There are many options when it comes to addressing and dealing with debt problems. One popular method is working with a Debt Consolidation company. The idea behind a debt counseling company is that the company will work with your creditors to reach agreements to lower monthly payments or payoff credit accounts for less than the total amount owed. Generally, you make a monthly payment to the debt counseling company, and the company then uses those funds to eliminate debt.
This can be a very effective way to reduce monthly expenses and pay off debt. However, just like most things, there are pros and cons to tackling debt problems in this manner. Certainly, a debt counseling company can provide assistance and hope for someone struggling with debt. A good debt consolidation company will put together a plan that will satisfy each creditor while lowering monthly expenses. And, a debt counseling company has experience dealing with creditors that can be aggressive.
Unfortunately, debt counseling companies can’t always prevent creditors from taking additional collection actions; such a filing lawsuits. Debt counseling companies can’t force a creditor to agree to take smaller monthly payments or settle for a lessor amount. And, if an agreement can be reached with a creditor and the debt is paid for less than the full balance, there can be tax consequences resulting in a tax liability for negotiating a settlement.
Debt can be an overwhelming obstacle if not handled properly. Debt counseling can be a an effective way to address debt, but you must be aware of the pros and cons of debt counseling before you can decide if it is right for you. W M Law has three convenient locations in the Kansas City metro area: Olathe, KS, Independence, MO and Northland. Call 913-422-0909 for a FREE consultation with an attorney.
By Addam Fera, W M Law Attorney at Law