Is Debt Settlement Right for Me?
Financial difficulties impact most Georgia residents from time to time. Yet for many Georgia residents, struggles with debt become ongoing and all-encompassing. If you are struggling with debt, you might have already investigated some of your potential options. For example, you might have considered a substantial personal loan to pay off several different credit cards. Or you might have read about personal bankruptcy options. In doing research, you may have learned more about debt settlement, too. How can you know if debt settlement is the right decision for you? Our Lilburn debt settlement lawyers can discuss some important considerations with you.
Do You Have a Plan for Paying Off Your Debt?
Do you currently have a plan for paying off your debt, or is your debt likely to continue to accrue due to high interest rates on credit cards and other loans? If you are only making the minimum payment on credit card debt each month, or if you are behind on credit card payments and loans with other creditors, it could be a good time to consider debt settlement. Debt settlement is beneficial for consumers who do not expect to be able to pay off their debts in a timely manner.
Can Your Debts Be Settled?
Before you begin planning for debt settlement, it is important to speak with a debt settlement attorney to determine whether your debts can be settled. As an article in Business Insider underscores, it will be important to determine whether your creditors are willing to negotiate and to consider debt settlement. In order for debt settlement to happen, creditors must agree to take a payment of less than what they are owed and forgive the remaining debt. Your lawyer can represent you in this negotiation process.
Are You Able to Repay a Portion of Your Debt and Taxes Associated with Forgiven Debt?
Finally, if you do enter into a debt settlement agreement with creditors, will you be able to repay the agreed amount and account for paying income taxes on the forgiven debt? In order for debt settlement to ultimately give you a fresh start, you will need to make the financial aspects of it work. You will need to pay an agreed-upon amount at first to settle the debt or debts. Then, any amount that is forgiven by your creditor or creditors will be taxable. Accordingly, at tax time, you will need to pay taxes on the amount of forgiven debt as if it was earned income.
Contact a Georgia Debt Settlement Lawyer
Debt settlement can be beneficial for many different kinds of consumers in Georgia. After debt settlement, many debtors are able to begin rebuilding credit and to remain on track financially. To find out more about whether debt settlement could be a good option for you, it is important to seek legal advice. An experienced Georgia debt settlement attorney at Konn Law Firm LLC can speak with you today about your financial circumstances. If you want to move forward with debt settlement, we are here to assist you. Contact our firm today for additional information.
Sources:
businessinsider.com/personal-finance/credit-score/what-is-debt-settlement
irs.gov/taxtopics/tc431
