DEBT CONSOLIDATION AND NEGOTIATION

Debt settlement, also known as debt negotiation, is a process of asking your credit card company to accept less than what you owe. Debt consolidation loans attempt to consolidate all your debts into a single payment that presumably would be less than you were paying before. However, neither approach offers any guarantees. For example:

• You may end up paying thousands of dollars to a debt settlement firm to negotiate with creditors on your behalf. However, one or more of your creditors may refuse to negotiate.
• Even if a creditor agrees to accept less, the IRS views debt forgiveness as income, so you would have to pay taxes on any forgiven debt.
• Even after consolidating your debts into one loan, you may not be able to keep up with payments.

Working with Kaniuk Law Office will ensure you are making an educated decision when it comes to debt settlement and debt negotiation vs. filing bankruptcy.

For some, Chapter 7 or Chapter 13 bankruptcy is a better option:

• Chapter 7 bankruptcy allows you to discharge 100 percent of many types of unsecured debt, including credit card and hospital bills, whether the creditor agrees. In addition, the discharged debt will not be taxable.
• Chapter 13 bankruptcy works like a debt consolidation plan, except you can reduce your debts to an amount the bankruptcy trustee determines you can pay. This is usually far less than you owe. Discharged debt is tax-free.