Debt Negotiations Guide | Colorado Bankruptcy | 5280Law

Debt Negotiations Guide

Are you deeply indebted but have a large income or assets you might lose in bankruptcy? We can help!

Our satisfied clients have experienced significant debt relief having us settle some or all of their debts instead of filing for bankruptcy. Occasionally a repayment plan can be established, but the best results come from lump-sum settlement. We are often able to settle your debts for significantly less than you owe with a lump sum settlement. In one case, we were able to negotiate a $120,000 debt to a full and final settlement of only $10,000! While this was an unusually good outcome, on average we can settle most debts for approximately 50% of the balance owing. Here's how it works:

  • We offer your creditors a reduced sum to settle your balances.
  • We negotiate, negotiate, negotiate to get you the best deal!
  • We bring the offer to you for approval.
  • If you accept, we get the settlement DONE.

While there are many upsides to settling your debts, such as no more monthly payments or creditor harassment, there are a few downsides:

  • Any portion of the debt that is forgiven may have to be included as income on your taxes for the year the debt was forgiven. Depending on circumstances, your creditors are required to provide you with a Form 1099 for the portion of the debt they forgave. This could lead to a significant tax liability depending on circumstances. If you are considering debt settlement, we strongly urge you to seek advice from a competent tax professional.
  • Your credit rating may decrease somewhat, especially if you have been current on all your payments to date. However, if your credit cards are completely maxed and you're only making minimum payments, settlement may actually improve your credit score.

While every situation is different, we can help you explore your options.
Give us a call today to discuss your situation!