Sign Legal Colorado Debt Settlement Agreement Forms For Free

Debt settlement is an agreement made between a creditor and a consumer in which the total debt balance owed is reduced and/or fees are waived, and the reduced debt amount is paid in a lump sum instead of revolving monthly.

A settlement agreement should contain eight facts, including a description of the debt, the amount owed, the original creditor, and any account numbers. Make clear that the amount you pay brings the debt to $0 and closes the matter entirely.

If you settled that $10,000 debt for $5,000, then $5,000 was forgiven. That $5,000 is likely to be taxable income, that will have to be reported on your income taxes. The debt settlement process typically takes three-to-four years.

Your debt settlement proposal letter must be formal and clearly state your intentions, as well as what you expect from your creditors. You should also include all the key information your creditor will need to locate your account on their system, which includes: Your full name used on the account. Your full address.

Debt settlement is a practice that allows you to pay a lump sum that's typically less than the amount you owe to resolve, or ?settle,? your debt. It's a service that's typically offered by third-party companies that claim to reduce your debt by negotiating a settlement with your creditor.

Debt resolution means working out an agreement with your creditors to pay less than the full amount you owe. You can negotiate with creditors yourself or work with a professional debt resolution company. A debt resolution program can take two to four years to complete.