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Debt Settlement in Mississippi

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Has debt consolidation failed to resolve your debt issues? Then debt consolidation is not the solution for you. Lump-sum debts require a better solution and debt settlement may be the answer.

How Debt Settlement works in Mississippi

During debt settlement you or a settlement company negotiates with your creditors in order to lower the amount you owe. A company gives you the assistance of a debt settlement attorney, who does the negotiating for you.

Creditors have a good reason to settle debts with their debtors. By settling the creditor can expect to get back a part of the debt amount, but if the debtor files for bankruptcy their chances of recovering anything are slim.

In Mississippi, the settlement procedure is same in any other state. You can negotiate your debts with your creditors on your own or you can seek help from a professional debt settlement company and get advice from one of their debt settlement lawyers. When settling your debts with a company, the company works on your behalf to negotiate a deal that enables you to pay the minimum amount to your creditors.
If you choose to work with a debt settlement company, always check their accreditation by the Better Business Bureau (BBB), to avoid a scam!

Duration of the Settlement process in Mississippi

How long the consolidation process takes depends upon the total amount of debt, the debt type, and the number of debts that you owe. The usual time period for debt settlement ranges from 1 to 3 years.
Other factors include the time it takes to get approval from the creditor and your ability to met settlement requirements.

How Debt Settlement in Mississippi effects your Credit Score

Debt settlement has a more negative effect on your credit score than debt consolidation does. This is because with debt settlement you repay much less than the amount you originally owed to your creditors.

However, the negative effects are temporary. It depends on how long you take to repay your debts by making the minimum monthly payments. With a well designed debt settlement process, you can settle your debts within a short time period.

Things you should keep in mind when dealing with a debt settlement company

• Read the enrollment and loan agreements carefully. Check them thoroughly for loopholes and hidden costs.
• Ensure that the fees are reasonable and affordable.
• Check the company's past success record. Look at the level of service and customer satisfaction they provide.
• Confirm whether the company accurately reports positive payments to the proper credit agencies in a timely manner.

Benefits of settling your debts with a debt settlement company in Mississippi

• You save time and money.
• You only have to make the minimum monthly payments.
• Relief from creditor harassment and abuses.
• Reduction in original debt amount.
• Improves your credit report.
• Eliminates negative listings from your report.
• Avoids bankruptcy.

Tax Consequences

The federal tax consequences of debt settlement in Mississippi are the same as in other states. Any debt forgiven by your creditors is considered income by the IRS and must be reported on your income taxes unless you can show you were insolvent before the debt was forgiven.

Every creditor who forgives a debt must report that amount to the IRS and state taxing authority and send you a 1099-C before April 15th of the year your income taxes must be reported.