If you are unable to file for bankruptcy, don’t worry. There may be another way to resolve your outstanding debts. Debt settlement is where a creditor agrees to accept a reduced amount in satisfaction of an outstanding debt. Most companies that you owe money to realize that if you were to file bankruptcy they would receive very little, if any, money. Consequently, these companies are often willing to accept a lesser amount. In return, you pay off your debt at a reduced rate and avoid filing bankruptcy.
This process involves making a lump sum payment to each of your creditors.
The unpaid balance of the debt is forgiven by the creditor after the settlement amount is paid. Amounts forgiven in debt settlement do appear as taxable income for income tax filings. You would need to work with your accountant to determine if you would in fact pay any tax on the forgiven debt.
If you think debt settlement is right for you, feel free to ask more questions when you come in for a no obligation consultation.
Contact us today if you have any questions regarding debt settlement