Debt Help Getting Rid of Debt

4 Worst Ways To Pay Off Debt

Unless you’re insolvent, you’ll likely have to pay tax on the amount of forgiven debt that exceeds $600.

All that aside, the real problem with using debt settlement to get rid of debts occurs when you contract the help of a debt settlement company.

While there are some reputable ones out there, many of them charge exorbitant fees for their services and promise their clients more than they’re capable of delivering.

Unless you’re just extremely gun shy about talking to your creditors, you can settle debts on your own and keep more money in your pocket in the process.

Final Thoughts

With the exception of hitting the lottery or inheriting a windfall, finding a way to pay off debt usually isn’t a quick fix. If you’re contemplating any of these four options, it’s to your advantage to go back to the drawing board and see if you can’t find other ways to do it first.

Taking on a side hustle to bring in more money that you can put towards debt or transferring your balances to a 0% interest credit card, for example, are good places to start and they’re less likely to put you deeper in the red.

About the author

Rebecca Lake

Rebecca Lake is a personal finance writer and blogger specializing in topics related to mortgages, retirement and business credit. Her work has appeared in a variety of outlets around the web, including Smart Asset and Money Crashers. You can find her on Twitter at @seemomwrite or her website, RebeccaLake.net.

2 Comments

  • Many times there are no choices NOT to utilize the worst ways out of debt e.g. An older spouse who worked way past retirement (80) had’t built up a l-t retirement nest egg due to employment mostly caused by companies consolidation + divorce becomes severely ill requiring home care 2 yrs > death leaving other disabled spouse with medical costs
    + punishing tax change to single (25 %) + loss of 1 Social Security check & a mortgage What to do — all your worst scenarios unless family member leaves money to help. Really appalling simplistic advice here as one doesn’t plan @ 25 to be a widow (or) a widower (usually men get remarried faster, older women have more difficulty especially when encumbered w/debt)

    • Hey Nancy,
      Thanks for reading! We realize that not every piece of advice we give is going to work for every reader’s situation. Our only goal is to provide options some people may not think of. We want to wish you the best of luck to you and your situation, and we hope that you may have been able to find more suitable advice on some of our other articles, including this one about planning for retirement.

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