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FAQ

FAQ

 

Are there any possible Income Tax implications?

Depending on your financial situation, you could owe taxes on settled debts. The Internal Revenue Service (IRS) treats forgiven debts as income and expects you to pay income tax on the savings. You should seek the advice of an Accountant or Financial Planner, to see if a Debt Settlement program will affect your personal financial situation. Creditors are supposed to send you a Form 1099-C for reporting your cancelled debts.

How will choosing Debt Settlement, affect my Credit Score?

The three main factors that determine your Credit Score are your; past payment history; your Debt/Equity Ratio, and your ability to make the payments you have undertaken. If Debt Settlement is an option you are considering, then in most cases, your Credit Score has already been affected. If you have managed to keep up with your monthly payments, then you will see a reduction in your Credit Score once you have entered into the Program. Bankruptcy will show up on your Credit Score for at least 7 years. Once you complete a Debt Settlement program, your Credit Report will show ‘Paid as Agreed To’. Remember, this program can help to return you to a better financial position. A lot of individuals just like you, want to put the past behind them and move on to a more positive financial future for themselves and their families.


Who is going to know about this choice?

This information will not be published in the local newspapers or available to anyone on the Internet, unlike a proposal for Bankruptcy. Only the Creditors and you will be privy to this information.

What happens, if I receive a large sum of money and I want to pay off the arrangement or, I have received an increase in income and I want to pay more than the minimum payment in the contract? Can this be done?

Yes, either of these two scenarios can be done.


Will Debt Settlement affect my job?

This information will not be published in the local newspapers or available to anyone on the Internet, unlike a proposal for Bankruptcy. Only the Creditors and you will be privy to this information.

I’m already in a Debt Consolidation Program, can I change to a Debt Settlement Program?

Yes, we will explain how to cancel your current program, and start you on a Debt Settlement Program.

 

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