installment plan. The funds in your dedicated account will also be used to pay your debt settlement fees.

Since your dedicated account is yours, you control the funds at all times. However, it's best not to withdraw from the account other than to pay your creditors once a debt settlement is negotiated. 

The more money you're able to contribute to a dedicated account each month, the sooner you may be able to settle your debt. Your Debt Consultant will help you figure out how much you can afford to contribute to your dedicated account if your financial situation changes over time.