How long will Debt Settlement stay on your credit report? Most likely 7 years after you settle the debt. If all your debts can not be settled now, when will you be finished? 2 Years? 5 years? And then the clock will start. Your credit is trashed now anyway. If you file for bankruptcy, the clock start immediately. Chapter 7 will stay on your credit report for 10 years, but that does not mean you will not be able to get credit during that period. In fact, some people find they receive credit offers a few months after their case is finished. Chapter 13 will stay on you credit report for 7 years from the filing date. You have to decide which path is better for you.
Most Everyone is going through hard times right now. If you have the money on hand to settle your debts out of pocket right now this probably makes the most sense. As long as you are not taking it from your retirement, or your house. If you are borrowing or accepting gifts from relatives, can THEY really afford to pay for your mistakes? You are going through a very emotional and trying time. Don’t let their love and need to help you hurt them financially. You need to step back, and take responsibility for where you are. You don’t want to hurt the rest of your family in the process.
The Tax Man. Debts discharged in a bankruptcy are not taxable, though not all debts are discharged. This is a good thing to discuss with a bankruptcy lawyer. When a creditor “forgives” part of a debt you owe them, they must report this to the IRS. Depending on your situation, you may owe taxes on this “forgiven” debt. Please check with your accountant or tax preparer for more information. Taxes are not usually dischargeable in bankruptcy.
A quick note on things and our emotional attachment to them. Right now you are in a mess. Many people are. You are not alone. Do everything you can to avoid this, but when you reach the end, and you can do no more, let your pride go, and get your family back on a healthy road. If you need to let go of your house to have an affordable life, then let it go. Yes it will hurt. It hurt me and my wife when we let go of ours. It hurt really really bad. But, there is light on the other side. It does get better. Take care of your family.
Don’t take it personally. Millions of people are in the same situation you are right now. You are not alone! This is not the end, just a stage you are passing through. Don’t let it get you down. Remember to your creditors you are just a number. Yes, you may have been with them for years, and you feel an obligation to pay your debts. However, you cannot plan for circumstances beyond your control. The more personal you allow your creditors to make you feel, the less control you have over the situation. They plan for losses. They are trying to lose as little as possible on you. Get the best deal you can for yourself and your family. Then learn from this and never look back.
Do your Homework. In school most of us did not like homework. This is a time you have to tough it out! There are a great many things you need to learn about the different options available to you. Ask yourself first, “Does this company or process have my best interest at heart?” Or are they only looking to line their pockets, or act as another collector for my creditors? Only you can answer these questions for yourself. But you need to know all the details of all your options!! Talk to a credit counseling agency. Get a free consultation with a Bankruptcy lawyer. Get a package from a debt settlement company. Learn everything you can, and then make an informed decision!
What have you learned, and what will you teach? For most some unexpected disaster brought us here. Things we never could have seen or planned for. What have you learned from this? What will you teach by sharing your experience with others and with your children? Getting over this emotionally and psychologically is a lot easier if you can see the end of the process, and know that something good will come from it at the end. Don’t let others, especially future generations, get into this same trap. Learn and TEACH how to handle money, and how to try your best to plan for rainy days. Start teaching today!!
Are you at the end of your rope? Want to learn from my experience? Visit to learn more. If you are looking for a great bankruptcy attorney please visit Bankruptcy Attorneys.
