Debt forgiveness:

This is the cancellation or reduction of an individual’s or organization’s outstanding debt. It can be done voluntarily by the lender or through a government program. The forgiven debt is typically no longer owed by the debtor and does not need to be repaid.

Debt relief can take on different meanings, but in many cases, it refers to Debt settlement. This entails convincing your creditors to accept less than what you owe as full payment.

Why would a creditor agree to this? For one, if it’s clear that you’re unable to pay your full debt, the creditor may opt for a partial payment instead of incurring costly collection processes that may not yield results. Additionally, creditors may be aware that you have multiple debts, and may prefer getting some payment rather than losing out to another creditor.

If you’re considering Debt settlement you can either choose to negotiate with your creditors or seek the help of a professional debt relief service. However, both options come with costs. Settled accounts may stay on your credit report for up to seven years, which can make obtaining credit very difficult. Furthermore, settling privately negotiated debt may be considered taxable income, which means you may owe the IRS.

Lastly, if you opt for professional debt settlement services, there will be fees to consider. This reduces the total amount that the process saves you. Remember, there’s no such thing as a free lunch. However, debt relief may be possible as long as you’re willing to accept the consequences.

Bankruptcy is a legal process that can eliminate some or all of your debts, but it has downsides, like being a public process and staying on your credit record for up to ten years. On the other hand, it can force creditors to settle and debts discharged through bankruptcy are not considered taxable income. It’s important to consider all options before deciding if debt settlement or bankruptcy is right for you.

Contact us at 407-789-1447 to see how you can manage your debt successfully.