Debt Settlement in Maryland

Debt Settlement offers the best alternative for Maryland consumers writhing helplessly on the threshold of bankruptcy. So, if you are a Maryland resident burdened with heavy debts but do not want to lose your assets, then a debt settlement program is just the solution for you!

How to get your debts settled in Maryland?

Debt settlement is a debt relief option where in the creditor accepts a reduced sum of money from the debtor that it is regarded as repayment in full. The process of debt settlement in Maryland is no different from those in the other states.

Here are the ways in which you may get your debts settled here in Maryland:

By directly negotiating with your creditors

OR

By seeking services from a bona fide debt settlement company

How can Maryland debt settlement companies help you?

The debt settlement services offered by BBB affiliated debt settlement companies in Maryland are tailored to keep up with the varied requirements of Maryland debtors. Their services provide the best mix of debt reduction, late-fee elimination, and credit management, in order for you to achieve a permanent solution to your debt woes.

All you need to do is enroll with a bona fide debt settlement company and take your first step towards a debt free life. Here is how a company takes care of your debt issues step by step:

1. When you enroll with a debt settlement company, one of the company's debt settlement attorney will evaluate your debts and your finances.
2. Then the settlement lawyer informs your creditors that from now on all your debt issues will be handled by the company. Your creditors are also asked to stop all communications with you, in order to ensure you receive no more harassing collection calls.
3. The debt negotiation attorney of the company starts negotiations with your creditors. The lawyer with his/her negotiation expertise effectively gets your late fees, over-limit charges eliminated, and debt principal substantially reduced. A sum that it is acceptable to both you and the creditor is agreed on. Efficient debt negotiation could also get your debt reduced up to 60%.
4. If the creditor insists for on a larger sum, the debt negotiation lawyer negotiates a suitable repayment plan for you.
5. The repayment plan usually requires you to pay a particular amount to the company every month. Your finances accrue in a special account opened by the company, until sufficient money is saved to repay at least one of your creditors. The process is then repeated until all your debts have been repaid.

A BBB accredited settlement firm thus offers you the most reliable debt settlement options, with reputable lawyers to guide you through the process.

How can you negotiate with your creditors directly?

If you are not interested in paying the additional expenses of hiring a debt settlement service, then why not get your debts settled by yourself? Wondering how? Well, it is not difficult, if you have the right attitude to deal with your creditors.

Follow these few simple steps and get your debts settled by negotiating directly with your creditors:

• Know the law: Learn about Maryland's consumer protection laws.
• Convince your creditor about your weak finances: Next, inform your creditor about your faltering financial state. Try and convince him that your present finances are insufficient for you to continue with your monthly installments. The creditor needs to understand that you are financially strapped and might end up declaring bankruptcy soon. Creditors are aware that they might end up getting nothing if a debtor declares bankruptcy, and will get part of what they are owed with a settlement. Thus it is important to convince your creditors about the state of your finances.
• Offer a large settlement amount: Whenever you decide on settling your debts with the creditors try and offer a large settlement amount. Creditors are likely to accept your proposal for settlement, if they are sure of getting a large lump sum payment from you.
• Offer a repayment plan: Propose a repayment plan if you think you cannot pay settled amount at once. A debt settlement plan would enable you to pay off the settled sum in affordable installments.
• Ask the creditor to report your debt as "settled": On completion of the settlement process, make sure your creditor reports your debts to the Credit Bureau as "settled" or "paid". It is important as that would add an immediate boost to your credit score.

Average duration and cost of the settlement programs in Maryland

The average duration and cost of debt settlement programs in Maryland depends on the following:

• The kind of debts you want to settle
• The outstanding debt amount that you want to settle
• The total number of debts that you intend to settle

The greater the amount of outstanding debt, the more settlement will cost. A normal case of credit card debt settlement case can take around 3-9 months to get through; while other kinds of debts typically get settled within 1-3 years.

Effect of Maryland debt settlement on your credit score

Debt settlement, like any other debt relief option has a direct impact on your credit score. The extent of the impact is primarily decided by the following factors:

1. The delinquency of your accounts.
2. Your current credit score.

If you settle your delinquent debts, it will increase your credit score immediately, especially if these accounts appear as "paid off"/ "settled" on your credit report.

However, opting for debt settlement does not necessarily imply that you have a poor credit score. You may choose debt settlement even if you have a good credit score. The driving reason that propels a debtor towards debt settlement is their inability to continue with monthly payments.

Therefore, debt settlement could be beneficial even if you do not have delinquent debts and your credit score is in a good shape. The moment you start settling these debts, your credit score lowers as your accounts go delinquent. But that is just a temporary phase. On successful completion of the settlement program, your score increases again. That puts you in a better position than someone who has been lagging behind on his debt repayments.

Thus, debt settlement in general, strives to give you a healthy credit report.

Advantages of Maryland Debt Settlement

A debt settlement program in Maryland would help you reap the following benefits:

• Avoids the pitfalls of bankruptcy.
• Causes you to pay just the qualifying amount, unlike debt consolidation and credit counseling.
• Puts an end to harassing collection calls from creditors and debt collectors
• Makes way for an improved credit score
• Since you pay less, you actually end saving up quite a bit

Tax Consequences

The IRS considers any forgiven debt amount to be taxable income.

On the completion of the debt settlement process, your creditor must report your forgiven amount to the IRS and send you a 1099C so that you can report the income on your Federal income tax return.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a qualified attorney for advice on your specific situation.