Insider Secrets to Negotiating Debt
- Author Andy Faria
- Published April 11, 2010
- Word count 414
Debt Settlement An Overview
Consumer debt, particularly credit card debt, is the highest it has ever been in the United States. Most Americans view credit cards as a way to make ends meet in tough times. However if you suffer a loss of income, illness or divorce you may find those tough times become even more strained. A debt settlement program, designed for consumers having trouble keeping up with monthly minimum payments is the only way to settle your debt on your own terms.
Debt settlement is a method of debt management in which the debtor and creditor reach a mutually agreeable amount to accept as payment in full for an amount less than the full balance. Your debt will be satisfied and your credit profile will reflect as that.
Debt Settlement is the best way to eliminate unsecured debt. Unsecured debt is any debt that is not tied to any property. Examples of unsecured debts are credit cards, retail store cards, medical bills, and personal loans.
Debt settlement does not work with secured debts. A secured debt is any debt that is tied to any kind of property. Examples of secured debts would be home loans, auto loans, etc. These are not eligible for settlement because the creditor will have the option to repossess or foreclose if you default on the debt.
Debt Settlement is for people who are unable to make their minimum monthly payments anymore but can afford a lower amount to set aside towards settlement. The faster you accumulate funds in your settlement reserves, the faster you will be able to settle your debts.
Debt Settlement Benefits:
o Save Money. Its possible to save 40-80 percent.
o The program is based on what you can afford
o You're in control. The creditors don't determine when and how you pay them back, you do.
Debt Settlement Concerns:
o If you have a great credit score now, this program will result in derogatory items being placed on your credit report and you will see your score go down.
o If the amount of forgiven debt exceeds $600, your creditors must report it to the IRS on a form 1099C as "Forgiveness of Indebtedness Income". According to information on the IRS website this income can be excluded from your income tax under certain conditions such as insolvency.
o It is very common for creditors to threaten a law suit; however it's very uncommon and quite costly for a creditor to actually win a lawsuit.
The author has been on the front lines of the "economic crisis" since the beginning and continues to fight for consumers nationwide.
Northeast Settlement Group Inc
866-794-1869 Toll Free
Download a FREE Debt Settlement Survival Guide NOW
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