As common as debt is in American daily life, you’ll be surprised to know that a lot of people who’ve borrowed money or deferred payments aren’t aware of the nuances surrounding their situation. In every debt agreement we enter, it’s important to know the full implications of the stipulated interest rates, penalties and sanctions involved with delinquency. Not having the right information can send you down a path of bad decisions that can worsen your debt situation.

If you’ve incurred significant debt due to job loss, an unexpected divorce, sickness in the family or bad spending habits, you need to be aware of the possibilities that come with every action you take. Accurate information and insights from people who know the ins and outs of the debt relief industry can help you formulate an action plan that will relieve you of your financial pressures. Below is a list of questions that CreditAssociates frequently receives and our best answers to each one:

Can I be sued over Debt?

If you and your creditor entered a legally binding agreement, you can be held legally liable for unpaid dues. However, this isn’t a common practice among creditors. Most of them would rather send you frequent reminders via phone calls or letters to harass you into paying back what you owe. This is because suing you is a long and costly process that may not be worth the principal of what you owe them.

What Happens When I Can’t Pay My Debts?

This depends on the terms that you agreed to when you signed up with your creditor. Typically, you will incur significant penalties for payments that were made past their due dates. This will add to the principal amount owed and the interest that is inherent in deferred payments. If bills continue to go unpaid, the penalties and interest can drastically inflate your debt and make it harder to pay in the long run.

As long as your debts are not paid, you will receive frequent calls reminding you of your obligations. You will also be sent letters by regular mail containing the same messages. The idea is to make you painfully aware of your delinquency and compel you to pay. Your creditors may also send your information to collection agencies that will make your life even more uncomfortable. As a last resort, your creditor may file a lawsuit to hold you legally accountable for your actions.

Am I Qualified for Debt Relief?

Qualification largely depends on the type of debt that you have. If it falls under one of these categories, there’s a good chance we can provide assistance:

  • Credit card debt
  • Hospital/medical bills
  • Department store credit
  • Unsecured personal loans

We are not able to accommodate mortgages, car loans or any type of debt with collateral.

How Do I Get Started With Debt Relief?

You need to carefully assess your situation and determine if you can still pay the debt off on your own or if you’re in such bad shape financially that you’re considering declaring bankruptcy. If you’re having a really tough time making ends meet, you belong to the latter crowd and you should get into a debt relief program before your situation gets worse.

Get started by answering some basic questions here and providing us with information on our secure website. You may also call us toll free at 1-888-516-2397 where our debt relief experts can walk you through the process.

Why Debt Settlement is the best option

With a successfully-negotiated settlement, you can avoid overbearing processes like consolidation (combining debts from several creditors), bankruptcy (filing publicly), and debt management (can take up to twice as long as debt settlement and be twice as expensive).

There are multiple ways to relieve your debt, but debt settlement can be the best option for most people. And you’re in luck, because that’s CreditAssociates’ specialty.

Debt Settlement reduces the amount of money owed, lowers your monthly program payments and eliminates your debt in a shorter amount of time. Good credit or collateral are not required to participate.

With debt settlement, there will be no transfer of financial liabilities. This involves having us communicate with your creditor in an effort to have some of your debt forgiven in return for a one-time payment via lump sum that will be put together in a special account. Typically, we’re able to reduce debt by significant percentages.

Will My Credit be Affected?

You may be able to settle a reduced version of your debt and it may be taken off the books, but your credit report will show that it wasn’t done under ideal circumstances and that could negatively affect your credit.

Keep in mind that debt settlement is better overall for your credit than continuously missing bill payments or declaring bankruptcy.

Can You Help Me Restore My Credit?

No, but we can give you basic advice on how to nurse your credit score back to good health. As long as you practice the principles of being a good payer and a responsible spender after you settle your debt, your credit score should gradually gravitate back to normal levels after a while.

Will I Get Taxed for Forgiven Debt?

This question will be best answered by a licensed tax advisor. However, we can say from experience that debts exceeding $600 need to be reported to the IRS when they’re forgiven by creditors. In cases where the IRS determines that you owe more than you own, you may be covered by the “insolvency exclusion” which absolves you from any tax responsibilities.

Hopefully, these answers shed light on areas of debt and credit that are relevant to your situation. If you need more help, you can visit our website and get free and instant assistance today.

To learn more about debt relief solutions and how to start living with financial freedom, contact CreditAssociates for a free consultation or use our Savings Estimator to see how much you could save.

© CreditAssociates, LLC, 5050 Quorum Dr., Suite 700, Dallas, TX 75254 • 2019 All Rights Reserved. Services not available in all states, including New Jersey. Where applicable, CreditAssociates will refer you to an accredited service provider who can provide debt relief services you need.