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The Consumer Financial Protection Bureau, the only federal agency devoted solely to watching out for and protecting the financial consumer, has serious concerns about consumers using online debt settlement companies:
“Warning: Dealing with debt settlement companies can be risky. Some debt settlement companies promise more than they can deliver. Some of your creditors may also refuse to work with the debt settlement company you choose. In many cases, the debt settlement company will be unable to settle all of your debts.”
Click the paragraph above to take you to the Agency’s website for the full article.
Warning: There could be tax consequences for debt forgiveness. If a portion of your debt is forgiven by the creditor, it could be counted as taxable income on your federal income taxes. You may want to consult a tax advisor or tax attorney to learn how forgiven debt affects your federal income tax.
Click the paragraph above about tax consequences of settling debt and to read the full article on the warnings of using debt settlement companies.
Finally, the CFPB offers some sound advice:
Also, you may want to consider consulting a bankruptcy attorney, who may be able to provide you with your options under the law. Some bankruptcy attorneys will speak to you initially free of charge.
Become an informed consumer !