Are you lagging behind on your payments? Repeated defaults and abusive collection calls have become a part of your daily life, and you are desperately looking for a solution? If that is your condition, then considering debt settlement will put an end to your troubles.
Debt Settlement is a debt reduction program where the creditor accepts a reduced amount from the debtor that is regarded as payment in full of the obligation.
You can settle your debts in North Carolina either by directly negotiating with your creditors or by hiring a professional debt settlement service.
The very idea of negotiating with creditors without any professional assistance might appear insurmountable to you. Yet, you may want to give it a try and save all the added costs of hiring professional help. You might not be a skilled debt arbitrator, but you can negotiate with your creditors and get your debts settled.
Here are a few simple steps you should follow in order to settle your debts:
So the negotiation process seems a little hard for you to manage on your own? But you badly need to reduce your debt burden? Wondering what to do? Do not worry. You can get your settlement done by hiring a debt settlement company, with Better Business Bureau (BBB) accreditation in North Carolina. A good BBB accreditation score assures that you are getting quality service.
A debt settlement company can provide professional debt negotiation services that can get your debts substantially reduced. Once you enroll in a settlement program, you will have to pay a small upfront fee. Before you enroll, the company will thoroughly review your financial situation. Then, the company's debt settlement attorney will notify your creditors to stop contacting you.
The company will create a trust account to help you save up for a lump sum settlement. Once enough money is saved, the debt arbitrator will negotiate with your creditors to reduce your debt principal, along with your interest and penalties.
Experienced debt settlement lawyers and skilled debt arbitrators can get your debts reduced up to 60%.
If the creditor insists on a larger amount, the company will also devise a payment plan that will help you to pay off the settlement amount in installments.
Most settlement programs do not include debt repayment only. After your debts are settled, the company will also ensure that your accounts are reported to the credit bureaus as "paid" or "settled", so that your credit scores will improve.
Debt settlement scams are quite common. Many settlement companies indulge in scam activities to extract money from the clients. This can get you deeper in debt.
Therefore, it is extremely important to make sure that the debt settlement company you intend to hire is a reputable one.
Here are some tips on how to judge a debt settlement company:
The average duration and cost of debt settlement programs in North Carolina depends on:
A typical credit card debt settlement case will take 3-9 months to get settled, while other kinds of debts take around 1-3 years.
Debt settlement does not affect everyone in the same way. Its impact on your credit score will depend on:
If you settle your delinquent accounts, your credit score will increase automatically. This is because with settlement, these accounts will appear as "paid off"/ "settled" in your credit report.
Even if you do not have a bad credit score, and your income is steady, you can consider debt settlement. When you settle your non-delinquent debts, your credit score drops initially. However, the effect is temporary. On successful completion of the settlement program, your score will rise again.
Debt settlement in North Carolina gives you the following benefits:
Debt settlement is taxable. Any amount forgiven in a debt settlement program is taxable unless you can prove you were insolvent on the day before your debt was forgiven.
As soon as your debts get settled, your creditor must report your forgiven amount to the IRS and send you a 1099C form before April 15th of the year your taxes must be reported in, so that you can report the income on your Federal income tax return. If your creditor does not send you the form then you must notify the IRS about the forgiven amount yourself.