Tips To Keep In Mind When Considering Debt Consolidation Or Settlement

Law Blog

Are you over your head in debt? Do you only make the minimum payments on your bills and feel like you're never making a dent in what you owe? If your debt is quickly getting out of control, it might be time to look for a solution. Today, it's possible to consolidate or even settle some of your debt so that you can get out from under the crushing financial pressure and get your life back. If you are considering debt consolidation or settlement, here are some important considerations to keep in mind.

Professional Help Gives You the Best Chance of Success

It's technically possible to call up your creditors and try to negotiate a settlement. It's even possible to contact a consolidation company and take out one loan to pay off all of your other balances. But going in this direction without professional legal help is not advised. Debt collectors may not be willing to cut you a break if they know they have you over a barrel. But with a debt consolidation attorney, the power switches to your side of the equation. An attorney is less likely to get a run-around and will be able to quickly bypass the initial customer service rep at credit card firms to get to someone who can actually help you cut a deal.

Cleaning Up Your Balance Sheet Does Not Mean It's Time to Start Spending Again

Whether your attorney helps you consolidate your debt into a personal loan or helps you completely settle multiple accounts, your first action after this is all taken care of may be to finally exhale. The stress of having all of that debt lingering over you may subside a bit. But while it's fine to be happy about getting your finances under control, don't use this burst of energy to go on another spending spree. Debt consolidation or settlement is only the first step on a long road towards getting your credit repaired. If you suddenly have some available credit thanks to the work of your attorney, leave it alone so your credit utilization rate can improve and your credit scores can start going up.

Be Prepared to Pay Taxes on the Consolidation or Settlement If Applicable

If you do get a settlement or a consolidation that saves you thousands of dollars, you may be required to pay taxes on some of the money that you saved. Your attorney can help you calculate the exact amount for your situation, but in general, you should keep some excess cash around for the next tax season to ensure you can pay your tax bill in full.


9 August 2021

Dealing with Estate Planning When You're Single

Too many single people assume they don't need to plan their estate. My brother fell into this category, and his unexpected passing left our entire family struggling to deal with his home, belongings, and financial accounts. It took nearly three years for the courts to set up a deal because he left no paperwork detailing how he wanted his estate divided. The situation immediately convinced me to work on my own estate, even though I'm still in my early 30's and don't have children or a spouse to worry about. Since it's a little harder to pick beneficiaries and estate managers when you're single, I collected the resources I used for making my own decisions and decided to publish them here on my blog. Use these resources before talking to an estate planning attorney so you're prepared for making hard decisions.