Part of a credit card agreement is that the Mississippi cardholder will pay back charges, plus fees and interest. In some cases, though, credit card companies have incentives to lower the amount outstanding, or they realize it won’t be worth it to pursue the cardholder with collections efforts. For people who are going through serious financial hardship, it may seem impossible to get out. If it is approached correctly, debt settlement can be a way to satisfy these types of obligations.

Some debt settlement companies give poor advice at times, though, like advising clients not to communicate, pay or work with creditors. This can be a dangerous tactic, and most cardholders will get more out of calling their credit card companies directly or asking an attorney to communicate with creditors on their behalf.

Debt settlement can harm a person’s credit score, because the credit reporting agencies are notified that the obligation has been settled for less than the amount owed. The cardholder’s credit score suffers for up to seven years before the note comes off. In some cases, the Internal Revenue Service may demand that taxes are paid on the amount of credit card debt forgiven. If the amount forgiven is at least $600, the taxpayer will usually be required to pay taxes. Tax liability may be reduced, though, if the debtor is insolvent.

An attorney might be able to help people in Mississippi who are struggling to pay down debts. Debt settlement may be an option for some. Debt restructuring, consolidation or filing for bankruptcy may make sense for others. An attorney might be able to provide advice regarding the different debt reduction or elimination options available.

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