Have you had restless nights because of you are worried about your bills? Is your debt piling up with no solution in mind? You have to resolve this problem before it gets worse! Your credit score has probably already been affected negatively, but there is light at the end of the tunnel. You can find hope with debt solutions. Imagine living your life free of debt; it is more obtainable than you think.
One of the best debt solutions available is debt settlement. Although there are pros and cons to all types of debt solutions, it is important to understand each. What is good for some people may not be good for your situation.
Debt settlement is when you negotiate a deal with the creditor you owe money to. Each company has different guidelines in terms of debt settlement solutions. While some companies may be more than willing to work with you, others might have extremely restrictive stipulations.
When it comes to debt settlement solutions, some creditors may require you to use a separate checking or savings account to make monthly payments for as long as 36 months, until you have paid off your past due balance, and other fees and interest rates. However, others may offer you fast and easy solutions, like one-time payments at a 30% reduced rate of your total balance.
You should be aware of debt settlement solutions that are scams. There are several red flags you can be cautious of when you think you are getting scammed. For example, if the lender charges you any fees before it settles your debts, it is most likely a scam. If they brag about a new government program to bail out personal credit card debt, you should be leery. Scams often guarantee you can make any unsecured debt simply go way or be paid off for pennies on the dollar. If it seems too good to be true, it probably is. Debt settlement scams will also promise that your debt collection calls and lawsuits will stop after you sign their agreement.
Before signing the disclosure requirements of your debt settlement solution, you should receive comprehensive information pertaining to the debt program. This includes the price and terms of the agreement, along with any fees or conditions of such services. The disclosure will explain approximately how long it will take before you start to see results in debt reduction. It may take months or even years.
Some debt settlement solutions will also disclose any offers. This means the company can tell you how much money or what percentage of each debt you must save before it makes an offer for a settlement. Finally, the disclosure will detail what happens in the event of non-payment actions. If you miss a payment, or stop making them altogether, you should be informed ahead of time of the negative consequences.
When you are required to keep your funds in a designated account for payment, you should be aware that the funds are still yours, and you will earn the interest from that bank account. You also have the right to withdraw your funds at any time, even if it means you will miss a payment.
After your debt relief services or debt settlement solutions are fulfilled, the credit card company has the right to report your settled debt to the government. The IRS may now consider this income, which is, therefore, taxable money. However, in some cases, this will not affect you, depending on your financial condition. If you have total debts that are more than the value of your total assets, you are insolvent to this tax consequence.
Since debt settlement solutions and other programs pertaining to debt solutions can be very complex, you should contact a bankruptcy attorney regarding your situation. Even though you are not necessarily filling bankruptcy, the attorney will be able to explain debt settlement solutions. In some cases, debt settlement solutions may not be ideal for your personal situation. You can inquire about debt consolidation, debt negotiation, debt relief, and bankruptcy.
If you decide to hire a lawyer, you will not have to research scams and read all the paperwork alone. Your lawyer will take care of everything, from discussing your options, to talking with lenders, debt collectors, and creditors on your behalf. He or she may be able to get you an even better deal in terms of a reduced payment or interest rate. If your lawyer threatens bankruptcy, the creditors will not get any money you owe them. In this case, they will most likely come up with a deal in order to get some money, opposed to none at all.