Debt settlement is the ideal solution for someone who has a lot of credit card debt. Debt settlement is where your creditors agree to accept less than the full amount of your debt as payment in full.
You can settle your debts by directly negotiating with the creditors on your own or by enrolling with a debt settlement company.
If you want to avoid the costs of hiring a debt settlement company, all you need to do is follow a few simple steps to get your debts effectively settled. First, contact your creditors and convince them that you are having trouble making the monthly payments, and tell them that you want to settle your outstanding debts. Creditors prefer debt settlement to bankruptcy as getting their money during bankruptcy is a time-consuming process.
When making an offer, offer your creditor as much as you can. Creditors are more likely to agree to a settlement, if they are sure of getting back most of what you owe. If a lump sum payment is beyond you means, try and get your creditors to agree to an installment plan.
Finally, make sure your creditor reports your settlement as "paid" or "settled" to the Credit Bureaus, as soon as the settled amount is paid off.
If you feel that the debt settlement process to difficult for you to carry out on your own, don't worry! Virginia debt settlement companies are at your service!
It is always advisable that you enroll with a company with Better Business Bureau (BBB) accreditation, in order to avoid a scam.
BBB affiliated firms offer you the best combination of debt reduction, late-fee elimination, and credit management. Their unique debt settlement programs are designed to satisfy the specific needs of their clients.
When you enroll with a debt settlement company, one of the company's lawyers analyses your situation and creates a personalized debt settlement plan for you. Then the lawyer contacts your creditors and asks them to stop all communication with you, and that all payments will be forwarded to them through the company. Finally, the lawyer negotiates with your creditors to find a settlement amount you can pay, along with a suitable repayment plan for you.
All you pay is an upfront fee to initiate the settlement procedure and a small monthly payment to a trust account for the company to make your monthly payments until all your debts have been repaid.
Both the time and cost of debt settlement in Virginia depends on your outstanding debt amount, the kind of debts you have, and the number of debts you intend to settle.
It typically takes a credit card debt settlement case in Virginia 3-9 months, while other kinds of debt can take 1-3 years to get settled.
Improving you credit score is the primary aim of any debt management program. The effect of debt settlement on their credit score is not the same for everyone. The extent of the impact depends on your current credit score and how delinquent your payments are.
Debt settlement aims at boosting your credit score in the long run. By going through settlement you cut down on the amount of your debts which in turn increases your credit score.
If you already have a good credit score, debt settlement will put you in a better position than someone who is already past due.
If you settle accounts that are already delinquent, it will increase your credit score immediately, as these accounts would appear as "paid off" or "settled" on your credit report. If you choose to settle accounts that are current, your credit score decreases as your accounts go delinquent during the negotiation process. Over time your score will bounce back as your accounts start getting settled.
A good debt settlement program in Virginia gives you the following benefits:
The IRS regards any amount forgiven by a creditor in as part of a settlement as taxable income to you, unless you can show you were insolvent on the day before the debt was forgiven. Once the debt has been forgiven your creditor must report the amount of the original debt and the amount forgiven to the IRS and Virginia's state taxing authority. The creditor must also mail you a 1099-C before April 15th of the year in which you must report your income taxes. For example, if the debt was forgiven in June of 2010, the creditor must mail you the 1099-C before April 15th, 2011.
Getting out of debt is so very essential for securing your financial standing. And choosing the right path to make your way out is all the more essential! So, if you feel that Debt settlement is perhaps not the apt thing for you, there is no need to feel dejected. You still have other options! You may consider a genuine debt consolidation program in Virginia or file for bankruptcy, as per your need!
Last Updated on: 25 Apr 2021