Covid, Loss of Income, Debt, Bills...       What Can I Do?

We've all been though a very unusual and stressful couple of years due to Covid and the resulting ramifications such as:

  • Personal illness 
  • Family illness 
  • Loss of Income 
  • Unemployment



Were you one of so many people who were forced to use credit cards in order to meet their basic needs?

If so, you may find yourself with more debt requiring more payments than you can afford.


As stressful as this is, you have options.

Let's say that you've accumulated $10,000, $20,000 or more of various credit card or other unsecured debts such as:

  1. Medical bills
  2. Store Cards, or even
  3. Personal Bank loans

The total minimum monthly payment due each month is just too much for you right now.

                             What can you do?

Many people are forced to miss payments or use one card to make payments on the others.

Although you know this is a terrible idea, you have no other choice.

Another option may be to pull money out of your home equity through an equity line of credit or even refinancing your mortgage.

Again, not always the best idea, but what else can you do?

Maybe you have a parent, family member or friend who will loan you money.

I've seen this many times and the results are not pretty!

                           OK...What are my options???

Your credit card company may send you an offer to modify your payment options.

Even though this may sound good, usually, this is not a very good idea!

There are programs that may reduce and/or eliminate interest and fees.

These used to be referred to as "Credit Counseling" or "Debt Management" programs.

The problem with these type of programs is that even though the interest may be lowered and "over-the-limit" or "late fees" may be forgiven, the over-all payment is about what you should be paying now!

Unfortunately, some people decide to file for Bankruptcy.  If you financial hardship is bad enough, then Bankruptcy may be your only option.

But, you need to understand that there are several types of Bankruptcy and depending on your particular situation, you may or may not qualify.

Bankruptcy will stay on your record for 7-10 years, depending on the type of Bankruptcy you choose.

With a Bankruptcy on your record, you will find it more difficult to rent an apartment, qualify for a car loan or even hurt your chances of landing a job.

Although Bankruptcy may be the right option for you, be sure to think it through!

Here's an article that may help:

             "Bankruptcy: How it Works, Types and Consequences"


                     What about Debt Settlement?

Once your unsecured accounts (mainly discussing credit cards) become delinquent 3-4 months, they most likely will be turned over to the credit card's internal recovery department, assigned to a collection agency or sold to a debt buyer.

This is when there should be an opportunity to settle your debt for less than the total balance due.

A lump sum may be required or a good settlement with monthly payments (with no more interest) can be negotiated.

Even though you can do-it-yourself, negotiating with debt collectors can be very frustrating, time consuming and stressful!

You want to find a company that is highly rated with the Better Business Bureau as well as registered with the state.

Does a Debt Settlement Program Work?

After negotiating a settlement, a settlement agreement is sent.

Then, the settlement is either paid in a lump sum (if funds are available) or paid in monthly payments without any more interest.

Recent Settlements See what we have  done for our clients!


FREE  Debt Elimination Summary


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Tags: debt relief solutions, debt elimination without bankrupcy, debt settlement vs bankruptcy, debt settlement in oregon, alternatives to bankruptcy

What To Do If You Receive a 1099-C

what to do if you receive a 1099-C

Have you had a debt settled for less than you owe?  If so, chances are pretty good that you also received a 1099-C for the amount of the "forgiven" debt amount.  WHAT?  How can that be possible? 

Unfortunately, if you settle your debts, the forgiven amount is considered taxable income.  However, you don't necessarily have to included it as taxable income.  Read on to hear Bob's story and how he was able to avoid paying taxes on his forgiven debt.

How to avoid paying taxes if you receive a 1099-C for FORGIVEN DEBT

Bob lost his job and started using several credit cards to make ends meet. He was paying for groceries, gas, and even had to take a cash advance once in a while to survive.Bob had every intention of paying off the cards, but due to our country's severe economic downturn, he could not find a job.

After about a year or so, he had added another $10,000 to his cards, making the total of all his credit cards to be about $22,000!The minimum payments on all of them totaled a little over $500 per month and he just couldn't meet his obligation.  After 3-4 months of non payment, most of his cards went into collections, debt collectors started

Bob had heard about DEBT SETTLEMENT and DEBT MANAGEMENT, but didn't know if he qualified.

After a FREE COUNSULING SESSION, it was clear that he could not qualify for the Debt Management Program and therefore chose to enroll in the Debt Settlement Program.

Let's see what happened during the Debt Settlement Program:

After searching the net and talking with several companies, Bob had chosen a reputable Debt Settlement Company to help him settle his debts.

His total debt was settled at an average of 40% of what he owed, so his creditors FORGAVE about $13,000 of debt.

Because the amount of the forgiven debt was over $600, Bob's creditor reported the settlement to the IRS and mailed him a 1099-C.  The 1099-C basically said that $13,000 had been forgiven and he needed to report that amount as additional income for the taxt year the forgiveness was granted.

But his Debt Settlement Company helped him understand that he was not going to be liable for the additional income and resulting tax on that income.

They provided him with a information about how to file IRS Form 982 and the other documents he needed to provide with his taxes.

IRS Form 4681, says that if, at the time of forgiveness, you were INSOLVENT (meaning your liabilities were greater than your assets), then the forgiven amount DID NOT HAVE TO BE INCLUDED as additional income!

Since Bob had completed an Asset vs. Liabilities worksheet, provided by his Debt Settlement Company, he was able to completely avoid any additional tax on the settlement or "forgiven" debt shown on the 1099-C!

If you have received a 1099-C and need help, we can help, please let us know!


Tags: debt collection, credit card debt, debt settlement, debt settlement vs bankruptcy, debt settlement in oregon, 1099-C, IRS Form 982, IRS Form 4681, debt management, additional taxes, IRS 4681

5 Tips on How to Eliminate Credit Card Debt

how to eliminate credit card debtHere are 5 tips on how to eliminate credit card debt that you can use:


Enough is enough!  You cannot continue to charge up your credit cards and ever hope to pay them off.

Suggestion... Keep the lowest interest rate card with the smallest balance for EMERGENCIES ONLY and DESTROY THE OTHER CARDS. It is only after you realize how deep in debt you are that you will stop using credit.


You might consider consolidating your credit cards to one card that will offer a low or zero rate initially and then a reasonable rate (10% or less) after.

But be careful!  Some of the advertisements have a lot of small print that can end up costing you more money.

  • Hidden rates
  • Hidden fees

You can also call your creditors and ask for a lower rate. Tell them you are shopping around for better rates and will be transferring your balance if they will not help you.


 #3 Use the SNOWBALL METHOD to pay off your credit cards.

The method is simple, yet very effective if:

  • You are paying at least the minimum on all of your cards now
  • You have additional money to increase the payment on one of the cards
The Debt Snowball Methodwill help you pay off your cards in a fraction of the time and save thousands of dollars in interest and fees!

If you cannot afford to do the SNOWBALL METHOD, then consider:


A Debt Management Program will allow you to have:

  • One payment per month
  • It may or may not be lower than the total of all of your minimum payments due now
  • Will reduce interest rates and fees
  • Help you become debt free in 4-5 years!

If you do not qualify for a Debt Management Program or cannot afford the payment, then you should consider tip #5.


A Debt Settlement Program is suitable for those under severe financial hardship such as:

  • Unemployed
  • Divorce
  • Medical hardship
  • Just not earning enough income to continue paying on the credit cards

A  Debt Settlement Program will negotiate settlements on your unsecured debts including:

  • credit cards
  • store cards
  • personal (unsecured loans)
  • repossessions
  • medical bills

The final settlement amount can be 50% or less than the balance AND your payment will be a lot less than the required minimum payments or a DMP payment.

Before you consider bankruptcy, please contact us for a FREE FINANCIAL EVALUATION.

how to eliminate credit card debt



Tags: credit card debt elimination, debt settlement vs bankruptcy, debt management

Is Debt Settlement Better Than Bankrupcty?

is debt settlement better than bankruptcy

As the Director of Settlement Services at Debt Relief, I am often asked...

"Is Debt Settlement better than bankruptcy?" 

I wish that this was a simple answer, but the correct answer is that is all depends.

In this case I am talking about unsecured debt such as:

  • Credit Cards
  • Unsecured Personal Loans
  • Store Card Accounts
  • Medical Bills

Your Options

When Unsecured Debt gets OUT OF CONTROL and you CANNOT AFFORD to continue making monthly payments, what are you options?

1.  In rare cases, you may be able to secure a 2nd mortgage or Equity Line of Credit to use to pay off all of your accounts.

While many feel like this is unwise, it may be to your advantage to combine or consolidate all of your high interest accounts into one loan that usually has a much smaller interest rate.

Of course, the danger is that if you default on this loan, your home could be in jeapordy!

Also, if your home is foreclosed on, the 2nd mortgage and/or equity line of credit may not be dismissed!

2.  If you qualify, a DEBT MANAGEMENT PROGRAM may be a good option. In a Debt Management Program, your creditors usually agree to lower your interest rate and take a fixed payment for approximately 48 months depending on the account.

Often a common missconception, A Debt Management Program is not a factor in determining your credit score.

The problem with a Debt Management Program is that, many times, the total payment may not be less (and is some cases more) than your current total monthly payments!

3.  DEBT SETTLEMENT is an option that you should consider if you cannot quailfy for or cannot afford the payment of a Debt Management Program and do not have or cannot qualify for a 2nd mortgage or equity line of credit.

In a Debt Settlement Program, your accounts will become delinquent and in most cases charged off by the original creditor and placed with a debt collector.  Once your reserve account has sufficient funds, a settlement of 50% or less can be negotiated and the debt is now classified as "settled-as-agreed".

Even though your credit report will show late payments, eventually all of your accounts will show a  ZERO BALANCE! At this point, your credit score will start to IMPROVE!

Many clients have enrolled in our Debt Settlement Program with $25,000, $50,000 or in some cases over $100,000 of combined unsecured credit and have completed the program, becoming totally DEBT FREE and saving 50% or more!

  • If you have no access to home equity or cannot qualify for a consolidation loan...
  • If you cannot afford the total monthly payment of a Debt Management Program...
  • If you cannot afford a reasonable monthly amount for a Debt Settlement Program...

4. ...then BANKRUPTCY may be you only option.

Bankruptcy is a very serious decision and should only be considered after investigating ALL OF YOUR OPTIONS. However, qualifying for a Chapter 7 bankruptcy is not an option for most people after the Bankruptcy laws changed on 2005.

Most people will only qualify for a Chapter 13 bankruptcy and will pay into a plan for up to 5 years before their debts are discharged.

You may have heard that Debt Settlement Programa charge huge fees! While the debt settlement company will and should earn a fee, recent legislation has gone a long way in stopping bad debt settlement companies.

You should always check out a Debt Settlement Company (or any company) at the Better Business Bureau.

With a Chapter 13 bankruptcy, your creditors will get pennies-on-the-dollar and your bankruptcy attorney will earn a fee. This is usually calculated in the monthly payment you will be making to your bankruptcy court.

So, is Debt Settlement or Bankruptcy the best option for you?

Our Debt Solutions Specialist can help you determine which option is the best choice for your situation.  If you would like a FREE CONSULTATION WITH NO OBLIGATION to explore your options based on your particular circumstances, give us a call at 1-877-492-4109 or click on the link below!








Tags: debt settlement, debt elimination without bankrupcy, debt settlement vs bankruptcy

Your credit report card

credit report card

Your credit score is like a financial report card, and like a report card you are usually not the only one to see it. Applying for loans, mortgages, bank accounts, and new cars loans all require a credit check. There is much more that goes into building a good credit score than just paying your bills on time. To you understand just what does build and destroy a credit score, I have compiled the following list.

  1. Accounts
    Depending on the type of accounts you hold, and how many, your credit could gain or loose points. Generally, a good mix of account types makes for good credit. Having a mortgage, car loan, and a couple credit cards in good standing should leave you with a lot of valuable credit points.
  2. Payment History
    Your payment history on loans and credit cards can affect your credit for years to come. Making payments on time will add points to your credit credit score. On the other hand, missing payments often can result in the loss up to 100 points!
  3. Owed Debt
    If you have debt then it may drop your credit score. However, some debt is actually good for your credit score. Having credit cards and mortgages, can help build your credit if you regularly make your payments. However, if you owe a lot of debt to many different lenders, it could potentially destroy your credit. A good rule of thumb is to keep your loans in check, and never borrow more than you can pay off. credit report card
  4. Credit Age
    If in good standing, having credit for a long time should improve your credit score. Try keeping accounts open for a long time and making payments regularly and on time. If you are new to the credit game and are just starting to build your score, then you want to make sure and open an account that you know you will be able to keep.
  5. Loan History
    Taking out a loan does not necessarily take down your credit score. Actually, taking out a loan for something like a car could help your credit. However, late payments or very low payments and high interest could get you in to trouble and hurt your credit score. Always think of your loan in the long term before you take one out.
  6. Credit Checks
    You may be surprised to know that having someone check your credit (i.e. a new employer, landlord, or lender) will drop it by few points. This is frustrating, but an unavoidable fact. To help prevent yourself from missing out on too many points, try to reduce to the number of times you have your credit checked, and only have it done when absolutely necessary. Read More --> Hard Pull vs Soft Pull: What's the Difference?
  7. Unpaid Parking or Library Fines
    Although they may seem unrelated to your credit, having unpaid parking violations, or library fines can negatively affect your credit score. It is always a good idea to pay off any debt, regardless of how small or seemingly unrelated.
  8. New Credit
    Getting too many credit cards is a sure way to hurt your credit score, no matter if you make timely payments or not. In this case, consolidating some cards could help you in the future. While consolidation will normally drop your score by a few points, building credit will be easier from then on.
  9. Collections History
    Having a history of being given over to collections does not look pretty on a credit report. If you are looking to get a big loan or buy a house, try to take care of any situations involving a collections agency first. Over time, the scar of being put in collections should start to fade, but not until you pay off the debt and start rebuilding your points.
  10. Bankruptcy
    Filing bankruptcy is never fun to go through, and rarely good for your credit. If you have or need to file bankruptcy, be prepared for a plummet in your score. There are some options to help you avoid bankruptcy all together.  Bankruptcy should only ever be used a s a last resort.  However, bankruptcy can be the best option for someone who realistically has no way of ever paying their debt down.

Does your Credit Report Card have room for improvement?

Now that you understand what can help and hurt your credit score, what does your credit report card look like?  If you are struggling to get your credit "GPA" up, you might need a tutor.  The Solutions Specialist at Debt Relief can help you work though your credit issues and find a solution tht best fits your needs. 


Tags: debt settlement vs bankruptcy, budget, hard pull vs soft pull, credit report card

Debt Settlement vs. Bankruptcy: Weighing the Options

debt settlement vs bankruptcyDebt Settlement vs. Bankruptcy?

Choosing between debt settlement and bankruptcy in while facing a huge pile of debt is a tough decision to make. It is important to understand that although both debt settlement and bankruptcy offer Debt Relief, they work very differently. In order to make an informed decision, you need to understand the difference.

The Proccess of Debt Settlement & Bankruptcy:

Debt settlement is a debt reduction program where the creditor accepts a reduced amount from the debtor, in order to settle the account in full. A great Debt Settlement Program can and will settle your debt for 50% or less of your total debt. Once you have completed the Debt Settlement Program, the creditor will report your account to the Credit Bureau as “settled” or “paid”.

Bankruptcy is a court based procedure, which is initiated by the debtor. Consumers are permitted to file personal bankruptcy under Chapter 7 or Chapter 13 of Title 11 of the Federal Bankruptcy Code.

During Chapter 7 Bankruptcy, the court sells off your non-exempt assets and uses the proceeds to pay your creditors. Remaining debts are discharged by the court and you are declared debt-free.

Chapter 13 bankruptcy is a reorganization of your existing debts. The court appointed trustee will set up a repayment plan to help you pay off your debts comfortably within 3-5 years.

Once your bankruptcy is complete, you are relieved of all debts and allowed to rebuild your finances. However, bankruptcy procedures are usually much more complicated compared to debt settlement.

How will Debt Settlement and Bankruptcy effect on your credit score?

Bankruptcy can hurt your credit score by 200-250 points. The total extent of the damage depends on the nature of the other negative remarks you have on your credit report. Bankruptcy remains on your credit report for 7-10 years, which will prevent you from getting credit in the future.

Debt settlement will lower your credit score at first, but as you keep making payments on time, your credit score increases.

So, which option is better?

Debt settlement is preferable to bankruptcy if you are able to make a reduced monthly payment. You should explore all possible debt relief options before you file for bankruptcy.

Debt settlement gives you the following benefits:

  • You pay less and get rid of your debts completely!
  • You will get out of debt much faster!
  • You avoid losing your home and car!
  • Debt settlement does not damage your credit score as badly as bankruptcy does!

Tags: debt relief programs, debt settlement vs bankruptcy, alternatives to bankruptcy