I'd like to ask a question regarding debt settlement of student loans. There were a few different ones, stafford, perkins, pell etc. Now they are owned by the Dept of Education. If the loans, went into default, say, 15 years ago and the principal balance amount plus the accrued interest at the time were, say, k 50, the interest must have grown considerably over the years in which the debt was paid. Now, my question is whether the 40 - 60 percent that you can expect to pay or save in the process of debt settlement would be calculated from the original principal amount and accrued interest form 15 years ago -- k 50 -- , or would it be calculated based on what would be owed now, which might be at least twice the original amount and still growing. If so, it would make such settlement much less attractive or perhaps even impossible to do, regardless of how well-intentioned the borrower might be or how willing to repay the debt. I would appreciate if you could clarify that matter for me. Thank you.
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Some creditors and collection agencies refuse to lower the pay off amount, interest rate, and fees owed by the consumer.
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Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.