What You Need To Know About Florida Debt Settlement….

PRLog (Press Release) - Jan 25, 2010 -
If you have a lot of debt and you are trying to avoid a Florida Bankruptcy, then Florida Debt Settlement could be the solution you are looking for.

"Many consumers tend to confuse Florida Debt Settlement with Florida Debt Consolidation and Florida Credit Counseling, but none of these options are one in the same, they each have their own advantages and disadvantages, says Marlon Baugh Florida Debt Elimination Expert."

With Florida Debt Consolidation, consumers are offered one loan which combines all of their smaller loans and at a lower interest rate and in some cases extended terms to give the borrower lower payments.

With Florida Credit Counseling, these companies attempt to reduce the interest rate and or charges so that the consumer will pay off the debt in a shorter period of time.  Unlike Florida Debt Settlement none of these other options actually gets the balance reduced.

The way that a debt settlement program works is that the consumer will need to save up lump sums of cash, normally done by stop making their payments to their credit card companies and then the debt settlement company will use the cash saved to negotiate a balance reduction to pay the debt off in full, normally around 50% of the balance.  So instead of offering a loan or some type of repayment plan, debt settlement will get rid of the debt quicker and for a lesser amount than what was actually owed.

So now that you know the advantages of debt settlement, let’s look at some of the disadvantages.

1.   Credit Score:  Since in most cases the consumer will have to stop making their payments, then they will see their credit score drop because of the late payments.  In some instances the debt settlement company can negotiate to have these late payments removed to reduce the negative impact to the consumer’s credit report.
2.   Beware of Scam Artists:  Since this industry isn’t highly regulated yet, there are a lot of scam artist out there that are setting up shop, doing heavy marketing to collect as much upfront fees as possible and then they shut down and re open under a new name.  The other thing to be careful of is these companies that are not experience in the field of debt settlement, their inexperience can hurt you rather than help you.
3.   Lawsuits:  While nationwide statistics show that there is only a 2% chance of this happening, it is definitely a possibility consumers need to consider.  As lawsuits can lead to wage garnishments and liens against your assets.
4.   Taxes:  If you credit card company agrees to accept less that the full amount you owe them, then that forgiven amount, which is the difference between what you owe and what you actually paid the loan off for, is typically considered to be forgiven debt by the IRS and is taxable income.

Florida - based debt elimination expert Marlon Baugh specializes in providing information to consumers that allows them to make informed decisions about their credit cards and other debts so they can learn the insider secrets that can save them thousands of dollars over the life of their loan.

Marlon Baugh is available for interviews and will welcome all your debt related questions.

Call 954-678-5796 Ext.1 for a Free No-Obligation Consultation or visit

http://www.specializedfinancialsolutions.com/debtrelief.htm

Marlon Baugh is a nationally-known debt elimination expert. Since 2003, he has specialized in helping homeowners get out of Bankruptcy and  Foreclosure. For more insider reports please visit http://www.specializedfinancialsolutions.com/debtrelief.htm