How to get out of debt is unfortunately becoming a very common question as our economy continues to suffer and if you at the place where you are finding it hard to pay the minimums on your credit cards, suffered a financial setback from a loss of job or medical problem or you are receiving harassing collection calls then you will want to consider having a debt relief company negotiate your debt down to a manageable level.
How to get out of debt How do debt settlement companies relieve your debt? These companies negotiate with your creditors to bring down the balance you owe.
Depending on how you decide to work with the company you will be able to consolidate your payments into one smaller payment, stop having to deal directly with the creditors and lower your debt by up to 60%.
What debts can you settle? Credit card, store/gas credit, and medical expenses are commonly settled however alimony, child support, taxes, mortgages, car loans and some student loans are not typically able to be included.
How do you benefit from a settlement? You will end up with a reduced balance allowing you to get your debt paid off faster, you will lower your monthly payments due, avoid late fees and over-the-limit fees from your creditors and avoid harassing phone calls.
Are there drawbacks? You will want to ask your debt relief company to try to negotiate your debts in your favor which ensures you do less damage to your credit score.
Also, the IRS will require you to pay taxes on this "forgiven" amount that your debt relief company settled for you.
However, the key is that most of the settlements are a way for you to get out of debt in 2 to 4 years and then you can start rebuilding your credit and recapture your life.