Understanding What To Do And Not To Do During Debt Settlement
No matter how you have reached the point of overwhelming debt, it is important to realize that you have options. Debt settlement can allow you to save up your money to pay one large sum rather than smaller debt payments. In many cases, you can negotiate with your creditor to pay back a smaller sum than what you owe.
Before stepping into the debt settlement process in Chicago, it is wise to look at what you should do and what you should avoid doing. Speak with an attorney from Whiteman Law, if you have any further questions. This is your financial future and one minor mistake could have a significant impact.
Don’t Wait Until It Is Too Late; Be Proactive In Your Approach
Many creditors will “write off” your account after about six months without payment. This does not mean that they are forgiving your debt, but rather that they are saying your account is charged-off and they do not expect payment anytime soon. This can be detrimental when trying to pursue a debt negotiation. The longer you wait, the less likely they may be too to settle your debt, as they otherwise see you as a financial risk.
Don’t Forget To Consider The Consequences
It is important to realize that any amount of debt that is forgiven by creditors is still taxable, as long as it is over $500. Debt settlement could also potentially leave a bad mark on your credit report and will make it more difficult to take out loans at affordable rates.
Do Prepare All Your Financial Records
When creating a debt settlement agreement with creditors, they will want to take a detailed look at your income, your assets and your debts. Creditors do not want to make settlement negotiations with people who are just trying to save money. They will look to make certain that you are in a dire place and truly unable to pay back your debt.
Don’t Create A Plan You Cannot Keep Up With
In some cases, a debtor may negotiate to pay their creditor back over a certain period of time. It is essential that if you go this route, that you make a repayment plan that is attainable. Creating a plan that is too lofty will only hurt you down the road and cause you to fall back into unmanageable debt once again.
Do Follow Through And Make Sure The Matter Is Cleared
When all is said and done with a debt settlement arrangement, check your credit report to make sure the creditor marked off your debts as settled. Even though this is required by state law, many creditors will fail to do so and end up leaving individual’s credit reports with supposed delinquent debts that are nonexistent.
Contact Whiteman Law
When faced with the possibility of foreclosure, it is critical that you consider all of your options. By scheduling a free consultation with Whiteman Law, not only can you discover what plan of action is best for you, but we will do this without any obligation attached. We understand that you may feel trapped and alone in this trying time; we are here to provide solutions.
We always return phone calls and emails within 24 hours, so please do not hesitate to get in touch with our office today. Placing our clients as our top priority, you have nothing to lose by calling our firm at 312-655-1000 today!