Did you know just 10% of debt settlement plans work out?
The Better Business Bureau reports that just 10% of consumers actually benefit from debt settlement plans and emerge debt free, as promised. Debt settlement plans are risky for the consumer but 100% profitable for the firms that offer the services. The National Association of Consumer Bankruptcy Attorneys considers these plans one of the biggest threats to in-debt consumers.
Did you know debt settlement plans come with exorbitant fees?
In addition to not offering promised relief, debt settlement plans actually increase the amount of debt by tacking on outrageous charges to the debt settlement firm. These firms are not charities. They charge thousands of dollars for their services and pay themselves first. Whether you get out of debt or not, they profit greatly. Where is their incentive to help you?
Did you know debt settlement plans ruin your credit?
In order to use a debt settlement plan, you have to specifically default on your debt by not making payments. The debt settlement firm then tries to negotiate a lower settlement but by then, you face penalties, interest and a lower credit score. And if the creditor won't take a lower offer, you could actually owe more than when you started.
Did you know debt settlement plans increase your taxes?
When a creditor accepts a settlement for a lower amount than you owe, they usually issue a 1099-C for the amount you didn't pay. The IRS treats this amount as taxable income. Even if you do get a break on some of your bills, between the additional taxes this will cause plus the fees you'll pay to the debt settlement firm, you will likely be worse off than when you started.
Did you know bankruptcy is a much safer and cheaper option?
Bankruptcy is a scary concept to many consumers but, in fact, it usually offers much better results than debt settlement plans. True, you'll pay attorney fees, but these are usually less than what debt settlement firms charge and your results are much better. If you qualify for a Chapter 7 bankruptcy, you'll see most of your unsecured debts discharged including credit cards and medical bills and you won't be hit with a 1099-C. Debts discharged in bankruptcy do not trigger a tax impact.
If you're considering a debt settlement plan, before you sign anything, come into our offices for a free consultation and let us show you the difference between a questionable settlement plan and the verified results that Chapter 7 offers. Contact the law offices of John T Orcutt for a free appointment at one of our convenient North Carolina locations. Don't wait – get the debt relief you deserve now.