Find how attorneys can provide debt settlement services.
If you need a professional to assist you, then you should consider a debt settlement attorney. They specialize in negotiating with your creditors to lower and possibly eliminate the amount of debt that you need to pay your creditors. cost for this service may depend on the amount of money that the lawyer saves, or they may charge a one time fee. An attorney will tend to focus on unsecured debts like credit cards, department store cards, and medical bills.
How does an debt settlement attorney differ from a credit counselor?
Credit counseling agencies and debt settlement attorneys offer very different services. The tactics, skill sets and experience levels between the two are also very different. The debt settlement process is a much more aggressive approach than credit counseling, and if it is successful it can get you out of debt in possibly less than half the time of credit counseling. Lawyers will tend to bring a different, more aggressive skill-set in the assistance they provide.
While it can be risky and possibly impact your credit ratings in the short term, over the long term the risk to your scores is lowered. In addition, if your credit is already poor and if you may be considering a drastic measure such as a bankruptcy filing, then you have little to lose by trying to settle your debt. When someone decides to go down that path and try this approach, this is when using an attorney can be most beneficial.
The best time to use an attorney to help settle your debts is when you are faced a bankruptcy filing. Or an individual should consider this even if you are just thinking about bankruptcy. Another time to consider using a legal approach is when the creditor is infringing on your rights, as some will use very aggressive collection tactics. If your financial situation is at the point where bankruptcy is on your personal radar screen, then use the services of an attorney. They can advise you on your legal rights, help you eliminate your debt and get you back on your feet.
What to look for in an attorney?
As with anyone you ever do business with, you need to review the references of debt settlement lawyers before using their services. It is riskier to use someone new to the industry, and you should strongly consider using someone who has handled other cases successfully. Be sure to ask for specific examples of how much and what percent they have saved people, and get details and references. Ask them what percent of their cases are successful, and what percent are not.
Verify this information. You should always contact the Better Business Bureau for any complaints that may have been filed against the business or firm. It should be your mission to hire an attorney who is legit and successful in financial issues and dealing with various creditors.
How will debt settlement attorneys assist
Debt negotiation attorneys specialize in negotiating with various creditors. They can enter into deals with credit card companies, hospitals, medical providers, and others. They know how to reduce the amount of debt you have to your name and can make the monthly payments more manageable.
Sometimes the attorney has a background in the bankruptcy process, and they may guide you in that direction after reviewing your case. In other cases the lawyer that you use from a debt settlement company will be more proficient in negotiating with creditors to reduce the amount of the money you will need to pay for a lump sum settlement. They will try to arbitrate a solution. Ask them what they specialize or focus on. Some will even provide debt arbitration programs.
After you enter into a contract with them, the lawyers will proceed with contacting every one of the creditors you currently have. They will also contact any debt collection agencies that are involved in your case in order to waive the late fees, penalties, and other expenses accruing on your accounts. It there is an bill that is due that they can help with, every effort will be made to do so.
The debt negotiation attorney will come to terms with your creditors so that the collection agencies and credit card companies will contact the attorney instead of the consumer. This simplifies future communication from the creditors. It also helps reduce the likelihood of aggressive collection practices.
Another service they provide is reviewing your credit report. If there is anything that is incorrect, they will work to have it removed or fixed. These experienced professionals know what to look for and can ensure that the consumer is being treated fairly. If need be, a lawyer will also use legal action against the reporting agencies in an effort to fix the issues. They will also try to improve your credit scores.
Always keep in mind your credit ratings. If you are going to settle with your creditors, be sure to have the debt settlement attorney negotiate removal of the deal made from your report to minimize the impact to your credit scores. When the agreement is not memorialized, this will help ensure the client is able to borrow money from a bank or lender in the future.
Credit repair is a very important service that attorneys can provide. It should never be overlooked. This process should be used by the customer to restore and improve their credit ratings. The settlement company can also help you with creating a budget and plan for future financial management to ensure you do not get into financial problems in the future.
Almost all creditors prefer negotiation, mediation, and debt settlements to the risk of bankruptcy. The reason being if you file for bankruptcy the lender will usually not receive any money from you. So they would rather get some money versus none. Lawyers are well versed in this and use this knowledge to their advantage.
Some creditors will even agree to report settlements as "paid as agreed" on the consumer's credit record to encourage people to work with them. Who better to represent you and negotiate with a bank or credit card company then an experienced attorney.
How much of my debt can they reduce? How much will they charge me?
It will vary. Many debt settlement lawyers will try to eliminate anywhere from 50 to 65% of what you owe. The fees they will charge you for their services are often based on the amount of savings they achieve for you. For example, they may charge you 25% of whatever they save you. This lowers the total costs to the consumer and reduces the risk of using a lawyer. There are even ways to get free consultations for filing bankruptcy.
Some attorneys may even enter into a contract with you in which if they do not reduce your debt by an agreed upon percent, or if they do not save you a certain percentage of money, then they will not charge you anything. So for example, when your debt is not reduced by at least 30% a debt settlement lawyer may not charge you anything for their services. This means the help they provide in reducing debts will be free to the client. So they in effect guarantee some level of success.
The attorney tends to either negotiate a lump-sum settlement, a payment plan, or maybe a combination of the two. If a lump sum payment is not possible, then the client can pay their creditors monthly amounts over a timeframe ranging from 9 to 24 months. In this case the fee charged by the debt settlement lawyer or company will be added to the owed amount and part of the monthly payment.
Can a debt settlement attorney provide mediation services?
Yes. As part of the debt mediation process the consumer will need to provide the lawyer / mediator with a limited power of attorney. When this is done, they will then use this authority to work out and negotiate lump sum settlements on specified debts, such as credit cards and medical bills, at reduced amounts. In almost all cases the consumer will need to stop using their credit card and will also need to pay the mediator an agreed amount monthly to pay for the settlement.
Debt mediation is another options available. Many lawyers as well as specialists use this approach to tackle the amount of debt that you owe to your creditors. It will also help reduce the amount of interest, fees, and penalties that you are responsible for. While the exact terms of any deal will depend on what is best for both the creditor and the companies you owe money to, in general mediation can lower the total amount of debt you owe by as much as much as 40%.