3 unexpected downsides of debt relief to know before enrolling
Debt relief programs can offer significant benefits, but they also come with unexpected downsides. Borrowers may experience a temporary drop in their credit scores due to missed payments during the settlement process. Additionally, forgiven debt may be considered taxable income, leading to potential tax liabilities that borrowers should be aware of.
- ▪Debt relief can initially lower your credit score due to missed payments.
- ▪Forgiven debt may be treated as taxable income by the IRS.
- ▪The timeline for debt relief can be longer and less predictable than advertised.
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MoneyWatch: Managing Your Money 3 unexpected downsides of debt relief to know before enrolling We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. .chip { background-image: url('/fly/bundles/cbsnewscore/images/chip-bgd/chip-bgd-moneywatch.jpg'); } By Angelica Leicht Angelica Leicht Senior Editor, Managing Your Money Angelica Leicht is the senior editor for the Managing Your Money section for CBSNews.com, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.
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