Understanding the obligations you can and can’t settle.
Making a debt settlement offer may be able to help you get out of debt and avoid bankruptcy when you cannot feasibly pay your debts back in-full no matter how much time you are given. It’s not the safest option and you should always look into other debt relief strategies before you decide to settle, but if in the right circumstances debt settlement offers may be able to help you eliminate enough debt to get your finances back on track so yo can protect your assets and move forward.
However, not all can be discharged through a settlement program, so it’s important to know what you can do and what will work before you decide to move forward. The information below can help you understand whether or not settlement is the right choice for you. If you need help, call us or complete the form to connect with the right experts for your unique situation.
Debts that cannot be settled
Debt settlement programs allow you to settle a wide range of debt problems, but not every debt can be settled. Whether it’s because you’re still under obligation for repayment or it’s a debt that you’re legally obligated to repay in-full, sometimes you can’t use settlement programs to solve your problems.
The following types of debts cannot be settled with a debt settlement offer:
- Current mortgage
- Second/third mortgage
- Any home equity line of credit
- Any type of Sallie Mae account
- Current apartment lease
- Federal or government-backed student loans
- Current or pending wage garnishments / judgments / litigation
- Court-ordered child support / alimony
- Criminal fines and penalties
- Military Star cards
- Current provider utility bills
- Current provider cell phone bills
- Back taxes
- Casino debt
- Motorcycle credit cards
- Bank overdraft fees
- Secured lines of credit
- Rent-to-own accounts
- Car repair bills
- Attorney fees
True or false: IRS and state tax debt cannot be settled for less than you owe; it must be repaid in-full.
Tip: Tax debt can be settled, but not in a debt settlement program. You must settle this debt separately.
If you’re have problems with debts that can’t be settled, it usually doesn’t mean that you’re totally stuck and without options. Call us or complete the form to the right to connect with the professionals and programs you need. For example, you may be able to settle IRS tax debt with a repayment or settlement plan.
Debts that CAN be Settled
Of course many debts can be settled and these kinds of debts usually make up the majority of a consumer’s total debt burden. If you are struggling with some of the above types of debt, you may be able to make a debt settlement offer on other debts from the below list to provide relief. With a reduced total debt burden, you would have more money available to pay back anything you have outstanding from the above list.
These kinds of debts can be settled:
- Credit cards
- Unsecured personal loans
- Credit Union unsecured loans and credit cards
- Apartment leases (cannot be your current residence)
- Mortgage “short-pay” balances (you lost your home, but still owe money)
- Retail store cards
- Gas cards
- Auto repossessions (balance remaining after vehicle was taken)
- Student loans not backed by the government
- Cell phone bill (cannot be from your current provider)
- Utility bills (cannot be from your provider)
- Medical bills already sent to collections
- Some types of payday loans