Card Credit Debt Forgiveness Settlement

My hubby and I have chose to go with a debt settlement company to deal with out $26,000 credit card debt. After doing more research on it, I have discovered that we will probably get a 1099-c for debt forgiveness. We may also have our wages garnished and get a law suit filed against us for not paying our bills.
Has anyone ever done debt settlement before and have delt with this? If we are having a hard time paying our bills now, they how will we be able to pay our taxes for next year if we have to claim the debt forgiven as income?

What you need to know about debt settlement firms: Your credit card companies are not going to offer you settlements like 50%, for example, if you are current (not behind) on your payments. Basically, the only way you can get into a position to negotiate settlements is to deliberately let your accounts go into default. This is exactly what debt settlement firms do....They take a monthly amount from you and use that to build a “settlement” account, which will go towards paying the “settlement” at a certain date. Your creditors will deliberately not be paid. They will not be happy about this.

If you are current on your accounts, this process will ruin your credit rating as your accounts will all go into default. Your creditors are under no obligation whatsoever to accept settlements from any debt settlement firm you hire. Their response might be to serve you papers and take you to court.

You don’t have to pay any firm to attempt settlements. You can try this own your own. Just remember, if you currently have good credit, this process will ruin your credit and there’s no guarantee that your creditors will accept settlements. If you are currently in default on your credit cards, you can make your own settlement offers. You don’t need to pay anyone to do this for you.

See link below to see what can happen with debt settlement firms.

Another option:
Contact your local Red Cross for a referral to the local Consumer Credit Counseling Services (CCCS) in your area. They can negotiate much lower payments and interest rates. They DO NOT negotiate settlements.

They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to "enrolled in debt management." This does not damage your credit, but it may make it impossible to obtain new credit while you are enrolled in their program....so don't use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would probably be denied while you're enrolled in the CCCS debt management program.... Otherwise, it can be a very good way to deal with your debt.

Please note that CCCS cannot perform miracles in situations where there is an overwhelming level of debt relative to your income/assets. CCCS is technically a non-profit organization, it is also partially supported/promoted by the credit card industry. My only concern with CCCS is that they would discourage a person from filing for Chapter 7 when in reality that would be in that person’s best interest. Sometimes Chapter 7 bankruptcy is the only solution to overwhelming debt.

Don't let anyone smear or guilt-trip you for making this decision if you have to...especially all the people who like to quote Dave Ramsey who think that BK should always be avoided....this is ridiculous advise that only benefits credit card companies...Of course BK should be avoided if at all possible...but sometimes it is needed. Do what's best for you and your family. Corporate America uses BK all the time and no one slams them.

Just remember that you can only file for Chapter 7 once every eight years....so if you file, you won't be able to discharge your debts again for eight years, even if you find yourself in a worse financial situation..

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2008-09-13 21:18:17 by jociemom

creditcarddebtforgiveness.net Struggling with credit card debt? why not try your lenders credit card debt forgiveness program and pay just pennies ...