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Debt Settlement FAQs: What You Need to Know about Settling Debt with Creditors (Pt. 3)
Wrapping up this blog series, here, we will answer some final debt settlement FAQs.
Debt Settlement FAQs: Additional Answers You May Need to Have
Q – What are some of the red flags of debt settlement scams?
A – If you are shopping around for debt settlement companies, beware of companies that:
- “Guarantee” to settle your debt for pennies on the dollar
- Charge you fees before any of your debts are settled
- Promise to help you take advantage of new “bailout” plans
- Tell you that they will stop creditors from contacting and suing you.
These are common behaviors of predatory companies that will do you no good. In fact, working with these companies will often put you in a worse financial position than when you first reached out for their help.
Q – What if I’m able to successfully settle some debt?
A – This would be ideal, and when it occurs, you should be aware that you will likely owe taxes on the amount not paid in debt. The reason for this is that this unpaid debt would likely be considered taxable income. So, if you are pursuing debt settlement, make sure that you not only save enough money to pay a creditor the lump sum settlement amount but also to cover the future tax obligations.
If you don’t end up having the money to satisfy the taxes, you could just trigger another new debt – a tax debt – for which there may be limited options for settling.
Q – How do I know if debt settlement is right for me?
A – The best way to find out if debt settlement is truly the best debt relief solution for you is to consult with an experienced debt relief attorney – like the Denver bankruptcy lawyers at Garcia & Gonzales, P.C. The bottom line is that:
- When you are facing significant debt, the actions you take to resolve that debt may not always work, especially if you end up working with inexperienced and/or unscrupulous “professionals.”
- When these options don’t work, you could be in deeper water financially.
- With an experienced attorney helping you, you can be sure that your interests and rights will be fully protected as you pursue the best debt relief option for you.
Denver Metro Area Bankruptcy Attorneys at Garcia & Gonzales, P.C.
Are you looking for real relief from serious debt? If so, you can trust the experienced Denver bankruptcy attorneys at Garcia & Gonzales, P.C. to provide you with experienced help, honest answers and the highest quality legal services. With more than 50 years of combined legal experience, our trusted lawyers have the legal knowledge, skills and insight you can rely on to help you favorably resolve your debt issues and obtain a financial fresh start.