GM Law Firm, LLC, Explains Why Debt Settlement Isn’t Always the Best Choice

GM Law Firm, LLC, explains why debt settlement may not be your best choice to eliminate your debts. Many Americans find themselves with an increasingly worrisome debt situation these days, and it is not uncommon for people to need help to cope with a debt load that they cannot pay off.

If you have found yourself in a situation where you owe more money than you can pay back against a credit card or a student loan, that is a common situation for Americans. Many people think that bankruptcy is their only option, but that is not the case. There are other options that you can explore to attend to your debts.

Not all debt repayment solutions are created equal, and you need to be aware of your options before you agree to a payment arrangement.

What is Debt Settlement?

Debt settlement is the process of consolidating all of your debts into one loan that allows you to make a single payment. The other benefit to using debt settlement for your debts is that you will be saved from paying interest on a variety of credit cards while you are trying to pay off the amount of debt that you owe.

This is the most common route that is taken to make paying off a large debt load possible. It can harm your credit, but it will not cause as much damage as a bankruptcy would.

Why Debt Settlement Might Not be the Best Choice

The downside of debt settlement for many people is that there are debt settlement fees associated with the process, which can be as high as $3,000. Another reality of debt settlement is that it will impact your credit score. While it will not injure your credit score as much as a bankruptcy, lenders will still see your debt settlement on your credit report.

Another problem that some consumers report that they are required to provide a large lump sum for their repayment, and then it is held for many months. This can cause issues with your repayment agreement.

While it is possible to navigate this process yourself, you should avoid doing so. There are lots of ins and outs to the debt settlement process that requires careful handling. Many people get into difficulties trying to handle this process alone.

Lastly, you may still owe taxes on your debt, and this can be a confusing process to sort out. Creditors need to notify the IRS if the debt is $600 or more, but sometimes this does not take place until later. People who are looking into debt settlement need to ask about this before they agree to any kind of payment arrangement.

There are more options out there than bankruptcy and debt settlement. A debt repayment expert can help you to figure out what the best solution is for your debt repayment process. Don’t assume that debt settlement is the only or the best option to be used to pay off your debts.

About GM Law Firm, LLC

GM Law Firm, LLC, is a consumer advocacy law firm based in Boca Raton, Florida, that empowers clients battling credit card, repossessions, installment loans, private student loans and medical debt to fight for their rights and help negotiate a satisfactory debt resolution. The experienced attorneys from the GM Law Firm, LLC, also legally protect clients against harassing debt collectors and provide a customized strategy for debt defense. Contact GM Law Firm, LLC, for a consultation.

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