When the Debt Settlement Attorney Network isn’t for You
Most information about debt settlement is provided by companies and attorneys with an interest in getting customers. So naturally a few things is left out or at least not talked so much about. One of those things is that debt settlement isn’t for everybody. As a matter of fact it is the best solution only for a very small percentage of people in debt. This article will help you determine whether it is for you or not.
First of all it’s illegal to profit by debt management in twelve of the American states. The states are: Arizona, Georgia, Hawaii, Louisiana, Maine, Mississippi, New Jersey, New Mexico, New York, North Dakota, West Virginia and Wyoming. So if you live in one of those states you need to be aware that it is illegal for a debt settlement attorney network to contact and work with you. It doesn’t matter if they operate from another state. Some companies disregard the law, but you should consider if you really want an attorney who is breaking the law by working with you.
Second it is only possible to settle unsecured debts. In this category you’ll find credit card debts, medical debts and department store card debts. Examples of secured debts that you can’t settle are student loans, mortgages, tax debts and alimony.
To settle your debts is usually only advisable if you are unable to pay off the full amount of your debt one way or another, because your credit report will be affected negatively by this option. And if you find yourself so deep in debt that you are unable to actually pay it off, there are still other options like bankruptcy that might be preferable in your case. My advice is to get someone who isn’t trying to sell you a solution to look at your case and help you determine the best solution for you. Unfortunately it’s hard to write specific advice in a general article like this because there are many things to take into consideration.
If you speak to a debt settlement attorney he might not inform you about the tax consequences of this option, but if you manage to make a deal the savings you make is taxable income if they exceed $600. In a few cases the tax will actually put you in a worse situation than before.
And last but not least a large percentage of what you save from making a settlement on your debt will have to cover your legal expenses. Getting professional help is a costly affair and it’s common that you need to pay a fee upfront, monthly charges and a percentage of either the total debt or the saving when the deal is done. The alternative is to take the bull by the horns and do it yourself.
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Tagged With credit card debts, debt settlement attorney, debt settlement attorney network, illegal to profit by debt management, medical debts, people in debt, unsecured debts
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