Steps for Approaching a Debt Settlement Negotiation
If you are considering debt settlement as a possible option, what should you be considering as you decide whether this is the right decision for you? Further, what steps will you need to take in advance of the debt settlement negotiations? Debt settlement is one form of debt relief in Georgia that can allow debtors to repay a portion of what they owe in exchange for a clean slate. In other words, you can negotiate with your creditor to pay a percentage of your total debt in exchange for the creditor forgiving the remaining amount.
How should you be making a plan to move forward with debt settlement? Consider the following information from our Lilburn debt settlement attorney.
1. Identify the Debts You Want to Settle
First, it is essential to identify the specific debt or debts that you want to settle. Once you identify those debts, you will need to obtain the payoff amount or the total debt you owe. In identifying these debts, it is also important to determine whether the debt is past-due or delinquent or has gone into default.
You should also determine with certainty whether the original creditor remains the creditor, or whether the debt has been sold to another creditor or a debt collector. The party that currently owns the debt will be the party with whom you will need to negotiate a debt settlement agreement.
2. Know the Amount You Can Offer to Settle the Debt
Next, you will need to look at your finances and determine the maximum amount you can ultimately pay to settle the debt. You should also consider the lowest amount you may want to offer. Keep in mind that debt settlement often requires an up-front, lump sum payment of the negotiated settlement amount.
3. Understand and Plan for the Tax Consequences of Debt Settlement
You will need to plan for the tax consequences of your debt settlement agreement. As the IRS explains, any forgiven or canceled debt is taxable. That means you will need to pay income taxes on the total amount as if it were income.
4. Work with a Lawyer Who Can Negotiate Your Final Settlement Amount
Begin working with a lawyer who can negotiate your final debt settlement amount. While it is possible to negotiate with a creditor on your own, a lawyer has experience with these types of negotiations and can almost always get you a better agreement.
Contact a Georgia Debt Settlement Lawyer for Help with Your Debt Settlement Planning and Negotiations
Are you considering debt settlement? If so, you should have legal counsel on your side to assist with every step of the process from planning to negotiations. You can reach out to an experienced Georgia debt settlement attorney at Konn Law Firm LLC in Lilburn today for assistance. We have years of experience helping debtors in the Lilburn area with debt settlement negotiations, and we are here to assist you through the process. We can answer any questions you have about debt settlement or about your circumstances specifically. Once you are ready, we can begin negotiations with your creditor or creditors. Contact us for additional information.
Source:
irs.gov/taxtopics/tc431
