Debt Settlement Information

Debt Settlement Programs That Work:

Why Trusted Debt Settlement Programs Can Be Exactly What You Need In Your Life!

Debt Settlement, also known as Debt Consolidation, is the process of paying less than is owed on credit cards and other unsecured debts, by negotiating with your creditors. Secured debts such as student loans, auto loans, and home mortgages unfortunately do not qualify for such programs. You will need to be in default on your current loans to utilize any debt settlement program and be able to gain the leverage needed to negotiate with your creditors. Typically, debts can be reduced by 40-70%.

 

Debt Settlement FAQ’s:

 

Does Debt Settlement Work?:

 

Yes! However, debt settlement isn’t for everyone. Debt settlement is designed for those who can no longer make their payments, already behind on their payments, or even considering bankruptcy. Debt settlement, when done properly, is a very safe alternative to bankruptcy. Debt settlement may not be an ideal option for those with very little debt. On average, a debt settlement client has $30,000 of unsecured debt.

 

Does Debt Settlement Hurt Your Credit?:

 

Debt Settlement is listed on your credit report, so yes, it will definitely impact your score. Debt settlement only works once you’ve been in default on your loans, because if you’re still current, creditors are unlikely to want to work and negotiate with you. Even though debt settlement can adversely affect your credit score, when compared to filing bankruptcy, debt settlement is far less detrimental to your score.

 

Is Debt Settlement Better Than Bankruptcy?:

 

Like we’ve discussed Bankruptcy, comparing debt settlement to bankruptcy, should be on a case by case basis. They both have their pro’s, and they both have their con’s.¬†Bankruptcy will offer you legal protection under the court so that you don’t have to worry about being sued or harassed by creditors during the bankruptcy process. Debt settlement does not provide the guaranteed legal protection that bankruptcy does, however most reputable debt settlement companies will work to assist you in minimizing creditor calls and harassment where they’re able to.

 

Obviously there’s much to consider when deciding which route to take between bankruptcy and debt settlement. Our recommendation is to speak directly to a bankruptcy attorney to make sure you understand all the ins and outs of the process. This will help you make a more informed decision and should not be taken lightly.

 

If you’re in need of a trusted bankruptcy attorney or debt settlement company, please fill out the form to the right and one of our professionals will contact you personally to assist.

 

Debt Settlement Tax Implications:

 

Probably the worst part of the entire debt settlement process are the tax implications. Unfortunately, Uncle Sam won’t let you off completely scott free. Any money saved from utilizing the debt settlement program is considered taxable income by the IRS. Meaning, if you settle $30,000 in credit card debt for $10,000, $20,000 will be considered taxable come tax time. However, this is a small price to pay for the amount saved so this really shouldn’t be a deterrent when considering debt settlement. Should you have any further questions regarding this topic, please contact your personal accountant or tax advisor.

 

Credit Repair After Debt Settlement:

 

This is where the term “Having your cake, and eating it too” comes in handy. After going through the debt settlement process it is highly recommended to speak with a reputable credit restoration company. We touch on credit restoration basics in our blog. After completing the debt settlement process, your credit is likely to have some negative information on it. Credit restoration companies can have these items completely and legally removed from your reports. There are many legal loopholes that credit restoration companies utilize during this process. Many times, after the restoration, your credit score will be higher than it was before defaulting and going through the debt settlement process.

 

Our Credit Restoration company has a 100% success rate with over 200,000 clients and growing. Let us help you get out from under all the debt. Please feel free to call, fill out the form to the right, or contact us for a free debt consultation.

 

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