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Learn Why the Idea of Settling Your Debt for Pennies on the Dollar Rarely Works

August 21, 2019
Learn Why the Idea of Settling Your Debt for Pennies on the Dollar Rarely Works

When a person gets into debt, it is understandable that they would want to find a simple way to move forward. They want an option that is as painless as possible. They want a way to get a new lease on life. They want to find a way to pennies on the dollar. The bad news is that this is not likely an option for you. The worse news is that there are companies out there that want to take advantage of you and may claim that they have found the way.

They have not. Keep reading to find out why filing bankruptcy is almost always the best way to move forward if you are drowning under debt. Then contact California Bankruptcy Relief at (888) 748-0025 to request a free consultation with a bankruptcy attorney.

Debt Settlement Companies Can Only Follow Through on Their Promises in Very Specific Circumstances

There are some people who can be helped by debt settlement companies but those people are few and far between. If you are wondering if you are one of them, ask yourself the following questions:

  • Do you have the cash available to pay 100% of each settlement?
  • Will 100% of your creditors agree to the terms of the settlement?
  • Are you 100% certain you will have no negative financial charges in the future?
  • Do you want to wait years for your credit to clear up?

If you said “Yes” to all the above questions then call the debt settlement company. if you have the money to pay the settlements in full, all of your creditors will agree, you are entirely confident that you will not have future bad marks on your credit, and you do not mind waiting seven or more years for improved credit, then it may be the choice for you. For everyone else, bankruptcy is the better option.

Debt Settlement Can Come with a Huge Tax Burden

The last thing to know about debt settlement is that all of the debt you are forgiven is treated as case and you owe taxes on it. For example, if you owe $14,000 and the company accepted a payment of $7,000, the $7,000 they forgave would be considered income. Depending on your tax bracket, this could result in about 33% of that money being owed back come tax time.

There is a Better Option: Bankruptcy

The good news is that there is an option that is easier to qualify for, does not require you to have all the money upfront to pay off debts, can allow you to keep your assets, and will clear your credit up faster: Bankruptcy. Call California Bankruptcy Relief now at (888) 748-0025 to learn more about the bankruptcy process.

Riverside Bankruptcy Law Office

10580 Magnolia Ave, Suite A
Riverside, CA 92505
(951) 389-4070

DISCLAIMER: The information on this website is for general purposes only and should not be considered legal advice. It is not intended to create an attorney-client relationship. California Bankruptcy Relief is a federally approved debt relief agency that provides legal assistance to people and businesses seeking relief under the United States Bankruptcy Code. For more information, please view our Privacy Policy.

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