If you feel like you are drowning in debts, then coming to suitable arrangements with creditors can help you immensely and you will be well on the way to settling your debts.
A debt settlement plan otherwise known as debt negotiation, allows the amount of money that you owe to be lowered considerably in order to reduce the overall amount. If a small amount is paid regularly, eventually your debt will be gone completely. Negotiating with creditors can be very difficult and the professionals (debt management companies) know how to do this, so it is best left to them. Along with negotiating with the creditors, the qualified debt management companies can also give you advice and help you reduce the total amount that is owed.
How to get started
If you have made the decision to sort out your debts by going through a debt management company, then it is fairly easy to get started. If you are worried and anxious about your overwhelming amount of debt and struggling to make payments, you must do something now or it will only get worse. If this describes you, then in my opinion – debt settlement through a debt management company is your only option.
You need to find a trustworthy company that have a good reputation to help you with your debts. By having them on you side, you can have the peace of mind in knowing that your settlement plan will be a fair one.
You will discuss your financial problems with the company and get it all down in writing. And then you will work together to come up with a plan that is affordable for you. Once this is discussed with the creditors and they have agreed, each debt that you have will be paid off one by one.
If the case is such that it is the first time that you have defaulted on your debt installment, you could be eligible for IRS’ Fresh Start Program. You could get in touch with firms such as Clean Slate Tax and alike, in order to get a clear idea about the eligibility for the program.
Make sure that you aware of everything that is happening, and exactly where your money is going. Everything should be in writing, and all parties that are in the arrangement should sign that agreement.
There is no legal requirement on either side that says a settlement deal has to be followed through on. Forgiven debt is considers as income so make sure that you declare it because it is usually taxable.
What happens afterwards?
In terms of your credit score, then it may drop slightly after a debt settlement plan. However it may not be worse than the damage then what was already existing and wouldn’t you rather be debt free then up to your eyes in it? Once your debt is gone then you can start to work on rebuilding your credit score.
Using a debt management company could well be the best decision you ever make. Bankruptcy is a terrible thought and it can be avoided. By settling your debts and stopping this happening, your life will be so much happier.
This guest post was provided by DebtSuccess.com, the debt management experts specializing in debt consolidation, debt relief, credit repair, tax debt, debt settlement and more.