Debt Settlement
Individuals who face tough financial times may be particularly susceptible to information, possibly misleading, about debt settlement and its ability to resolve their problems. While debt settlement can discharge your debts, it is not without its risks and potential damaging effects on your credit.
Many individuals may find that bankruptcy is a better option for them. If you have mounting debts and limited financial resources, contact the Boca Raton bankruptcy lawyers of Eric N. Klein & Associates, P.A., at 561-353-2800 today.
The Dangers of Debt Settlement
In many cases, people decide to settle their debts with the assistance of a debt settlement company. These companies claim that they can pay your debts off in a short time at a fraction of the cost. While this may be technically accurate, it can obscure important realities of the situation and might cause a debtor to choose this option without a proper understanding of the facts.
The typical process for debt settlement companies is:
- The consumer pays the company monthly
- The company sits on the individual’s debts
- The consumer’s debts default
- The company calls the creditors to settle the consumer’s debts
This process may harm an individual’s credit for several years since the individual must default on his or her debts, perhaps without knowledge that this is the case. Additionally, some states may require individuals to pay taxes on the debts that their creditors discharged, as this is seen as a form of income.
Contact Us
Bankruptcy may be cheaper and easier than debt settlement. If you or someone you love is faced with difficult financial choices, contact the Boca Raton bankruptcy attorneys of Eric N. Klein & Associates, P.A., at 561-353-2800 today.
