Is a debt settlement legally binding?

Yes, a signed settlement agreement is legally binding.

Does debt settlement affect my credit?

Yes, settled accounts are typically reported as settled for less than full amount.

Can I negotiate debt settlement myself?

Yes. Creditors often accept 40-60% of the original debt. Document everything in writing.

What if the creditor does not honor the agreement?

The signed agreement is enforceable in court.

Do I owe tax on forgiven debt?

Possibly. The IRS may consider forgiven debt as taxable income. Consult a tax advisor.

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