What is Debt Settlement?

Debt Settlement occurs when a creditor agrees to allow a borrower pay a less amount than initially agreed upon. However, this action damages your credit score and makes you a less favorable future loan candidate. If you are thinking about settling a debt, do not wait until you are six months delinquent as this makes you appear completely not trustworthy. Just because a creditor marks your account as “charged- off”, it does not mean you no longer owe the creditor. This is very different from written off, where the debt is no longer important.

The only way a settlement can occur is if you, the debtor (with the help of an attorney) can prove to the creditors that you cannot possibly pay off the debt without a settlement. The creditor will acquire information regarding your income, expenses, checking accounts, savings accounts, employment, credit history, etc. Then, once the creditor determines that you in fact need a settlement otherwise they will never see their money, you will be granted a settlement. You must be aware of the fact that any time a settlement for which debt forgiveness is greater than $600, the money owed becomes taxable. Thus, do not expect a tax return if you still owe someone under a settlement.

If possible- try to manage your debt before settling, as a well thought out debt management plan will be more beneficial for you in the long run. Not only will you be able to retain your high credit score, but you will also learn a new way of managing your finances.

Fridlin & Associates, P.C.

1517 Voorhies Ave, Suite 4

Brooklyn, NY 11235

(718) 372-4400

loan forgiveness debt reduction

Advertisements

Published by

ElaineFridlinEsq.

Fridlin & Associates, P.C. is a financial law firm for individuals and small businesses in metropolitan New York. If you or your business face a problem concerning bankruptcy, debt settlement, loan modification program, the sale and purchase of residential or commercial real estate, landlord/tenant disputes, enforcing your rights as a creditor, the sale and purchase of a business, or employment litigation, Fridlin & Associates stand ready to provide the solution that protects your best interests. We can help you: Eliminate Debt! Stop Foreclosure! File for Bankruptcy! Apply for a Loan Modification Program! Stop Wage Garnishment! Stop Lawsuits! Eliminate Judgments! Eliminate or Reduce the second mortgage on your home! Reduce the mortgage on your investment property to its fair market value! Eliminate your obligation to pay creditors and medical expenses! Eliminate business loans! Release Frozen Bank Accounts! Stop harassing phone calls! Please call 718-372-4400 today for a free consultation. We have appointments available Monday through Friday and your first visit is free. Fridlin & Associates, P.C., also provides legal representation on wage dispute matters under the Fair Labor Standards Act in both federal and state courts. Learn more about Elaine Fridlin and Fridlin & Associates here. If you’re interested in bankruptcy as a potential solution to your debt management problems, you can learn more about bankruptcy for both consumers and businesses here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s