Getting Maximum Debt Relief and Avoiding Trouble With Debt Settlement
Credit card debt is a major problem for American households; the nationwide total amount of credit card debt is more than one trillion dollars. With interest rates consistently high, it is harder than ever to pay down your credit card debt. There are several ways that you can reduce your monthly payment, and several other ways to reduce the total amount you will have to pay before your debt is resolved. Settling your debt with a credit card debt forgiveness company can help you accomplish both goals. Of course, debt settlement has its risks, as does any arrangement where you agree to repay a debt. If you are considering debt settlement through a credit card debt forgiveness company, contact a Plantation debt lawyer.
How Debt Settlement Can Help
Debt settlement companies offer credit card debt forgiveness programs where the debt settlement company enters an agreement with the credit card issuer in which the issuer promises to forgive the remaining balance if the borrower pays X amount toward the debt. The borrower then pays X amount to the debt settlement company in installments, and when he or she has paid the last installment, the debt settlement company pays it to the credit card issuer and settles the debt.
Even though it can take more than a year to settle your debt through a credit card debt forgiveness company, you begin to feel the relief immediately. The installment payments that you make to the debt settlement company are lower than the payments you had been making to your credit card issuer before you applied for credit card debt forgiveness. If you decide to withdraw from the debt settlement agreement, the credit card forgiveness company will refund the money you paid. Reasons that borrowers withdraw from credit card settlement agreements include deciding to file for bankruptcy, and therefore to discharge the credit card debt, and getting a new job with a high enough income where they can pay down their credit card debt without settling for a lesser amount.
What Can Go Wrong With Debt Settlement?
Debt settlement is not a freebie. Settling a debt for less than the face value amount has a negative effect on your credit score. Furthermore, the IRS counts any amount of forgiven debt in excess of $600 as taxable income. Likewise, failing to keep up with payments to a credit card debt forgiveness company is as bad for your finances as defaulting on any other debt. If you cannot keep up with the payments on your credit card debt forgiveness agreement, you should contact the credit card debt forgiveness company and ask to renegotiate the agreement. The company will usually be willing to work with you and make your monthly payment even lower.
Work With a Debt Lawyer About Settling Your Credit Debt
A South Florida debt lawyer can help you make wise decisions about settling your credit card debt through a credit card debt forgiveness company. Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.
Source:
cbsnews.com/news/credit-card-debt-forgiveness-dos-and-donts/
