Debt settlement is where a creditor agrees to accept a reduced amount in satisfaction of an outstanding debt. Most companies that you owe money to realize that if you were to file bankruptcy they would receive very little if any money. Consequently, these companies are often willing to accept a lesser amount. In return, you pay off your debt at a reduced rate and avoid filing bankruptcy.
We can negotiate settlements for many types of debts including: credit card debt, mortgage and HELOC debt, SBA loans, business debt, medical bills, personal loans, and more.
If you have money set aside or large assets, you may be a good candidate for debt settlement. Debt settlement involves making a lump sum payment to each of your creditors. Some individuals have money set aside such as money in savings or a retirement account, while others require a payment plan. Our debt settlement plans typically run from (6) to thirty-six (36) months in length.
The unpaid balance of the debt is forgiven by the creditor after the settlement amount is paid. Amounts forgiven in debt settlement do appear as taxable income for income tax filings.
While bankruptcy is often our client’s best option, there are situations where we recommend debt settlement. In particular, clients who have large assets or cash available may want to look at this to reduce amounts paid to creditors. Ordinarily, we will discuss with you in your bankruptcy consultation if we do feel it is your best route. If you think debt settlement is right for you, feel free to ask more questions when you come in for a no obligation consultation.
