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If you're in debt, you might be looking into a few different options to help get you out. Debt Settlement is one of those options and could work for you, if you understand the pros and cons of it first.

Pros: You could end up paying less than you owe, you may no longer show an open delinquent item on your credit report, and more.

Cons: Your debt may be listed on your credit report as settled instead of paid in full, your forgiven debts could be taxable, and more.

Search on your favorite search engine to find out more information on the Pros and Cons of Debt Settlement so that you can determine whether debt settlement might be an option for you; or if debt management or other options are best. Good Luck!

thanks for the info and tips!

Sub: #1 posted on Fri, 07/16/2010 - 19:52

Mike Walker Mike Walker

(Posts: 4 | Credits: 1.91)

no problem, glad I could help

Sub: #2 posted on Tue, 07/20/2010 - 19:13

Bill Carter Bill Carter

(Posts: 2 | Credits: 1.92)

so, after I checked out the pros and cons of debt settlement, I realized that I might want to look into another option - any thoughts?

Sub: #3 posted on Thu, 07/22/2010 - 19:23

Mike Walker Mike Walker

(Posts: 4 | Credits: 1.91)

What other options are you thinking about - bankruptcy? For me those were the only two options.

Sub: #4 posted on Thu, 07/22/2010 - 20:06

Debt Free to Be Debt Free to Be

(Posts: 412 | Credits: 52.11)

maybe debt management?

Sub: #5 posted on Fri, 07/30/2010 - 21:32

Mike Walker Mike Walker

(Posts: 4 | Credits: 1.91)

Just to clarify, when you do a debt settlement program, the payments that you are sending in are put into a trust account until enough money has accumilated in that trust account where your balances are able to be negotiated with your creditors.

Not all creditors agree to settle & depending on the laws in your state & depending on how pass due the debt is, creditors can try to pursue legal action against you to collect on the debt.

When you do a debt settlement program, your accounts have to go into a "Charge off Status". A charge off will adversely hurt your credit rating for seven years.

You are also correct regarding forgiven debt. If the creditor decides to accept the settlement, the difference of the balance if it is more then $600.00 is classified as what is called "Forgiven Debt", someone has to pay taxes on it. Since the creditor forgave the debt, the consumer may have to pay taxes on it. At the end of the year, you may receive a 1099 form in the mail & have to file the "Forgiven Debt" as earned income in your taxes.

You definitely need to way the pros and the cons to see if you want to do a debt settlement program.

A debt management program working with a non-profit organization will assist you with reducing your interest rates on putting you on a payment program based upon what you can afford in your budget. In the event that you are too overextended & the debt management program would not benefit you, other recommendations will be made for assisting the debtor in there situation.

Please feel free to contact me if you would like a free financial analysis & free quote to show you how cost advantages the program would be for you.

Sub: #6 posted on Fri, 07/30/2010 - 23:22

heatherr heatherr

(Posts: 10 | Credits: 4.11)

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