If you’re struggling with debt, you’re not alone.
The U.S. is experiencing an all-time debt high of nearly 15 trillion dollars. Approximately 80% of Americans carry around some form of financial debt. Almost 200 million of us have credit cards. The debt crisis affects all ages, races, and demographics, but there is hope.
Unfortunate circumstances, such as an unexpected medical crisis, job instability, or unforeseeable events, can lead to financial hardship for anyone. Meeting essential expenses like housing and food becomes daunting when confronted with such challenges, let alone managing ongoing financial responsibilities such as credit card debt and student loans.
So, how can you navigate this difficult situation? Debt settlement is a viable option. A debt settlement attorney can help turn your situation around.
What Is Debt Settlement, and How Does it Work?
Debt settlement is a financial strategy to resolve unmanageable debt by negotiating with creditors to accept a reduced payment as a settlement for the total amount owed. It typically involves working with a debt settlement company or, in some cases, an attorney with experience in debt negotiation.
Here’s how the debt settlement process typically works:
- Financial Assessment: Individuals facing financial hardship, often due to high levels of debt and difficulty making payments, seek the assistance of a debt settlement company or attorney.
- Savings Account: Clients must deposit a specific amount of money into a dedicated savings account each month to fund the settlements. This account accumulates funds to make settlement offers to creditors.
- Negotiation: The debt settlement company or attorney contacts the creditors on behalf of the client to negotiate a settlement. They aim to persuade the creditors to accept a lump-sum payment typically lower than the total outstanding debt.
- Offers: Once an agreement is reached with a creditor, the client is informed and can decide whether to accept the settlement offer. If accepted, the funds from the savings account are used to pay the agreed-upon amount to the creditor.
- Debt Resolution: As settlements are reached and paid, the individual’s debt balances are reduced, and they move closer to becoming debt-free.
- Impact on Credit: Debt settlement can hurt a person’s credit score, as it involves not paying the total amount owed. This negative impact may last for several years.
Debt settlement is typically considered an option for those struggling to meet their debt obligations, have a significant amount of unsecured debt (such as credit card debt), and face financial hardship.
Consulting with a financial advisor or attorney is advisable to understand the potential consequences and alternatives available before pursuing debt settlement.
What Kinds of Debt Can I Settle?
Common types of unsecured debts that you can settle include:
- Credit Card Debt: Credit card debt is one of the most common types of debt canceled through debt settlement programs.
- Medical Bills: Unpaid medical bills can be negotiated for a reduced settlement amount.
- Personal Loans: Unsecured personal loans, such as those obtained from banks or online lenders, can be eligible for debt settlement.
- Payday Loans: High-interest payday loans are often eligible for settlement negotiations.
- Collections Accounts: You can sometimes settle accounts sent to collections agencies for less than the original debt amount.
- Unsecured Lines of Credit: Similar to credit cards, unsecured lines of credit can be subject to debt settlement negotiations.
- Store Credit Cards: Credit cards issued by retail stores are another form of credit card debt you can settle for less than originally owed.
- Certain Business Debts: If you guaranteed an unsecured business debt, it may be eligible for settlement.
Not all creditors are willing to negotiate debt settlements, and the likelihood of successful negotiations can vary based on individual circumstances and the creditor’s policies.
Secured debts, such as mortgages and auto loans, are generally not eligible for debt settlement because the creditor can repossess or foreclose on the collateral.
Before pursuing debt settlement, consult a reputable attorney who focuses on debt negotiation to assess your specific situation and explore the available options.
Debt settlement may have negative consequences for your credit score and financial stability, so it should be approached carefully and with a clear understanding of the potential risks and benefits.
Debt Settlement Scams
Debt settlement companies have become a prevalent option for individuals drowning in unmanageable debt, promising to alleviate financial burdens through negotiation with creditors.
While legitimate debt settlement firms exist, there is a troubling underbelly of scams and unscrupulous businesses that prey on vulnerable consumers.
These scams often involve deceptive practices, such as charging exorbitant upfront fees, promising unrealistic debt reduction percentages, and failing to deliver on their commitments. Some even advise clients to stop paying creditors, leading to further financial distress, damaged credit, and potential legal consequences.
In contrast, hiring a debt settlement lawyer can offer a safer and more reliable path to debt relief. Attorneys are bound by ethical and professional standards, which means they have a legal obligation to act in their client’s best interests.
They possess a comprehensive understanding of debt laws and regulations, ensuring their negotiations with creditors adhere to legal guidelines.
Furthermore, debt settlement lawyers can provide protection from aggressive creditors, handle potential legal issues, and tailor a personalized debt settlement strategy to your unique financial situation.
While attorney fees may be involved, the assurance of professional guidance and ethical representation makes hiring a debt settlement lawyer a more secure and trustworthy option for individuals seeking relief from overwhelming debt.
When choosing assistance in navigating the complex world of debt settlement, the experience and integrity of a qualified attorney offer a safer route to financial recovery.
What Do Debt Settlement Lawyers Do?
Debt settlement lawyers are crucial in helping individuals and businesses negotiate and settle their outstanding debts with creditors.
Here are the primary tasks and responsibilities of debt settlement lawyers:
- Debt Analysis: Debt settlement lawyers begin by thoroughly reviewing their clients’ financial situations, including all outstanding debts, income, and assets. They assess the viability of debt settlement as a debt relief strategy based on the client’s specific circumstances.
- Negotiation with Creditors: Debt settlement attorneys negotiate directly with creditors or their representatives to reach mutually acceptable settlement agreements. They use their knowledge of debt laws, regulations, and negotiation tactics to secure favorable terms for their clients.
- Customized Debt Settlement Plans: Lawyers create personalized debt settlement plans tailored to the client’s financial capabilities and the nature of their debts. These plans outline the proposed settlements, payment schedules, and other relevant terms.
- Legal Protection: Debt settlement lawyers provide legal protection for their clients, ensuring that creditors follow applicable laws and regulations during the settlement process. They can address any legal issues, such as lawsuits or collection harassment.
- Settlement Documentation: Lawyers prepare and review all settlement agreements and documentation to ensure accuracy and compliance with legal requirements. This includes verifying that the agreed-upon settlements reflect the client’s best interests.
- Debt Resolution: Once a settlement agreement is reached and accepted, the lawyer ensures that the negotiated payments are made to creditors according to the agreed-upon terms.
- Communication Liaison: Debt settlement attorneys act as intermediaries between their clients and creditors, managing all communication related to the settlement negotiations. This can help reduce stress and harassment from aggressive creditors.
- Legal Advice: Lawyers provide legal counsel to clients, advising them on the potential consequences of debt settlement, its impact on credit scores, and alternative debt relief options like bankruptcy.
- Monitoring Progress: Debt settlement attorneys regularly monitor the progress of settlements, adjusting as necessary and keeping clients informed about the status of their debts.
- Full Debt Resolution: A debt settlement lawyer helps clients resolve their debts, often resulting in significantly reduced balances that clients can afford to pay off.
Hiring a debt settlement lawyer can provide individuals with legal protection and experience that may not be available when working directly with debt settlement companies.
Carefully consider the costs and benefits of hiring an attorney and ensure they choose a reputable, experienced professional for their debt settlement needs.
Costs of Hiring a Debt Settlement Attorney
Some worry that hiring a debt defense attorney will be too expensive. They think the fees will be too high for them to afford, but that’s not the case.
We understand how pivotal it is to move out of debt and charge as little as possible to make our services accessible to as many people as possible. Our pricing is budget-friendly and hard to beat anywhere in the country. We must all work together to get our country out of this debt crisis.
We offer a complete debt defense package. Here’s how our pricing works:
We charge either 10% of the amount you’re being sued for or a minimum of $1000, whichever is higher. On top of that, there are some filing fees you’ll need to pay.
For example:
- If you’re being sued for $4500, your total cost for a full defense would be $1000, plus the filing fees (these vary depending on the lawsuit amount and where it’s filed). So, in this case, you won’t pay more than $1000 for our services.
- If the lawsuit against you is for $35,000, your cost for a complete defense would be $3500, plus the filing fees (which also depend on the lawsuit amount and location). Again, your total cost won’t exceed $3500 because that’s 10% of what you’re being sued for. This ensures that our debt defense services are both transparent and affordable.
Benefits of Hiring a Debt Settlement Attorney
Hiring a debt settlement attorney can be beneficial in several situations.
Here are some circumstances in which you might consider hiring a debt settlement attorney:
- Complex Debt Situation: If your financial situation is particularly complicated, involving multiple creditors with varying types of debt (e.g., credit card debt, medical bills, personal loans), a debt settlement attorney can help you navigate the complexities of negotiations and develop a comprehensive debt settlement strategy.
- Legal Issues: If you believe your creditors have engaged in unlawful or abusive practices, such as harassment or violations of debt collection laws, an attorney can address these legal issues while negotiating debt settlements.
- High Debt Amounts: When you have significant debt to settle, the stakes are higher, and creditors may be less inclined to negotiate favorable settlements. An attorney can use negotiation skills to seek larger reductions and more favorable terms.
- Legal Proficiency: Debt settlement attorneys deeply understand debt laws and regulations, which can be advantageous when dealing with creditors. They can ensure that the settlement process complies with relevant legal requirements.
- Creditor Resistance: If your creditors are uncooperative or unwilling to negotiate, involving an attorney can add credibility to your negotiation efforts and increase the chances of settling.
- Protection from Lawsuits: An attorney can provide legal advice and help protect you from potential legal action creditors may pursue, such as lawsuits or judgments.
- Personalized Strategy: Debt settlement attorneys can tailor a strategy to your specific financial circumstances, ensuring your interests are best represented during negotiations.
Research and choose a qualified and reputable attorney with experience in debt settlement and a transparent fee structure.
Contact Our Debt Defense Lawyers at Kazerouni Law Group
If you’re having difficulties settling a debt, our team is ready to stand by your side. At Kazerouni Law Group, our debt defense attorneys offer nationwide assistance.
Facing issues like harassment, misleading collection practices, or a lawsuit from a debt collector?
Our consumer protection attorneys have the experience and resources to safeguard your rights and offer solid legal advocacy.
Contact a consumer protection attorney at (800) 400-6808 or a debt defense lawyer online for a complimentary consultation and learn how we can help you today.