The article gives you some information on The debt settlement process: An easy guide for the debtors. Are you overburdened with the huge amount of debt on your multiple credit cards? If answered yes and if your debt accounts are being turned down to collection agencies, you need to take some solid steps that can ensure a debt free life in the long run.
There are various debt relief options that you can take resort to but when you don’t have enough ability to repay your debts on your own, you may take help of the debt settlement process. If you’re a debtor who has newly fallen into debt due to the excessive misuse of your cards, you have to make sure that you know the entire process before you take the plunge. Here are some points that may clear your doubts.
Get in touch with a trustworthy debt settlement firm: You should work with a trustworthy debt settlement firm while repaying your credit card debts. How would you know that the company that you’re working with is an authentic one? Well, you should check if the company is registered with the BBB and if the company charges unnecessary advance fees from you before even reducing a portion of the balance. Unless you know that the company that you’re working with is an authentic one, you shouldn’t work with it.
Tell them your financial hardship: Unless you tell them the financial hardship that you’re going through, they can’t negotiate with your creditors in order to lower the balance that you owe. You can even write a debt negotiation letter mentioning the exact reason that kept you from making the payments on time. By doing this, you can easily make sure that the creditors waive off a considerable portion off your balance.
They’ll negotiate with your creditors: The debt settlement company representative will negotiate with your creditors and tell them your financial issues so that they may find a good reason for reducing your debts. Once they waive off a certain portion of the debts, the principal amount becomes lower and you’re supposed to repay them in easy and affordable monthly payments.
You start making the payments: Once your balance is reduced by the creditors, you have to start making the payments on your bills so that you can get rid of the debt burden. Don’t default even after the debts as this will trash your credit score.
Pay tax: The forgiven amount is considered as your income and you’ll be subject to tax under the IRS. Therefore, though you may feel that you have saved a lot, you’re still supposed to pay taxes on the saved portion.
Therefore, if you’ve newly acquired debts and you want to go for debt settlement, you can easily go for the debt settlement process. Educate yourself on the process before you take the plunge.