Debt Settlement Savings Calculator

ANA›Life Services Authority›National Calculator Authority›Debt Settlement Savings Calculator

.calc-container { max-width: 640px; margin: 2rem 0; padding: 1.5rem; background: #fff; border: 1px solid #ddd; border-radius: 8px; box-shadow: 0 1px 3px rgba(0,0,0,0.06); font-family: system-ui, -apple-system, sans-serif; } .calc-container h3 { font-family: Georgia, serif; font-size: 1.15rem; color: #1a1a1a; margin-bottom: 1rem; padding-bottom: 0.5rem; border-bottom: 2px solid var(--ac, #3d5a80); } .calc-row { display: flex; align-items: center; gap: 0.75rem; margin-bottom: 0.75rem; flex-wrap: wrap; } .calc-row label { min-width: 160px; font-size: 0.9rem; color: #333; font-weight: 500; } .calc-row input[type="number"], .calc-row select { flex: 1; min-width: 120px; max-width: 200px; padding: 0.5rem 0.6rem; border: 1px solid #ccc; border-radius: 4px; font-size: 0.9rem; font-family: system-ui, sans-serif; color: #1a1a1a; background: #fafaf8; } .calc-row input:focus, .calc-row select:focus { outline: none; border-color: var(--ac, #3d5a80); box-shadow: 0 0 0 2px rgba(26,74,138,0.12); } .calc-row .unit { font-size: 0.82rem; color: #888; min-width: 30px; } .calc-btn { display: inline-block; margin-top: 0.5rem; padding: 0.55rem 1.5rem; background: var(--ac, #3d5a80); color: #fff; border: none; border-radius: 4px; font-size: 0.9rem; font-weight: 600; cursor: pointer; font-family: system-ui, sans-serif; } .calc-btn:hover { opacity: 0.9; } .calc-result { margin-top: 1.25rem; padding: 1rem 1.25rem; background: #f0f6fc; border-left: 3px solid var(--ac, #3d5a80); border-radius: 0 6px 6px 0; display: none; } .calc-result.visible { display: block; } .calc-result-label { font-size: 0.78rem; text-transform: uppercase; letter-spacing: 0.06em; color: #666; margin-bottom: 0.25rem; } .calc-result-value { font-size: 1.6rem; font-weight: 700; color: var(--ac, #3d5a80); } .calc-result-detail { font-size: 0.85rem; color: #555; margin-top: 0.5rem; line-height: 1.5; } .calc-note { margin-top: 1rem; font-size: 0.8rem; color: #888; font-style: italic; } .calc-grid { display: grid; grid-template-columns: 1fr 1fr; gap: 0.75rem; margin-top: 0.75rem; } .calc-grid-item { padding: 0.6rem 0.8rem; background: #f8f9fa; border-radius: 4px; border: 1px solid #eee; } .calc-grid-item .label { font-size: 0.75rem; color: #888; text-transform: uppercase; letter-spacing: 0.04em; } .calc-grid-item .value { font-size: 1.1rem; font-weight: 600; color: #1a1a1a; } @media (max-width: 720px) { .calc-row { flex-direction: column; align-items: flex-start; gap: 0.3rem; } .calc-row label { min-width: auto; } .calc-row input[type="number"], .calc-row select { max-width: 100%; width: 100%; } .calc-grid { grid-template-columns: 1fr; } } .calc-chart { margin: 1rem 0; text-align: center; } .calc-chart svg { max-width: 100%; height: auto; } .calc-chart-legend { display: flex; flex-wrap: wrap; justify-content: center; gap: 0.6rem 1.2rem; margin-top: 0.6rem; font-size: 0.8rem; color: #555; } .calc-chart-legend span { display: inline-flex; align-items: center; gap: 0.3rem; } .calc-chart-legend i { display: inline-block; width: 10px; height: 10px; border-radius: 2px; font-style: normal; } .calc-related { max-width: 640px; margin: 2rem 0 1rem; padding: 1.25rem 1.5rem; background: #f8f9fa; border: 1px solid #e8e8e8; border-radius: 8px; } .calc-related h3 { font-family: Georgia, serif; font-size: 1rem; color: #1a1a1a; margin: 0 0 0.75rem; padding-bottom: 0.4rem; border-bottom: 2px solid var(--ac, #3d5a80); } .calc-related-list { list-style: none; padding: 0; margin: 0 0 0.75rem; display: grid; grid-template-columns: 1fr 1fr; gap: 0.4rem 1.5rem; } .calc-related-list li a { font-size: 0.88rem; color: var(--ac, #3d5a80); text-decoration: none; } .calc-related-list li a:hover { text-decoration: underline; } .calc-browse-all { margin: 0.5rem 0 0; font-size: 0.9rem; font-weight: 600; } .calc-browse-all a { color: var(--ac, #3d5a80); text-decoration: none; } .calc-browse-all a:hover { text-decoration: underline; } @media (max-width: 720px) { .calc-related-list { grid-template-columns: 1fr; } }

Debt Settlement Savings Calculator

Estimate how much you could save by negotiating a debt settlement, and understand the true cost including potential tax liability on forgiven debt.

Total Debt Owed ($)

Settlement Offer (% of total debt)

Typical settlements range from 40%–60% of the original balance.

Settlement Company Fee (% of enrolled debt, 0 if DIY)

Professional debt settlement companies typically charge 15%–25% of enrolled debt.

Your Marginal Tax Rate (%)

Forgiven debt over $600 is generally taxable income (IRS Form 1099-C). Enter 0 if insolvent.

Current Monthly Minimum Payment ($)

Current Annual Interest Rate (%)

Calculate Savings

function debCalc() { var resultDiv = document.getElementById('deb-result');

var totalDebt = parseFloat(document.getElementById('deb-total-debt').value); var settlementPct = parseFloat(document.getElementById('deb-settlement-pct').value); var feesPct = parseFloat(document.getElementById('deb-fees-pct').value); var taxRate = parseFloat(document.getElementById('deb-tax-rate').value); var monthlyPay = parseFloat(document.getElementById('deb-monthly-payment').value); var annualRate = parseFloat(document.getElementById('deb-interest-rate').value);

// Validation if (isNaN(totalDebt) || totalDebt = 100) { resultDiv.innerHTML = 'Settlement offer must be between 1% and 99%.

'; return; } if (isNaN(feesPct) || feesPct 50) { resultDiv.innerHTML = 'Settlement fee must be between 0% and 50%.

'; return; } if (isNaN(taxRate) || taxRate 60) { resultDiv.innerHTML = 'Tax rate must be between 0% and 60%.

'; return; } if (isNaN(monthlyPay) || monthlyPay 100) { resultDiv.innerHTML = 'Please enter a valid annual interest rate.

'; return; }

// ── Core Calculations ──────────────────────────────────────────────────────

// 1. Settlement amount var settlementAmount = totalDebt * (settlementPct / 100);

// 2. Forgiven (cancelled) debt var forgivenDebt = totalDebt - settlementAmount;

// 3. Settlement company fee (applied to total enrolled debt) var settlementFee = totalDebt * (feesPct / 100);

// 4. Tax liability on forgiven debt // Taxable forgiven debt = forgivenDebt (IRS treats cancelled debt as income) var taxLiability = forgivenDebt * (taxRate / 100);

// 5. Total out-of-pocket cost of settlement var totalSettlementCost = settlementAmount + settlementFee + taxLiability;

// 6. Net savings vs. paying full balance var netSavings = totalDebt - totalSettlementCost; var netSavingsPct = (netSavings / totalDebt) * 100;

// 7. Time to pay off debt at current minimum payment (if applicable) // Using standard amortization: n = -ln(1 - (r*P)/M) / ln(1+r) // where r = monthly rate, P = principal, M = monthly payment var monthsToPayoff = null; var totalPaidFullDebt = null; var interestPaidFullDebt = null;

if (monthlyPay > 0 && annualRate > 0) { var monthlyRate = annualRate / 100 / 12; var minPaymentNeeded = totalDebt * monthlyRate; // interest-only threshold if (monthlyPay 0 && annualRate === 0) { monthsToPayoff = totalDebt / monthlyPay; totalPaidFullDebt = totalDebt; interestPaidFullDebt = 0; }

// 8. Total savings including interest avoided (vs. paying full debt over time)
var totalSavingsWithInterest = (totalPaidFullDebt && isFinite(totalPaidFullDebt))
? totalPaidFullDebt - totalSettlementCost
null;

// ── Format helpers ───────────────────────────────────────────────────────── function fmt(n) { if (!isFinite(n)) return 'N/A'; return '$' + n.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ','); } function fmtPct(n) { return n.toFixed(1) + '%'; } function fmtMonths(m) { if (!isFinite(m)) return 'Never (payment too low)'; var yrs = Math.floor(m / 12); var mos = Math.round(m % 12); return (yrs > 0 ? yrs + ' yr ' : '') + mos + ' mo'; }

// ── Build result HTML ────────────────────────────────────────────────────── var savingsClass = netSavings > 0 ? 'color:#1a7a4a;font-weight:bold;' : 'color:#c0392b;font-weight:bold;';

var payoffRow = ''; if (monthsToPayoff !== null) { payoffRow = 'Time to Pay Off (min. payments)' + fmtMonths(monthsToPayoff) + '' + 'Total Paid (full debt + interest)' + fmt(totalPaidFullDebt) + '' + 'Interest Paid (full payoff)' + fmt(interestPaidFullDebt) + ''; if (totalSavingsWithInterest !== null) { payoffRow += 'Total Savings incl. Interest Avoided' + '' + fmt(totalSavingsWithInterest) + ''; } }

resultDiv.innerHTML = '### Settlement Summary ' + '' + 'ItemAmount' + 'Total Debt Owed' + fmt(totalDebt) + '' + 'Settlement Amount (' + fmtPct(settlementPct) + ')' + fmt(settlementAmount) + '' + 'Forgiven / Cancelled Debt' + fmt(forgivenDebt) + '' + 'Settlement Company Fee (' + fmtPct(feesPct) + ')' + fmt(settlementFee) + '' + 'Estimated Tax on Forgiven Debt (' + fmtPct(taxRate) + ')' + fmt(taxLiability) + '' + 'Total Out-of-Pocket Cost' + fmt(totalSettlementCost) + '' + 'Net Savings vs. Full Balance' + '' + fmt(netSavings) + ' (' + fmtPct(netSavingsPct) + ')' + payoffRow + '' + (netSavings 0 ? '💡 If you are insolvent (liabilities exceed assets), you may exclude forgiven debt from income under IRS Publication 4681. Consult a tax professional.

' : ''); }

#### Formulas Used

Settlement Amount = Total Debt × (Settlement % ÷ 100)

Forgiven Debt = Total Debt − Settlement Amount

Settlement Fee = Total Debt × (Fee % ÷ 100)

Tax Liability = Forgiven Debt × (Tax Rate % ÷ 100)

Total Out-of-Pocket Cost = Settlement Amount + Settlement Fee + Tax Liability

Net Savings = Total Debt − Total Out-of-Pocket Cost

Months to Pay Off (amortization) = −ln(1 − (r × P) ÷ M) ÷ ln(1 + r)  |  r = annual rate ÷ 12, P = principal, M = monthly payment

Total Interest (full payoff) = (Monthly Payment × Months) − Principal

#### Assumptions & References

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References

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