Cancel credit card debt. It sound like a great way to get rid of your debt, doesn't it? Just hire a debt settlement company to get it canceled for you, and you'll never need to pay it off.
Well, as good as it sounds, there are a couple of things you need to know before going down that road.
1. Tax Implications
If you manage to get your credit card debt canceled, you need to keep in mind that whatever balance was canceled will to a taxable "income" for you this year.
Since the credit card companies, in essence, "You said amount the government wants to take their parts.
As you pay taxes on the amount and rate of tax, but will open on the hook for the tax season. You must ensure that the money to cover the tax liability timely.
And the IRS will not be so ready to satisfy the debt to terminate themCredit card companies would not think of being able to pay the debt settled so easily.
2. Legal implications
When working with a company solution, which does not have the same protection as you do when you file for bankruptcy.
So if you do not have minimum payments for your credit card company that can act (and likely), whether to lose ground.
This does not mean that you shouldBankruptcy, debt repayment, but it is something that you can be sure to note if you use the plan to always outside of the debt.
The key is to remember that nothing is free. If - or a company working on your behalf - you have to debit your credit card that promises that there will be a couple of catches you need to deal with.
