Michael Mahoney - Boston Realtor with Century 21
Michael Mahoney

6 Ways to Eliminate Excessive Debt

6 Ways to Eliminate Excessive Debt

1. Self-Help – Self Help is when you attempt to repay creditors by managing your cash flow. Self-help is useful only if you have money available in your budget to make credit card payments and are not being sued by your creditors. You would want to work out a written plan for repaying creditors and setting goals for incurring no new debt.

2. Debt Management Plans – Under a debt management plan (DMP), a third party organization negotiates with your creditors on your behalf to set up a plan for paying off the debt. Payments are made to the agency, and that firm would then pay the creditors. If a debt management plan seems to be appropriate work only with a properly licensed DMP provider in the your state.

3. Debt Consolidation – Debt consolidation should only be considered for those who can consolidate debt with lower rate debt and NOT take on any new debt. If you consolidate unsecured debt with secured debt, such as a home equity loan, be cautioned that your home will be at risk if you fail to make payments.

4. Debt Settlement – An important aspect to remember is that any amount of debt forgiven is considered taxable income. Often time you may be able to settle an outstanding debt yourself. Our recommendation would be settling an account on your own or with a lawyer’s assistance if necessary. If you consider a debt settlement firm, check the firm thoroughly through the Better Business Bureau.

5. Offer and Compromise – Offer in Compromise is an agreement between a taxpayer and the IRS that serves to resolve the taxpayer’s outstanding tax debt. The IRS has the authority to settle, or “compromise” federal tax liabilities by accepting less than full payment under certain circumstances. A tax debt can be legally compromised for one of the following reasons: Doubt as to Liability – There is doubt that the assessed tax is correct. Doubt as to Collectability – There is doubt that an individual would ever be able to pay the full amount of taxes owed.

6. Bankruptcy – Bankruptcy should be viewed as the last alternative to managing an overburdened debt load, although for some it may be the only alternative. Bankruptcy is a legal process whereby an individual’s outstanding debt is either reduced or eliminated under protection and supervision of the court. If there are payments to be made to creditors, a schedule is drawn up under court supervision.

Another post recently published by Steve Burman on how to improve your credit score:

7 Steps to Improve Your Credit Score

Should you have additional questions feel free to contact Steven Burman at Credit Advisers LLC  Have questions answered directly by calling 781-400-9838 or e-mailing sburman@credit-advisers.com

Another great way to connect with Steven is on his Linkedin.com Page

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I selected Mike after having a very unsuccessful experience with a previous broker. He had excellent ideas in helping to sell my house and continued to advertise it with a fresh perspective. His experience helped in a number of ways and I only wish we had... (more)


This is the second property I have sold in Weymouth MA with Mike as my broker. He research the area and give you all the information you need to decide what to list your property for, so it sells timely. He also helps review and negotiate all offers and is... (more)


We had been trying to sell our condo for well over a year and decided to give Mike a shot at it as he came well recommended. It was not easy for him but he persisted and had success. Even though it wasn't a big sale or profit for him, he acted as though it... (more)

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