We live in an uncertain world. Loss of employment, a divorce, an accident, or illness can leave a person with bills that exceed income, and debts that are impossible to manage. This can be scary…but it doesn’t have to be. You can escape that anxiety and pressure by putting a good team of debt help lawyers to work for you. One option you have if you are living with any of these situations is debt settlement.
Our debt settlement methods don’t just focus on getting you out of debt. Instead, we seek to maximize your settlement leverage through enforcement of your consumer protection rights, rights that are often violated during collections and credit reporting. Laws such as the Fair Debt Collection Practices Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Telephone Consumer Protection Act, the Fair Credit Reporting Act and others are powerful forces when negotiating reduced settlements. Plus, violations of these laws can actually net you settlement dollars or offset your debt. And even if you don’t qualify for debt settlement, we may still be able to offer you no cost Fair Debt and Fair Credit services.
What exactly is debt settlement?
Debt settlement is a debt relief option in which your debts are negotiated down to a lower amount – sometimes less than 50% of the original debt. The reduced amount is typically paid off in a lump sum, or in some cases, in a series of payments. Creditors choose to settle debts as a matter of good business sense. They realize that, in a dire financial position, a consumer can file bankruptcy, in which case the creditor will typically receive nothing on the debt. In cases of hardship, creditors are generally willing to settle for less rather than take the risk of withstanding a total loss.
What happens during debt settlement?
Debt settlement involves negotiating with your creditors to convince them to reduce the amount you must pay. A monthly amount you can afford to pay towards your unsecured debts is calculated, and that amount is placed in a third party trust account that builds up each month. Once enough funds have been saved up, our debt help lawyers start working with your creditors on settling for less than you owe.
If you can show genuine hardship, many creditors are willing to settle for a far lower amount to resolve the obligation. Creditors realize that consumers who are under financial stress have the right to file bankruptcy; in which case the debt could be discharged, and they would receive nothing. When a debt is settled, you agree to pay a lower amount than the original balance, often in a lump sum.
Creditors are more likely to consider settling an account that has been delinquent for several months or has been purchased by a collection agency. The motive is to recoup as much of the amount owed as they can. Your motive is to get out from under the debt for a lower amount and stop creditor calls and legal attempts to collect. In many cases, the settlement amount, when negotiated by a skilled debt settlement lawyer, may be lower than the original debt — even 50% or less.
Creditors today often focus upon averting total loss, and creditors, consumers, and their lawyers work together to achieve a positive outcome. It is considered better to accept some portion of the money owed than the total loss if the consumer files for bankruptcy. During the negotiation process to settle a debt, you may be asked to lay all your financial cards on the table. Creditors may want proof of hardship to establish that you are unable to pay the full amount. Once it is proven that you are suffering real financial difficulty it is often simple to settle.
Should I use a debt settlement lawyer or a debt settlement company?
If you are in over your head with more monthly payments than your income can handle and want to settle the debt rather than file for bankruptcy, you may be wondering if you should work with an attorney or a debt settlement company. We believe that hiring a debt negotiation lawyer is a better option than a non-law firm debt settlement company.
Additionally, if a creditor violates the Fair Debt Collection Practices Act (FDCPA) or any other law designed to protect consumers, your lawyer can protect your rights and advise you of your legal options, which may include turnabout legal action against the creditor to be financially compensated for damages. A debt law attorney can provide you with legal services no debt settlement company is qualified to offer, and typically at a lower cost.
Last but not least, a talented debt negotiation attorney has the skills and experience to pursue the lowest settlement amount possible. At our firm, we take pride in negotiating settlements our clients can afford, and helping them get back on the road to a brighter financial future. And when you work with a debt law attorney at our firm, we can help you find the right strategy for your situation, including negotiating credit card debt settlements that are reasonable and affordable
Debt settlement companies can negotiate with creditors to settle your debts, but they cannot give you legal advice, defend you in court or recover you damages for violations of your rights. A skilled debt relief lawyer, on the other hand, will review your finances and advise you of the best debt relief strategy for your unique situation.
|Law Firms vs. Debt Settlement Companies||Law Firms||Debt Settlement Companies|
|We are attorneys|
|Talk directly to our attorneys about
|Licensed in house attorneys
|In house bankruptcy department|
|We sue debt collectors who violate your rights|
|We can make debt collectors stop contacting you|
|Court representation available by lawyers*|
|Court mediation presentation available by lawyers*|
|Creditors work with law firms|
|Financial analysis reviewed by attorneys|
|Negotiations reviewed by attorneys|
|Attorneys legally fight for lower settlements|
|Attorneys respond to legal demands from collectors|
|Member of state bar associations|
|Peace of mind|
|Only attorneys do legal work (debt settlement companies cannot)|
What are the pros and cons of debt settlement?
The most obvious advantage of debt settlement is that you will pay less than the amount you owe on the debt. This can make life easier, less stressful, and put you in a much better financial condition. Collection calls and letters will stop; you can get on with your life. In many cases, the amount paid in the settlement may be less than 50% of the amount of the original debt.
Debt settlement has a disadvantage, too – it impacts your credit standing and lowers your credit score. The credit card company, lender, or collector may report “settlement accepted” or “settled for less than agreed” to the credit reporting agencies, which will show on your credit report. However, many people in financial stress already have a damaged credit score, which is not helped by making monthly minimum payments.
Can debt settlement help credit card debt?
Credit cards are necessary, but have their dangers. Unless you pay the balance in full every month, you will end up paying far more than the original price of what you purchased. It is also far too easy to let balances to get out of control to the point where you can no longer afford to pay the minimum monthly payments. The situation becomes grim indeed when you start missing payments, and the collection calls begin.
One option is to settle your debts with the credit card companies. At our firm, our debt settlement attorneys can advise you of the debt relief option that is in your best interests. In settling credit card debt, we will negotiate with the credit card company and pursue the lowest settlement possible, typically far lower than a consumer could arrange when working directly with a creditor.
As a debt relief option, credit card debt settlement has several benefits for consumers:
- You pay a reduced amount – in some cases, 50% or even less of the original balance.
- The debt is paid off faster, often in one lump sum, so interest does not continue to accrue.
- Debt settlement is less harmful to your credit standing than filing bankruptcy.
- No more monthly bills you can’t pay, with late charges and interest piling up.
- No more collection calls and letters.
How can I start getting out of debt today?
If you are faced by overwhelming debt, the most important thing to do is take action. Ignoring the situation will only result in higher late fees and interest rates, increasing your overall debt. Your most immediate solution may be debt settlement, and with the help of professionals with years of experience in the debt and credit industry, you can start paying off your debt with a realistic plan that you can handle. If you choose to do it yourself, remember to remain calm and focused. It is imperative that you learn about your rights. This website offers a number of informative articles that can help you. Also, the Federal Trade Commission distributes informational brochures for consumers. And remember to keep records of every communication you have with the creditors for later reference.