Debt settlement is a good option for you or not, you must take your decisions based on the pros and the cons of settlement. This article will actually deal with the debt settlement pros and cons and will help you to identify the right option. Most important of all is the fact that you need to know that settlement is a financial decision now which will impact your future well being. One wrong step can lead to troubles which are beyond measurement.
Debt settlement is a good option for me - the pros:
Listed here will be few generic goodies of debt settlement which will apparently make you and any consumer think that debt settlement is the option that will suit your requirements the best.
There are no legal hassles in this method and even if there are some, the professional negotiator will deal with the same.
Considering these, you can easily think that settlement is the option that will work out best for you. Let us now find out whether settlement is going to impact you adversely or not.
Debt settlement is not a good option for me - the cons
This is something that you need to consider pretty seriously. Remember that your financial move is watched and recorded and there are no exceptions.
Debt settlement is a good option for me - the pros:
Listed here will be few generic goodies of debt settlement which will apparently make you and any consumer think that debt settlement is the option that will suit your requirements the best.
There are no legal hassles in this method and even if there are some, the professional negotiator will deal with the same.
- The method is completed within 1-3 years.
- Around 50-70% of the loans are eliminated using this method.
- The credit score will remain unaffected.
- You will remain as a prime consumer after the dues are settled.
Considering these, you can easily think that settlement is the option that will work out best for you. Let us now find out whether settlement is going to impact you adversely or not.
Debt settlement is not a good option for me - the cons
This is something that you need to consider pretty seriously. Remember that your financial move is watched and recorded and there are no exceptions.
- Money that you save through settlement is taxable if it exceeds $600. You cannot avoid this and you will have to give the details of the amount of debt that is forgiven along with your income and expenditure and other liabilities to the IRS. Failure to do so can bring unwanted legal measures working against you.
- If you want to avoid taxes, you must be insolvent at the time of settlement. This means that the total value of your assets taken together must be less than the total money you owe. If not, you will be taxed and not paying income tax will mean legal consequences.
- You need to make sure that there is a steady way of saving money and accumulate the same to pay to the creditor at the end of the negotiation. Failure to repay the settlement amount will make the agreement null and void and you will then have to pay the debt in full.
