Debt Settlement in Washington is the best solution for those suffering from lump sum debts. With debt settlement plans in Washington you can be debt free by making just the minimum monthly payments. It is an effective alternative to bankruptcy as it helps restore your credit report and scores as it helps you avoid harassing and abusive creditor calls.
Washington debt settlement programs aim to reduce your debts by approximately 40-60% of the original debt.
In order to carry out an effective debt settlement process it is important to have a sound knowledge of your state's laws. You need to have a planned and systematic approach to carrying out a successful debt settlement program in Washington.
You can carry out the debt settlement process either by yourself or you can get assistance from a debt settlement company.1. Personal Debt Settlement:
When you chose a personal debt settlement program, the first thing you need to remember is that it is not an easy task. You have to be careful and patient while handling your creditors.
Some creditors are likely to disagree to your debt settlement proposal. With debt settlement, your creditors are taking a loss because they do not get the amount of interest and add-on charges they hoped for.
In order to get your proposal approved you have to convince your creditors that you are unable to pay even your minimum monthly payments. Your creditor will agree to the proposal if they are afraid of losing even the amount you can pay them if you file for bankruptcy. Remind you creditors that with debt settlement you will pay back most of your debt.
You need to follow some basic guidelines if you want to negotiate a successful settlement:
Debt settlement is difficult if you want to handle it on your own. You may save some money by not enrolling with a debt settlement company to work for you, but you won't have to deal with creditor negotiations.
While looking for a debt settlement company, check out its accreditation with the Better Business Bureau (BBB).
Before you enroll, the company analyzes your financial situation and provides you with the possible solutions they can offer. A debt settlement attorney is appointed who will work with your creditors on your behalf. If the attorney's negotiations are successful you might expect a reduction on your debt principal by 40-60%.
The attorney also notifies your creditors that they must communicate with the lawyer and not you. If the creditor is discovered using threats or harassing you, the lawyer may also help you take legal action against the creditor.
Then the lawyer negotiates a repayment plan that allows you to pay back your debts in affordable installments if you can't afford to make a lump sum settlement.
In Washington the average duration of debt settlement process is dependent on factors like the kind of debt involved (credit card, medical debt), the outstanding debt amount, the number of debts intended for settlement, and how long it takes to get the creditor's approval.
In Washington the duration for a credit card debt settlement program is 3-9 months and 1-3 years for other debts.
Debt settlement in Washington helps improve your credit score.
When you enroll in a settlement program most of your accounts are delinquent and you have negative credit scores. After the process has started, and you have begun to make regular payments on your accounts, your scores increase.
If the debts are delinquent the effect is much more noticeable. Your credit scores get a increase once you start paying them down. However, those debts that are not delinquent also help in restoring the credit report, but the process is slower.
After your debts are paid down, your creditor should tell the bureau to mark your account as "paid"/"settled". Once this happens, your debts have been cleared and you're free to make further improvements to your credit.
If you declare yourself insolvent (you owe more than your assets are worth) then you do not have to pay taxes on the amount your creditors have forgiven. The IRS deems any amount forgiven under a debt settlement program as income. You need to report it on your income taxes for the year the debt was forgiven.
Last Updated on: 26 Apr 2021