Debt. What To Know Before You Explode.

What Is Debt Settlement?
Debt Settlement is a legal way to reduce the amount of unsecured debt that you owe. It is an aggressive, proven approach that can reduce the amount of debt that you owe and is a viable alternative to bankruptcy.

The debt settlement process allows you to get help to negotiate with your creditors and set aside money for a lump-sum payment so you can pay off your debt. After the debt is settled, you will get a letter from your creditor saying that the debt has been fulfilled and the creditor will then report that to the credit reporting agencies.

Creditors will often settle with you for less than you owe if you are having financial problems because should you choose to file bankruptcy, then the creditor gets
nothing.

See more information on debt settlement for each state.

Debt Settlement is a way to get out of debt in the shortest amount of time, and with the least amount of money without filing for bankruptcy.

Debt settlement is not without its drawbacks though. The IRS considers a forgiven debt as taxable income, so at the end of the year, you will need to make sure that you work with your accountant to pay any taxes that you owe as a result of the settlement. It is possible to not pay taxes on the settled debt, but you need to work with your accountant for the details on that.

The Debt Settlement process will not leave a gold star on your credit rating. Your credit report will reflect that you are late on your payments during the process and until the debts are settled. Keep in mind – the debt settlement process is the best way to get rid of your debt in the shortest amount of time paying the least amount of money. Yes, it will affect your credit, but it will only be for a short period of time – where the alternative of filing bankruptcy will affect your credit for 7-10 years.

With debt settlement, you can be debt free in as little as 12-36 months and then work on improving your credit score.

Benefits of Debt Settlement
1. Reduce total payments by up to 40%
2. One easy monthly payment
3. Manage calls by debt collectors
4. Debt free in as little time as 12-60 months
5. Reduce or even eliminate charges such as interest or late charges

Is Debt Settlement Right For You?
The only way to know for sure if debt settlement is right for you is to do your homework. You may very well be better off with another alternative such as bankruptcy, but you will never know for sure until you do your homework!