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Hi, I have approx 30k in credit card debt between my wife and I and am looking to see (cont)…

…if we can compile all of our debt into 1 debt settlement program rather than doing it seperately. Is this possible? Also, with the IRS taxing the “savings”, isn’t this just putting off paying the debt and then finding out that you have to start making payments to the IRS once you finally become debt free which can start the whole financial crisis all over again? Lastly, once a debt settlement company is on board, I stop attempting to pay the creditors until there is enough money in a trust account before the creditors are offered a settlement opportunity…does the debt settlement company notify the credit card company that i am enrolled into such a program before hand before things get into a legal matter or how does this typically work? I won’t file for bankruptcy for sure but do want to make sure that I can make those payments into the trust fund, i just don’t understand the process of dishing out cash to a company without really knowing for sure what the settlement is first..pretty scary thought! I’m married with 3 small children and am the only one working as my wife needs to stay at home with the children as childcare is more expensive then what she could bring home. I’m finding it difficult to find the information that is straight forward on what company i can trust to start the debt settlement process. A lot of questions and concerns here as I obviously do not want to make matter much worse and get myself into something I can’t pull out of. Can you attempt to answer my questions and what i need to do to find a big, reputable debt settlement company? I appreciate your time, thank you.

Answer:
You have obvoiusly read a great deal about the process which is great because your understanding of the debt settlement process is dead on. You will need to budget money for the tax bill you will get on the “savings” and, yes, a debt settlement program is never guaranteed.

You will have to pay into the trust account monthly without knowing what the settlement amount will be. It can be risky and there are lots of unknowns in the process which is why it is primarily used as a last resort before bankruptcy. Unfortunately, it’s not a perfect risk free solution but it does help many people who have no other options left on the table. Getting into debt can be relatively easy, getting out takes time, discipline, and somewhat of a leap of faith if you are forced into using professional debt relief company.

Here is an article I wrote with tips on finding good debt relief help.