in

The Disadvantages of Settling Your Credit Cards For 50% of the Balance

We have all heard the commercials…You can pay 50% of what you owe on your credit cards and be debt free. They make it sound so easy. All you have to do is call them and you are on your way, but nothing is ever that easy. Do you think that credit card companies are going to accept half of what you and say, thank you and have a nice day.

If it has been over six months since you have made any payments you credit card companies may be willing to accept your 50% payment and call it even. But if you used a debt settlement company to make that settlement, they are going to want their cut. And that is anywhere from 15% to 25% of the 50% that they saved you on the original debt. And what do you think is going to happen to your credit when you do not pay your balance in full? If you have not made a payment in six months, you do not have as much to lose as someone that is current and stops making payments in order to make a settlement. Bottom line…debt settlement is not a credit friendly option.

And the 50% that you save on that debt, the government wants their cut. Because you are not repaying it, it is considered income. If it is over $600 the IRS will send you a 1099 for tax payment. If you go from being current to not making payments to save for a settlement, it is hard to say exactly what your lender will do. It is not unheard of in this economy to be sued when the lender finds out you are working with a debt settlement company.

You may be wondering what your alternatives are. Debt counseling is a debt relief method that can consolidate your unsecured debts without a loan. You will make one payment per month to the credit counseling company and they will pay your lenders. You will be out of debt in less than five years with your credit intact. If for some reason you decide credit counseling is not for you, you will be no worse off for enrolling and not finishing the program. You can get a free quote for debt freedom today.


How To Stage Your Home For A Quick Sale

The Middle Voice – Mediating Conflict Successfully by Joseph B Stulberg and Lela P Love