West Palm Beach Debt Settlement Attorney
While some amounts of debt may be beneficial and categorized as “healthy,” most debt–especially when it starts to accumulate large amounts of interest–can be incredibly detrimental to a person’s financial wellbeing. If you are drowning in debt, knowing what to do can feel overwhelming. At the law office of Bruce S. Rosenwater & Associates, P.A., our West Palm Beach debt settlement attorneys want to help. One option for debt relief that may be appropriate for you is debt settlement. Here’s what you need to know about debt settlement and how our lawyers can assist you.
What Is Debt Settlement?
In a nutshell, debt settlement essentially means that a creditor has decided to “settle” your debt with you, which means that you and the creditor have reached an agreement about how much you’ll pay – the agreed upon amount is less than the amount you have accumulated. A debt settlement agreement is pursued when a debtor has accumulated large amounts of debt and can show the creditor that there is no way that they will be able to pay back the amount of the debt in full. Typically, it is more beneficial for a company to settle a debt, as this means that the company will receive at least a portion of what it is owed.
What Are the Risks & Advantages of Debt Settlement?
While debt settlement may sound like a great thing–indeed, with debt settlement, you won’t be liable for the full amount of your debt–there are definitely some downsides. The biggest advantages of debt settlement are that a) you will only pay the amount of debt that you and the creditor agree to, which is less than the full amount of debt you’ve accumulated, and b) once you reach a settlement, the creditor can no longer hound you or pursue a lawsuit against you for the additional debt not included in the settlement.
The downsides to a debt settlement include:
- Your credit will suffer. Chances are, your credit score is already low – a debt settlement will lower it even further, and will show up on your credit report for the next seven years.
- Even though you’ll have some debts wiped out or forgiven, penalties and interest on the debt that you have to pay back will continue to accrue.
- Forgiven debt is considered income, which means that the IRS will tax you on any debt that is forgiven and that you don’t have to pay back.
In addition to the above, note that some types of debt cannot be settled.
How a Debt Settlement Attorney Can Help
Before you decide to settle your debt, you should consult with an experienced debt defense and bankruptcy attorney who can provide you with an overview of all of the information you need in order to make a wise decision about settling your debt. Settling debt can be very beneficial for some people, but it’s not for everyone.
At the law office of Bruce S. Rosenwater & Associates, P.A., our debt defense lawyers are available to help you. Please call our law office today to request a consultation online to get the help and support you need when you feel out of options.