Thank you for the support. I wish I could save my credit, but at this point I am in to deep so it is what it is. I will still be young enough to re-build it.

Don't worry too much about your credit. Once you get working towards paying this stuff off, your credit will come back fast.

I am only 6 months into my repayments and I am beginning again to get credit card offers in the mail on a daily basis again. Before, all I would get is ads for debt settlement companies. I even get offers from the banks I settled with so they must want my money again.

Trust me, it will get better. Besides with your credit the way it is it is harder to get a loan - that may be a blessing for you right now because the last thing you need is more debt - right?

keep us posted.

__________________
"If you have knowledge, let others light their candles in it."
— Margaret Fuller

Nobody can make you feel inferior without your permission.
-Eleanor Roosevelt

Any words of wisdom for those who have gone through the process? I'm only into week one, kinda scared of getting calls from the creditors. The debt settlement company told me to get them off the phone as quickly as I can so it will go into a collections company....

Thank you very much. I have reviewed the contract and everything I need to, I am steaming forward. The first 2 months because it includes the down payment is $200.00 a month higher, but after that I get a break of almost $900.00 per month. With the way the economy is, this is the break I needed. I really appreciate everyone posts, this is a very trying time for me and my wife. When times are good, you never think they will take a turn, I am making $2000.00 a month less with the horrible economy we are in, so it has to be done. Part of me feels stupid, part of me feels I failed, I always was quick to pay bills, but just cannot take the pressure anymore or make ends meat. Word of advice, if you have a CHASE CARD burn it, I am at 26% interest from being 2 days late, I have kicked and screamed and they refuse to help me, so now they can deal with my debit settlement company.

One of my Chase cards was at 30% and even after on time payments for two or three years, they still would not reduce the rate.

Good luck with your debt settlement plan, TJ!

I'm considering a debt settlement plan but I read about being sued or paying taxes on the settled credit card debts since they are considered an income.
Any comments on this unforseen situation.

There is always the risk of being sued, but many people successfully settle their debts without any lawsuits. There really is no way to be certain either way.

And, yes, you do receive a 1099 form for the amount of the forgiven debt, and it is considered taxable income. However, if you are insolvent at the time, then my understanding is that you do not have to pay taxes on it. I'm sure that the IRS has some kind of form that you would have to fill out to show that you were insolvent.

Please help me understand what you mean by "at the time"
is that the end of the contract or at the beginning of the contract when you get the 1099.
In case you have to pay how much do you have to pay?

Thank you so much for your response alias 1958.

According to the IRS, it's if you were insolvent immediately before the cancellation of the debt. You can look at Publication 4681 at irs.gov (the insolvency part starts on page 4).

If you do have to pay, the amount of canceled debt would be included in your income and would be taxable at whatever rate you fall under based on your total taxable income.

Thank you alias1958.
I will be going for a short holiday in Saugatuck Mi and I will try to forget this "debt settlement " web.
Hopefully when I come back my mind will be clear and will be able to make up my mind. Debt settlement is such a new concept that you don't hear much about and who wants to talk about their huge debts anyway.

But I need to do something before I exhaust my retirement fund besides paying for a huge penalty tax and fees for hardship withdrawal.

Thank you alias1958.
I will be going for a short holiday in Saugatuck Mi and I will try to forget this "debt settlement " web.
Hopefully when I come back my mind will be clear and will be able to make up my mind. Debt settlement is such a new concept that you don't hear much about and who wants to talk about their huge debts anyway.

But I need to do something before I exhaust my retirement fund besides paying for a huge penalty tax and fees for hardship withdrawal.

You're welcome, scared. Have a fun vacation, and try not to worry too much!!

By the way, most people recommend not touching your retirement to pay unsecured creditors.

I know, it was not a wise decision but I don't want to be behind on my credit card payments.
I have taken two hardship withrawals the past two years and I'am close to exhausting what I'am allowed to withdraw.
I will take your advice.

Goodnight alias1958.

Financial Independence & Resource Education is not liscensed to to credit repair and if they were members of a regulatory organization like TASC or USOBA they would know that to provide that service with debt settlement is a conflict of interest. To do credit repair you must be liscensed and bonded in 48 states and they only have a county liscense. Public please be aware of laws and do not let people take your money. They do have a B- rating but the simple fact is they are not operating correctly and you will be the one who suffers in the end. If they do not even know what liscensing they need what else do they not know?

Regulator any more dirt on them, I am starting to have some issues with them already.

anymore issues with them? I had someone contact me today from FIRE...