Debt Settlement Tax Breaks

If, like most Americans, you find yourself mired in a yawning abyss of debt that fills your days and nights with a sense of hopelessness and dread and which offers little chance of escape for you, your children, or your children’s children, then you might be interested in new debt settlement tax breaks being offered by the government.

What is Debt Settlement?

If your debt has passed the point where you doubt you’ll ever be able to pay it off, debt settlement can potentially relieve your woes to the tune of up to 50%. Unlike debt consolidation, which requires you to pay the full value of your debts, or bankruptcy, which leaves you unable to borrow money for the better part of the next decade, debt settlement involves a structured negotiation with your creditors to accept a “settlement” wherein you pay but a fraction of what you owe. Creditors are often wont to accept such offers, because for them getting something out of you is better than nothing. It’s all a part of the cyclical give and take that makes the economy function.

What’s the Reason for Debt Settlement Tax Breaks?

Now, however, creditors are even more likely to go along with your offer of a debt settlement, because the government is stepping in to sweeten the pot. If a creditor accepts your offer and brokers some kind of debt settlement with you, then they’re typically entitled to pay no taxes or reduced taxes on the money that you do pay them. This helps them recoup their losses, and the government benefits because there are fewer people declaring bankruptcy (which is bad for the economy as a whole).

Only Your Attorney Can Steer You Right

Considering the above, now might well be the time for you to look into debt settlement with your various creditors. Be warned, however, that creditors are typically very unwilling to deal directly with debtors. If you call one and broach the subject of a debt settlement, they’ll probably just laugh you off. If you want to get anywhere, you need to hire an attorney to represent you. When the attorney communicates with your creditors, they’ll listen, and he or she will be able to leverage the new government tax breaks in order to make it more likely that they’ll award you a settlement of some kind. Debt is a miserable state to be in, and opportunities to escape don’t come around very often; be sure to take advantage of this one!

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