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Debt settlement in Utah

Are you a Utah resident with lots of debt? Are you frantically trying to avoid the pitfalls of bankruptcy? Debt Settlement could be the answer!

Debt Settlement is a simple and easy debt process where the debtor and creditor agree on a reduced sum of money that will be regarded as payment in full.

How debt settlement works in Utah

There are two ways to settle you debts, on your own or with the help of a reputable debt settlement company.

Settling your debts on your own

Settling your debt amounts on your own is not easy, but not impossible. All you need is the patience to handle your creditors and some knowledge of the law.

Here are some simple guidelines on how to settle your debts by yourself:

  • Know the law: There are a lot of free legal resources online and in your area you can consult. Get to know Utah's and collection law before you start negotiating.
  • Contact your creditor: Then contact your creditor and let them know you want to settle your debts. Convince them that you cannot continue making your current monthly payments and that you might end up in bankruptcy.
  • Offer a lump-sum settlement: Whenever you negotiate with the creditors, try and offer a lump-sum settlement. Creditors are more likely to accept your proposal if they are sure they can get the agreed on amount. If you can't afford to make a lump-sum settlement, try and get the creditor to agree to a repayment plan.
  • Make sure your creditor reports your debts as "settled": Once the settlement process is over, make sure your creditors report your debts to the Credit Bureaus as "settled" or "paid".

Enrolling with a Utah Debt Settlement Company

If you don't think you can settle your debts on your own, then get help from an established debt settlement company. These companies specialize in debt settlement and know the right tactics to gets your debts reduced, and ensure that your creditors can't make harassing and abusive collection calls while you are on the settlement program.

Once you enroll in a settlement program, one of the company's lawyers thoroughly evaluates your finances and your debt. The lawyer then negotiates with your creditors to eliminate late-fee elimination and reduce your debt. Effective debt negotiation can reduce your debts up to 60% and ensures there are no loopholes.

How to choose a debt settlement company in Utah

Always look out for the following when you are deciding on a debt settlement company:

  • Check the company's Better Business Bureau (BBB) accreditation.
  • Talk to your friends and relatives about the reputation of the company you are considering.
  • Look at the company's record of successful debt settlement cases as well as their references and case-studies. Don't hire a company that won't provide any.
  • Enrolling with a reputable debt settlement-company will not only ensure an effective debt settlement, but also keep you away from settlement scams.

How long it takes to settle your debts

The time it takes to settle your debts Utah depends on the kind of debt, the amount of your debts, and the number of debts you want to settle. While, a usual credit card debt settlement case in Utah would take you at the most 3-9 months, other kinds of debts would take about 1 to 3 years to get settled.

How Utah Debt Settlement affects your Credit Score?

The extent to which debt settlement impacts your credit score depend on:

  • The extent your debts are delinquent.
  • Your present credit score.
  • The amount of your debt.

If you settle your accounts that are already delinquent, it increases your credit score. These accounts then appear as "paid off"/ "settled" on your credit report.

As you start settling your debts, initially your credit score decreases as your accounts go delinquent. On the successful completion of the settlement program, your score improves, putting you in a better position than you were before.

Benefits of Utah Debt Settlement

  • Helps you avoid bankruptcy: A debt settlement program in Utah helps you evade bankruptcy and keep your assets.
  • You pay less than with debt consolidation: A good debt consolidation program can simplify your finances, but you still pay the full amount you owe. A debt settlement program reduces your debt amount and gets rid of your late fees and over-limit charges, so that you end up paying less.
  • It is a better choice than Credit Counselling: Most of the credit counselling companies receive an incentive from the creditors to ensure that the debtors pay the most that they can. However a Utah debt settlement plan makes room for the lowest settlement amount that the creditor will accept.
  • Puts an end to harassing collection calls: As you settle your debts, creditors stop calling you to demand repayment.

Debt Settlement and Taxes

The IRS regards the entire amount of the debt forgiven by your creditors as taxable income to you, unless you can show you were insolvent on the day before the debt was forgiven. The creditor(s) must report the amount to the IRS and Utah taxing authority and send you a 1099-C for the tax year in which the debt was forgiven.

In order to be sure about the effect debt settlement will have on your state income taxes; you should consult a tax professional in your area.

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