Is Credit Card Debt Settlement Worth It?
When you are struggling with credit card debt, you may be considering multiple options to help alleviate the financial strain you are under. You might be considering bankruptcy. Or you might be considering debt consolidation. At the same time, you might be thinking about debt settlement and wondering if it is the right option for you. A recent report from CBS News discussed debt forgiveness (which is part of a debt settlement negotiation) and whether it is worth pursuing. If you are considering credit card debt settlement with some credit card debt forgiveness, what do you need to consider? Our Lilburn debt settlement lawyer can tell you more below.
Considering the Benefits of Credit Card Debt Settlement
There are numerous benefits of credit card debt settlement to consider.
First, the process works by negotiating a settlement amount with the creditor or debt collector for an amount that is only a portion of what you owe. You then pay that agreed-upon settlement amount in exchange for the creditor or debt collector forgiving the remaining amount of debt you owe. Accordingly, you may be able to have thousands of dollars forgiven.
Second, once you have paid the settlement amount and your remaining debt is forgiven, you will not be liable for any of that debt. The forgiven amount is exactly what it sounds like — it is forgiven and you are not liable for it.
Third, once your debt is settled and you are no longer liable for the amount, you will not be contacted by creditors or debt collectors about that debt. Moreover, you will not be at risk of wage garnishment or a lawsuit or other collection actions.
Potential Limitations of Credit Card Debt Settlement
Is credit card debt settlement worth pursuing? There are many benefits as we discussed above, but there are some limitations to consider.
First, you will need to be able to afford to make a payment for the agreed-upon settlement amount. If you cannot make a payment for a portion of the debt you owe, it is unlikely you will be able to settle your debt. If you can make the payment, you will obviously be out that amount of money. In addition, you should know that any amount of debt that is forgiven is taxable. As such, you will need to pay income taxes on the forgiven amount as if it had been income. Usually this amount is not going to be insurmountable, and you may be able to work out a payment option.
On the whole, if you can afford debt settlement and the creditor or debt collector agrees to a reasonable settlement amount, it is likely worth it to be debt free.
Contact a Lilburn Debt Settlement Attorney to Discuss Your Options Today
Anyone who is struggling with credit card debt and who may be able to afford a debt settlement payment should consider this option. As we discussed above, you can have a portion of your debt forgiven in exchange for a payment that is only a percentage of what you owe. Although you will need to pay taxes on the forgiven amount, credit card debt settlement is almost always worth pursuing. An experienced Georgia debt settlement lawyer at Konn Law Firm LLC can discuss your specific circumstances and your debt settlement options. Contact us today to begin working on debt settlement negotiations so that you can be free of your credit card debt in the near future.
Source:
cbsnews.com/news/is-credit-card-debt-forgiveness-worth-pursuing-in-2026/
