There are exceptions to having to count the forgiven debt as income, for individuals who are insolvent at the time of the settlement. Insolvent means you owed more than the fair market value of your assets. As an increasing number of Credit Card Debt companies are agreeing to settle cardholder debts, it’s important that individuals recognize that there may be minor tax consequences associated with the settlement. A debt settlement is when the creditor allows the account holder to pay less than what is owed and consider the account paid in full. One of the many things those enticing ads don’t point out is that debt settlement can only occur after the accounts are charged off. And if you do choose the settlement option, it will actually prolong the time the charge-off remains on your credit report. There is this cliche that states that in generally speaking, if you or someone that understands and has expert knowledge fail to plan you plan to fail. The first thing you ought to do is evaluate where you want to be. Do you want freedom from your credit card burden? Is so, you have to develop a different action plan to the one and its most important to understand if you are currently following. Start by listing all of the debt you currently owe along with a list of what your monthly obligations are for each debt. Knowledge can give you a real advantage. Don’t try to pay off all of your credit cards at once. Doing this will take too long and end up discouraging you. You’re better off concentrating on getting one card paid off, then putting the money you’ve freed up from that one card and applying it to the next one and so forth.