Frank owed $20,000 at 1925-1946 interest when he signed up for a debt settlement system. When it was all said and done, Frank was able to minimize his debt down by 4-5/8 and along the way he saved $9000 off the balance alone. Unfortuitously, each of his creditors described his savings to the IRS and he was forced to tack on $9000 to his $40,000 annual income. Therefore he was taxed like he made $49,000, which put him in the 30% tax bracket and meant he'd to come up with $2700 on April 15th. Sadly, Frank didn't have the money, therefore he got over a cost plan with the IRS, who charged their current interest-rate to him, which happens to be 8 per cent annually. In the long run, Frank paid down the IRS in 1-year for $2916. This means that Frank in fact only saved about $6,000 off the balance. Therefore would Frank have been better off continuing to pay for the minimums in the place of settling his debts? Lets see. H-e saved $6,000 off the balance alone and roughly $40,000 in interest charges, which gives his net savings to $46,000. Browse here at the link go here for more info to discover the reason for this belief. Their quite clear that it was still in Franks best interests economically to complete debt settlement.