Bankruptcy Attorney Los Angles – Debt Settlement FAQ
Below you will find a collection of frequently asked questions that pertain to the various aspects of debt settlement:
Q: What is Debt Settlement?
A: Debt settlement also goes by the name of debt negotiation and refers to your debt being negotiated down to a reduced amount and paid off in a lump sum or in multiple payments. Debt settlement is an excellent resource for individuals dealing with extreme financial distress who want to avoid bankruptcy, but use caution when considering working with a debt settlement company. Consult an attorney before agreeing to work with these companies as they often set borrowers back rather than assisting them with debt relief.
Q: Is debt settlement better than filing for bankruptcy?
A: Filing for Chapter 7 bankruptcy will discharge the majority of your debts, giving you a blank financial slate, but will scar your credit for years to come. Chapter 13 bankruptcy will allow you to discharge many of your debts but you will be required to pay back a certain percentage of what you owe. You must consult with a bankruptcy attorney to determine what you are eligible for and to explore viable solutions for debt settlement and relief.
Q: Will debt settlement negatively impact my credit?
A: To explore settlement as an option you must have defaulted on your loan payments and have gone into delinquency before a lender will consider negotiations. By not paying your lenders your credit will be negatively impacted by seeking debt settlement, however it will be far less detrimental than filing for bankruptcy.
Q: Will debt settlement affect my taxes?
A: In the United States, the IRS considers forgiven debt to be actual income, therefor requiring taxes to be paid upon it. If you are able to adequately prove that you were insolvent during the time that your debt settlement took place, the IRS will waive these specific tax liabilities.
Q: Can I trust a debt settlement company?
Contact a Debt Settlement Attorney Today
We are proud of the rock-solid reputation we have earned among our former clients and colleagues and look forward to providing you with high quality legal assistance as you deal with the possibility of Chapter 11 or 13 bankruptcy or foreclosure on your home. Please contact our offices located in Sherman Oaks and Los Angeles today to speak with one of our bilingual staff members and to start the process of financial recovery. As a Southern California debt relief agency, we are standing by to assist you. Call us at (213) 699-3055 today for a free consultation.