ay taxes in some cases. Of course, you should contact a tax professional to fully understand your particular circumstances.

Myth #6: Bankruptcy is much easier because I won’t have to pay anything.

Fact: The new bankruptcy laws make it more difficult to declare Chapter 7 Bankruptcy, which is the bankruptcy that forgives your debts. The court fees may have also been recently increased; plus, a lawyer can be extremely expensive, and you will have to pay them at a time when you obviously have little cash. With Chapter 13 Bankruptcy you may have to pay what the court determines and a strict budget is often created so you are able to pay your bills. And this is only what you pay monetarily! Many people also develop a loss of self-esteem or

Debt settlement is a perfectly legal and viable alternative to bankruptcy; however, many people overlook this option because they are unsure of what it is and how it works. Here are six common myths and the actual facts regarding debt settlement..

Myth #1: Debt negotiation and debt consolidation are the same type of programs.

Fact: This could not be further from the truth. Debt consolidation combines your debts into one payment. You may get a lower interest rate; however, your debt is usually secured by some type of collateral, such as your house. You could end up paying for the debts over a much longer span of time; this means you could eventually end up paying more for your debt. On the other hand, debt settlement helps to reduce the total amount owed by up to 50%, allowing you to pay of your debts within a significantly reduced period of time.

Myth #2: My creditors won’t work with a debt settlement company.

Fact: Most creditors will work with debt settlement companies because if you declare bankruptcy they may never see a dime. Creditors are often more than willing to settle, especially if you are behind in payments. Plus, most debt settlement firms use their knowledge of laws and negotiation tactics to achieve the desired settlement. Often, the creditors or collection agencies will say that they won’t work with the debt settlement company because they want to force you to pay the entire amount on the balance; however, they are often not being truthful and will usually take a settlement offer.

Myth #3: My credit will be ruined if I settle my debts.

Fact: Although your credit may be negatively affected in the short term, you will eventually be able to repair it. In fact, your credit is more adversely affected by the inability to pay on the amount of debt you have now and the limited amount of credit you have available. Once you finish the program you will soon be able to rebuild your credit.

Myth #4: The debt settlement company can’t guarantee that I will get a settlement; they will just take my money and leave me with the full amount to pay.

Fact: Most debt settlement companies offer guarantees that protect you if they are unable to settle on your account. For example, some debt settlement companies will offer a refund or the difference refunded if they are unable to settle for less than 65% across the board on your accounts. Just make sure when you choose a debt settlement company, you check to make sure they offer some type of guarantee in their contract.

Myth #5: I will have to pay taxes on all of the forgiven money.

Fact: If more than $600 of your debt is forgiven, the IRS considers the amount as taxable income. However, if your debt is greater than the amount of assets you own (which is highly likely if you are deeply in debt), you may not have to report the forgiven debt. So, you probably will not have to pay taxes in some cases. Of course, you should contact a tax professional to fully understand your particular circumstances.

Myth #6: Bankruptcy is much easier because I won’t have to pay anything.

Fact: The new bankruptcy laws make it more difficult to declare Chapter 7 Bankruptcy, which is the bankruptcy that forgives your debts. The court fees may have also been recently increased; plus, a lawyer can be extremely expensive, and you will have to pay them at a time when you obviously have little cash. With Chapter 13 Bankruptcy you may have to pay what the court determines and a strict budget is often created so you are able to pay your bills. And this is only what you pay monetarily! Many people also develop a loss of self-esteem or d

e total amount owed by up to 50%, allowing you to pay of your debts within a significantly reduced period of time.

Myth #2: My creditors won’t work with a debt settlement company.

Fact: Most creditors will work with debt settlement companies because if you declare bankruptcy they may never see a dime. Creditors are often more than willing to settle, especially if you are behind in payments. Plus, most debt settlement firms use their knowledge of laws and negotiation tactics to achieve the desired settlement. Often, the creditors or collection agencies will say that they won’t work with the debt settlement company because they want to force you to pay the entire amount on the balance; however, they are often not being truthful and will usually take a settlement offer.

Myth #3: My credit will be ruined if I settle my debts.

Fact: Although your credit may be negatively affected in the short term, you will eventually be able to repair it. In fact, your credit is more adversely affected by the inability to pay on the amount of debt you have now and the limited amount of credit you have available. Once you finish the program you will soon be able to rebuild your credit.

Myth #4: The debt settlement company can’t guarantee that I will get a settlement; they will just take my money and leave me with the full amount to pay.

Fact: Most debt settlement companies offer guarantees that protect you if they are unable to settle on your account. For example, some debt settlement companies will offer a refund or the difference refunded if they are unable to settle for less than 65% across the board on your accounts. Just make sure when you choose a debt settlement company, you check to make sure they offer some type of guarantee in their contract.

Myth #5: I will have to pay taxes on all of the forgiven money.

Fact: If more than $600 of your debt is forgiven, the IRS considers the amount as taxable income. However, if your debt is greater than the amount of assets you own (which is highly likely if you are deeply in debt), you may not have to report the forgiven debt. So, you probably will not have to pay taxes in some cases. Of course, you should contact a tax professional to fully understand your particular circumstances.

Myth #6: Bankruptcy is much easier because I won’t have to pay anything.

Fact: The new bankruptcy laws make it more difficult to declare Chapter 7 Bankruptcy, which is the bankruptcy that forgives your debts. The court fees may have also been recently increased; plus, a lawyer can be extremely expensive, and you will have to pay them at a time when you obviously have little cash. With Chapter 13 Bankruptcy you may have to pay what the court determines and a strict budget is often created so you are able to pay your bills. And this is only what you pay monetarily! Many people also develop a loss of self-esteem or

usually take a settlement offer.

Myth #3: My credit will be ruined if I settle my debts.

Fact: Although your credit may be negatively affected in the short term, you will eventually be able to repair it. In fact, your credit is more adversely affected by the inability to pay on the amount of debt you have now and the limited amount of credit you have available. Once you finish the program you will soon be able to rebuild your credit.

Myth #4: The debt settlement company can’t guarantee that I will get a settlement; they will just take my money and leave me with the full amount to pay.

Fact: Most debt settlement companies offer guarantees that protect you if they are unable to settle on your account. For example, some debt settlement companies will offer a refund or the difference refunded if they are unable to settle for less than 65% across the board on your accounts. Just make sure when you choose a debt settlement company, you check to make sure they offer some type of guarantee in their contract.

Myth #5: I will have to pay taxes on all of the forgiven money.

Fact: If more than $600 of your debt is forgiven, the IRS considers the amount as taxable income. However, if your debt is greater than the amount of assets you own (which is highly likely if you are deeply in debt), you may not have to report the forgiven debt. So, you probably will not have to pay taxes in some cases. Of course, you should contact a tax professional to fully understand your particular circumstances.

Myth #6: Bankruptcy is much easier because I won’t have to pay anything.

Fact: The new bankruptcy laws make it more difficult to declare Chapter 7 Bankruptcy, which is the bankruptcy that forgives your debts. The court fees may have also been recently increased; plus, a lawyer can be extremely expensive, and you will have to pay them at a time when you obviously have little cash. With Chapter 13 Bankruptcy you may have to pay what the court determines and a strict budget is often created so you are able to pay your bills. And this is only what you pay monetarily! Many people also develop a loss of self-esteem or

guarantees that protect you if they are unable to settle on your account. For example, some debt settlement companies will offer a refund or the difference refunded if they are unable to settle for less than 65% across the board on your accounts. Just make sure when you choose a debt settlement company, you check to make sure they offer some type of guarantee in their contract.

Myth #5: I will have to pay taxes on all of the forgiven money.

Fact: If more than $600 of your debt is forgiven, the IRS considers the amount as taxable income. However, if your debt is greater than the amount of assets you own (which is highly likely if you are deeply in debt), you may not have to report the forgiven debt. So, you probably will not have to pay taxes in some cases. Of course, you should contact a tax professional to fully understand your particular circumstances.

Myth #6: Bankruptcy is much easier because I won’t have to pay anything.

Fact: The new bankruptcy laws make it more difficult to declare Chapter 7 Bankruptcy, which is the bankruptcy that forgives your debts. The court fees may have also been recently increased; plus, a lawyer can be extremely expensive, and you will have to pay them at a time when you obviously have little cash. With Chapter 13 Bankruptcy you may have to pay what the court determines and a strict budget is often created so you are able to pay your bills. And this is only what you pay monetarily! Many people also develop a loss of self-esteem or

ay taxes in some cases. Of course, you should contact a tax professional to fully understand your particular circumstances.

Myth #6: Bankruptcy is much easier because I won’t have to pay anything.

Fact: The new bankruptcy laws make it more difficult to declare Chapter 7 Bankruptcy, which is the bankruptcy that forgives your debts. The court fees may have also been recently increased; plus, a lawyer can be extremely expensive, and you will have to pay them at a time when you obviously have little cash. With Chapter 13 Bankruptcy you may have to pay what the court determines and a strict budget is often created so you are able to pay your bills. And this is only what you pay monetarily! Many people also develop a loss of self-esteem or depression because of the bankruptcy stigma.