Choosing debt settlement will not only reduce your debt, but will also make your debts manageable.
Debt settlement, like debt consolidation, can be handled on your own, but in order to protect yourself, it can be a good idea to enroll with a debt settlement company.
You can start by doing some research on the companies that you are considering. Check their accreditation with the Better Business Bureau (BBB) and for feedback from previous clients. This will help you avoid fraudulent companies.
Settlement options in Arkansas help in reducing your bills to 40-60% of your original debt amount. Depending on your ability to pay, you can settle your debts in as little as eighteen months. Sometimes, an extension of forty-eight months is allowed for special situations.
Debt settlement companies offer customized programs for their clients depending on what their clients need. Under these programs they work with your creditors to reduce a part of your outstanding balance, thus reducing your total debt. Debt settlement options vary depending on your situation, the amount of your debt, and income.
There are a lot of advantages of debt settlement. To mention the few basic benefits:
The time it takes to complete the debt settlement process in Arkansas depends on the amount of money you pay each month. The more you can pay, the sooner your debts will be settled. Normally it takes around 15 to 36 months.
It is always advisable to plan out and resolve your debts with professional guidance to help you eliminate your debts safely. A debt settlement attorney in Arkansas can give you all the help and support to become debt free!
When most people are considering debt settlement, they know they have a poor credit score. When you enroll in a debt settlement program, your credit score does not go up overnight. But once you start making payments on the settled amount of debt, your credit score will improve.
Debt settlement is a better alternative than filing for bankruptcy. When filing for bankruptcy your credit report gets completely destroyed and it is nearly impossible to build back up quickly. The negative impact of debt settlement is much better than that of bankruptcy and repairs quicker.
Therefore, debt settlement will not leave your credit score completely destroyed. You just need to look out for the right company and/or lawyer who have the expertise to handle your case. If your choice is right nothing else can go wrong!
Creditors have to report the settled/canceled debts the Internal Revenue Service (IRS). Debt laws exempt you from tax payments if you are insolvent at the time of debt settlement. IRS states that if your assets (what you own) exceed your liabilities (what you owe) then you can declare insolvency.
If you are solvent (your assets are more than your liabilities), then you have to pay taxes on the amount of debt forgiven by your creditors on line 21 of a 1040 or 1040A.
Last Updated on: Wed, 7 Sep 2016