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How to select a good debt settlement company?

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Let me tell you guys my situation. Me and my wife have about 60K in debt. It was all originated from the 0% balance transfer. I started to cash those 0% apr balance transfer checks into my checking account and use them un-wisely one year ago. I thought I could pay them off before the 0% APR ends but I lost my job at the end of last year. I don't think I will be able to pay anymore.

I did some research on my own and found 1 good debt settlement company under the the so called "Better Business Bureau"?. It's called the "Solve Debts". Has anyone have any experience with this company?

When they explained the procedure to me, I do realize that it takes about 6 months for them to negotiate with the creditor or the collection agencies. And I have to stop paying any of them to show financial hardship. They usually want to wait until the creditors send those debts to collection agencies so that they can negotiate on the "already-reduced-amount". However, during that 6 months, the interest and late fees add up. And there is no guarantee that the creditors or collection agencies will settle for the less amount. If they don't settle, you will owe a lot more than what you owed before. 2nd, if they accept the settlement and you now have a reduced amount (50%) to be paid off in 3 years. During that 3 years of times, can they stil sue you and take money from wages? 3rd, what about the tax consequence? If I only need to pay 30K of my 60K debt, will that 30K taken as income at the end of the year?

I think I have enough questions. Thank you for spending the times to help me out.




Quote:
if they accept the settlement and you now have a reduced amount (50%) to be paid off in 3 years.

Usually they want the payment in full or at least witin 3 or 4 months time. But maybe your company can help with this.

Quote:
If I only need to pay 30K of my 60K debt, will that 30K taken as income at the end of the year?
Yes, this is considered income and the credit card may send you a statement (can't remember what form). If they do send this statement, you will have to claim it on your income tax. This may take up to a year in some instances.

Quote:
During that 3 years of times, can they stil sue you and take money from wages?
If they settle and agree to the payment plan of 3 years, get it in writing that way if they try to take you to court you have the proof.

Hope this helped.

Sub: #1 posted on Sun, 07/06/2008 - 15:00

spatterson_40 spatterson_40

(Posts: 400 | Credits: 55.28)

They are supposed to send you a 1099 form for the forgiven amount of debt. However, if you are considered to be "insolvent" at the time that the debt is forgiven, then I don't think you have to claim it as income (I'm not sure exactly how that works, but undoubtedly the IRS has some kind of form for that!).

Sub: #2 posted on Mon, 07/07/2008 - 03:46

alias1958 alias1958

(Posts: 1230 | Credits: 79.88)

Yes that is the name of the form. Thanks alias, I could not remember it for the life of me. I settled two cards last year and never recieved a 1099 but we will see this year. If I do get one, I will be going to a someone that knows about these things to help me out with it.

Sub: #3 posted on Tue, 07/08/2008 - 01:32

spatterson_40 spatterson_40

(Posts: 400 | Credits: 55.28)

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