Significant debt sometimes accumulates gradually over time, but it can also happen all at once. You may have a medical emergency or have to purchase a new furnace in an expedient manner, and you are suddenly saddled with thousands of dollars in debt for reasons beyond your control.
Bankruptcy may be one solution for dealing with your intractable debt. While not the ruination that many people believe it to be, bankruptcy is complicated, expensive, and has long-term credit implications. You may have other options available to you, one of which is debt settlement.
What Is Debt Settlement?
Debt settlement involves negotiating with your creditors to pay a portion of what you already owe them. This allows your creditors to recoup at least some of their losses while allowing you to pay less than you owe.
What Are Your Debt Settlement Options?
When seeking a debt settlement, you essentially have three options:
- Negotiate with your creditors yourself
- Hire an attorney to handle the negotiations for you
- Work with a debt settlement company
Debt settlement companies are for-profit organizations. They often make promises that they cannot deliver on. For example, they may ask you to make payments to the company to handle expenses related to negotiating with your creditors. However, even if they make a good-faith effort to negotiate on your behalf, and not all of them do, many creditors are already wary of debt settlement companies and refuse to negotiate with them.
What Are the Benefits of Hiring a Debt Settlement Attorney?
An attorney will go over all your options with you and advise you on which is most appropriate for your situation. If you would benefit more by filing for bankruptcy than by settling your debt, an attorney can explain why and give you practical advice on how to proceed.
A debt settlement attorney has experience in negotiating with creditors as well as credibility and ethos that debt settlement companies lack. He or she may be able to negotiate a more favorable settlement than you could achieve on your own.
An attorney, like a bankruptcy lawyer, can represent your interests in court if a creditor oversteps the bounds of the law in trying to collect from you or decides to file a lawsuit against you in an effort to compel you to pay what you owe.
Since debt settlement companies sometimes masquerade as law firms or hire lawyers as a front, it is crucial that you seek out and work with a reputable debt settlement attorney. Contact a law office to learn more about our credentials.