Many business owners believe that debt forgiveness is something to avoid at all costs, but this assumption is incorrect. While accumulating large amounts of debt is something to avoid in the first place, once you’re in debt, you have to come up with a plan to deal with it.
If you’re falling behind with your payments or thinking about filing for bankruptcy, consider debt forgiveness first. Debt forgiveness isn’t the answer for everybody, but it may provide the assistance you need to secure a solid financial future for yourself and your business. Learn about the following three ways debt forgiveness can sometimes be a wise business decision.
Reduce Your Monthly Payment
If you owe several creditors money, the most obvious benefit of debt forgiveness is that it reduces the amount you owe to a single, affordable monthly payment. After the settlement is negotiated and accepted, you may end up paying much less than the original amount owed.
While no guarantees are present, it’s not unusual to end up paying 25 to 50% less than what you would have paid without debt forgiveness. You can use this money to regain your financial footing and invest back in your business.
Help You Manage Back Taxes Owed
If you owe back taxes, you may qualify for IRS debt forgiveness. While not everyone meets the criteria for forgiveness, those who do can reduce the amount they owe. To see if you qualify, get professional help and submit all required tax forms to the IRS. The IRS may also require an initial payment on the taxes you owe. If debt settlement is approved for you, this initial payment is applied to your balance.
If approved, the IRS will either require you to make one lump sum payment or allow you to set up a long-term repayment plan. This approach can allow you to focus on growing your business and increasing your income, which can help you pay off your debt faster.
Provide Stress Relief
If you owe a significant amount of money, debt forgiveness can provide relief that extends far beyond the financial assistance it provides. You may find that debt forgiveness can reduce the amount of stress you’re experiencing since out-of-control debt can weigh on you emotionally and can trigger anxiety and depression.
Getting your debt under control, which debt forgiveness helps you do, can alleviate some of the stress that debt causes. You may find that a reduction in the amount you owe can lift some of the pressures you’re facing. When you have an actionable, achievable debt settlement plan to follow, you may find your stress levels decrease even more. The more in control of your finances you are, the more secure you can start to feel.
Debt forgiveness often has a negative connotation, but it’s not always deserved. While many people agree that it’s best to avoid debt in the first place, once you have it, you must figure out how to deal with it. If you find yourself in a situation where you’ve amassed more debt than you can handle, look into debt forgiveness. It can reduce the amount of money you owe, help with stress, and provide relief from worry for you.