Debt Redemption explains Debt Relief and Debt Consolidation in Texas

Debt Consolidation Texas is sometimes debt settlement, another method of resolving debt that has gained popularity because of the enormous potential savings. In some cases obtaining debt relief in Texas through debt negotiation programs can cost less than a Chapter 13 bankruptcy. Debt settlement can be ideal for many people struggling financially, are behind in making their payments, or expect that they will fall behind soon. Research has shown a higher economic benefit for clients who complete debt settlement programs than traditional credit counseling. With Debt Consolidation in Texas, debt settlement programs are usually structured to resolve debt between 2 to 4 years but sometimes stretch to 5 years, depending on what is affordable monthly. The monthly cost has the potential to be less than half compared to making minimum payments and often much less when compared to a credit counseling program with a similar estimated length to resolve the debt.  

While credit counseling can negatively impact credit scores, so can debt negotiation. Your scores may even drop more compare to credit counseling because you will not be making normal monthly payments. Whether enrolled in any debt relief Texas program or not, credit scores are negatively impacted when you do not make at least the minimum payments.  While debt negotiation programs do not make monthly payments to your creditors, if you are already behind with your payments, the worst of the credit score damage may already be done. At that point, the focus should be on resolving your debt as quickly as possible so you can start rebuilding your credit scores as soon as possible. Since a debt negotiation program may be completed years sooner than a credit counseling program offering the same monthly cost, you may be able to start rebuilding your credit scores much faster by settling your debt.

Companies providing debt negotiation are not allowed to charge fees until they settle an account, and the settlement fees must be proportionate to the enrolled amount of the creditor settled. While in a debt settlement program, the monthly program payments accrue in a Special Purpose Account, which is essentially a savings account to build up funds to settle with your creditors and cover the negotiation fees. There is no quick and easy way to resolve debt if you do not have the funds to pay it off, so like other methods, there are few potential drawbacks of using debt settlement as a method of debt relief. The program length will always be an estimation that could be longer or shorter, depending on actual settlement amounts. The settlements could be higher or lower than estimated initially, but the estimation should be realistic and based upon a company’s historical settlements with your enrolled creditors. Some non-reputable debt settlement companies may quote numbers that are unrealistically low in an attempt to get you to sign up with them.

After a debt is settled, a creditor could send you a 1099-C for the amount of debt forgiven, meaning the forgiven portion could be considered taxable income. If this occurs, filing an IRS tax form 982 with your tax return may prevent you from paying income taxes on the forgiven debt. A tax advisor would be able to advise and assist in filing the form if needed.  Also, debt negotiation companies themselves cannot stop creditor attempts to collect until the debt settles. Creditors may call you, and there is a possibility a creditor could file a lawsuit against you in an effort to collect a debt before a negotiated settlement. Most debt settlement companies offer an optional pre-paid legal type of insurance provided by a third-party that may be able to assist in finding and hiring an attorney to help you if a creditor filed a lawsuit.

Debt Consolidation in Texas Debt Relief in Texas is available with Debt Redemption Texas Debt Relief.  The company is not a national debt relief company but rather a Texas debt relief company razor-focused on helping Texas residents to resolve often $20,000, $50,000 to $100,000 more of credit card debt and personal loans. They offer Texans both traditional credit counseling and debt negotiation. Because Debt Redemption only focuses on helping Texans with personalized service, they have developed an exclusive relationship with a highly awarded defense attorney who is possibly the best in Texas. The separate legal services are entirely optional and not required to use their services to negotiate debt. If you choose to hire the law firm in addition to Debt Redemption, then the attorney can enforce specific Texas consumer protection laws in the Texas Finance Code. By having an attorney deal with creditor harassment, their clients can receive peace of mind that removes a lot of the stress that would otherwise be very stressful. The Texas protections enforced are in addition to federal laws that most other states do not offer.

Furthermore, the optional legal representation is proactive and helps prevent creditors from filing lawsuits while debt is negotiated. All of your enrolled creditors will know you will have retained an experienced debt defense attorney upfront making it much less attractive for creditors to use litigation. If needed, the attorney will provide legal representation to defend a lawsuit if one were to still occur. Knowing who your attorney is upfront and having upfront preventative legal representation provides a much higher level of protection than companies reactionary “pre-paid legal” type services, which will try to find you an attorney only after a lawsuit is filed. Many Texans also choose Debt Redemption Texas Debt Relief for, Debt Consolidation in Texas, using Debt Settlement in Texas because their settlement fees are much lower compared to most other companies.  

If you are considering another debt relief company, call and ask about Debt Redemption’s lowest settlement fee guarantee. Also, the separate law firm will offer their legal services exclusively to Debt Redemption’s clients at an affordable rate.

By choosing both the optional legal protections and Debt Redemption’s debt negotiation services, your total cost may be competitive to companies only offering negotiation services, or “pre-paid legal” plans.  Debt Redemption’s unique arrangement with the law firm also puts them in a unique position to assist new clients who have pre-existing creditor lawsuits and judgments in an affordable manner.