Which Debts Do Not Qualify For Debt Settlement?

Consumers who are considering debt settlement as a form of debt elimination have a lot to consider before committing to the process. There is plenty of information floating around various media outlets either warning people of the dangers associated with debt settlement or the many reasons you should enroll in a program. This conflicting image of the process can leave many people confused as to whether or not debt settlement can help their specific situation.

To better understand if you are a candidate for debt settlement you must first learn as much as possible about this method of debt elimination. The truth of the matter is this; the process can work for qualified individuals however there are no guarantees and there are certain risks you take when using this process to get out of debt. Only those who face a legitimate financial hardship which makes the negative consequences outweigh the potential benefits should consider this process. Before doing so, you must understand that not all debts can be settled through debt negotiations.

The following debts cannot be negotiated through standard debt settlement programs:

• Secured debts- Any debt that is secured such as a mortgage loan or vehicle note cannot be included in the debt settlement process. You can however contact your lender to see if they are willing to work with you to get back on track. Certain lenders offer hardship programs which are designed to help borrowers keep their property and fulfill their loan obligations.

• Student loans- Most student loans will not qualify for standard debt settlement programs. Similar to secured debts you would have to contact your lender to see if you can work out an agreement with them outside of the regular debt settlement process.

• Taxes-The IRS is not going to negotiate with a debt settlement company working on your behalf. With that being said it is sometimes possible to work out an arrangement with the IRS but do not consider this a debt that can be included when considering debt settlement to eliminate your debts.

• Child support and alimony- Child support and alimony are debts that you will have to pay at some point regardless of your financial situation. Debt settlement companies will not include these debts as part of your program.

Knowing what debts qualify can help you make that difficult decision whether debt settlement is right for your situation. This legal process of reducing or eliminating debt is generally reserved for credit card and other unsecured debts. Other debts such as those you see here will have to be handled individually and separately from the rest of your debts.  In order to move forward to a life of financial freedom it is imperative you work out a plan to pay or otherwise take care of all unpaid debt.  Otherwise you will never truly know what it is like to find financial security.