Despite popular belief, debt settlement is not a great alternative to filing for bankruptcy. Debt settlement give you the relief you are seeking, due to increased enforcement and regulation. Debt settlement is not consumer-friendly because there are a number of long-term consequences to settling one’s debt. In fact, there are also a number of hidden effects to settling one’s debt such as tax bills on the forgiven debt, high interest rates, and extremely low credit scores.
The following are more comprehensive reasons why debt settlements are a bad alternative to filing for bankruptcy:
- Negotiations can be extremely drawn-out, as they can extend to up to 3-4 years. This means there is a risk of being sued over one’s debts before they are settled.
- Oftentimes, these debts are only settled for 45-50% of the current balance, including late fees and interest. This means this forgiven debt is now taxable as income once it is reported to the IRS.
- If you can afford to pay your bills, debt settlement and bankruptcy are probably not for you. However, when your debt is unmanageable, filing for bankruptcy may work for you. But as you can imagine, every situation is unique, which is why it is best to consult with an attorney before making any permanent financial decisions.
Contact Our Experienced & Reliable Mesa Bankruptcy Lawyers Today
Are you in a tough financial situation and considering filing for bankruptcy? If so, look no further than the Law Offices of Campbell & Coombs P.C. for a results-driven legal team with the skill and tenacity necessary to advocate on your behalf. Our Mesa bankruptcy attorneys will do everything in their power to ensure your financial situation is resolved as (Omit) successfully. as possible, as (Omit) Finding a comprehensive and capable solution to your financial situation is our goal.
You can reach a member of our team to schedule a free initial consultation with one of our attorneys by calling (480) 568-2333.