When you are in debt and feel overwhelmed by the immensity of the growing accrued interest and late fees on your debts, it might seem like declaring bankruptcy is your only option. However, this is not true. Bankruptcy is appropriate in certain situations, but there are many instances in which alternatives to bankruptcy are viable solutions to your debt problems. Debt settlement is one very effective bankruptcy alternative that has a minimal impact on your credit score.
The experienced debt settlement attorneys at the Law Offices of Kenechi R. Agu will work with your creditors to negotiate a debt settlement that will forgive a portion of the amount owed in exchange for a lump sum payment or installment payment plan. Debt settlements are limited to only unsecured debts, i.e., debts that are not secured by real property like houses or automobiles. A debt settlement can help you avoid bankruptcy and will help lower the amount of outstanding debt you have. Additionally, settling your debts has a positive impact on your credit score too. Below is a list of some of the negotiable unsecured debts that can be resolved through debt settlement agreements:
- Credit card debt;
- Delinquent cell phone bills;
- Overdue medical bills;
- Vehicle repossessions;
- Business debts;
- Private student loans;
- Accounts in collections; and
- Other unsecured loans.
Things to Keep in Mind About Debt Settlements
When you settle a debt, it is important to remember that there will be tax implications for the amount that you were able to avoid paying. This is called a discharge of debt, which is treated like income for tax purposes. It is important to plan ahead and be prepared when tax season comes around.
Using a debt settlement service, rather than an experienced debt settlement attorney, can be risky, since many debt settlement companies are scams. When you are dealing with debt, it is a waste of your resources to pay for a scam. It is better to put your funds to constructive use and hire a lawyer with the skills and knowledge to get you out of your messy debt.
Another consideration is that debt settlement negotiations may not go well, and you may ultimately have to file for bankruptcy. It is important to keep this in mind as you approach debt settlement negotiations, and to not set your hopes on a settlement agreement, because you might end up disappointed. Filing for bankruptcy can help you overcome your debts, but bankruptcy will also have an adverse effect on your credit score that will last a very long time.
Contacting a Debt Settlement Attorney
We at the Law Offices of Kenechi R. Agu understand that people go through tough financial times, and that debt can get out of control. When you find yourself in need of debt relief and credit repair, please do not hesitate to contact the lawyers at the Law Offices of Kenechi R. Agu. We will work hard to negotiate a debt settlement that suits your needs and helps you alleviate some, if not all, of your debt worries.