Settling Debt
I do not recommend this unless you have no other way out, I found myself in this situation and I am slowly crawling out of a pile of debt after a divorce. I had decided to keep the house and it is more than I can afford. However, I have two children so I wanted to offer them some stability in being able to stay in our house. In order to meet my mortgage payment I was unable to pay loans and credit cards. I have settled my own debt after months of missed payments on some of my outstanding loans. This loan companies would rather take a settlement than for you to file bankruptcy and they not get any of their money back. I settled a $20,000.00 outstanding loan for $4,000.00. I had to have the $4,000.00 paid to them within a six month period. I also have settled a $4,000.00 credit card for $1,000.00 which also had to be paid within a six month period. Now, the downfall to this is that you do have to take a hit on your taxes for the write off amounts. It also does reflect negative on your credit scores but with my back against the wall this is what I needed to do at the time. Now, I would also stress that it may be in your best interest to meet with a financial attorney who can direct you in which way you should lean. I was considering bankruptcy and I did meet with an attorney who advised me that I currently made too much money in regards to the new laws that are now on the books and I should look at alternative ways to try and get rid of my debt. I also spoke with a credit consumer group that also would have assisted with lowering my bills as the middle man. However, I found out I could lower these by doing this on my own and actually got a better deal once I explained my entire situation to the credit company that I owed. I did have to speak to several people at the company over several months before we worked things out to the point that I could get rid of the debt that I owed. It was not easy but I did make sure that I made those payments because if you do not live up to your end of the bargain in the six month period they will not give you the discount that you agreed upon. Do review all of your options before settling on the path that is best for you.
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