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Many people are financially impacted due to the ongoing pandemic that has affected the sources of livelihoods and impacted people’s health leading to the accumulation of debts.
Some debts may be difficult to settle, and you may need a debt negotiation service in such a case.
Debt settlement attorneys protect you as the debtor from exploitation by the creditors. They are well versed with contract law; they know consumer rights law and have good negotiation power.
Therefore, they can persuade the collectors to settle for less than you owe them. Lawyers will give you helpful legal advice to ensure the law will cover your assets.
Debt settlement attorney provides you with various options; they evaluate multiple factors such as your income, assets, and living conditions.
What are the options for debt management?
1) You can negotiate on your own
2) You can file for bankruptcy
3) You can hire a debt Attorney
4) You can use a debt settlement company
Factors To Consider Before Investing in a Debt Settlement Attorney
- Do your due diligence and hire an attorney from a reputable firm.
- Attempt to negotiate on your own with the creditors.
- If you can meet the minimum payment required, continue making the payments.
Should You Hire a Debt Settlement Attorney?
Some circumstances might force you to seek the help of a debt settlement attorney:
Unable to Negotiate – You have been unable to negotiate with the creditors on your own or when the collector refuses to settle.
The debt attorney will come in as a third party to satisfy both parties. A debt settlement attorney has experience from the many years they have been working in debt settlement, and they will be able to settle on a good offer for you.
If your creditors are suing you – If your creditor issues a lawsuit against you, it is wise to seek the help of a lawyer. Attorneys understand the law, guide you through the process, and help you minimize the legal risks.
Avoid filing for bankruptcy – If your debt has accumulated to overwhelming amounts and filing for bankruptcy seems like the easiest solution, then seek the help of an attorney.
The downside of filing for bankruptcy is that it is expensive, you will not be able to borrow loans, and it will stay on your record for many years.
Wages or assets are at risk – When you are unable to make the minimum payments and the creditor is after your income, seek the assistance of a lawyer. The attorney can offer other available options you may not know.
What Are the Prices for a Debt Settlement Attorney?
When you hire the services of an attorney, you will get value for your money. Compared to other debt negotiation options like debt servicing companies, the pricing is relatively fair.
Many attorneys offer a free consultation over the phone or in person. There are many payment options that the attorney may provide you.
You should agree on the fee in the initial stages of the meeting. You may be charged a contingency fee- let them get a share from the amount they get to settle.
In other cases, you may be charged an hourly rate fee. The amount will depend on the number and the type of creditors you have. Complex negotiations will cost you more.
How Does a Debt Settlement Company Work?
Debt companies talk to your creditors into settling your debt on your behalf. You save with them until you have enough money to pay your debt.
Once you have enough savings, the debt settlement company will contact your creditors on your behalf and offer them a lesser amount than you owe them.
Note: Why you should not consider a Debt Settlement Company over a debt settlement attorney
Both have pros, but you would instead settle your debt alone or file up for bankruptcy than deal with a debt settlement company. Both will ensure that you pay less than you owe the creditors.
Debt settlement companies are for-profit; their settlement fees are high, and you would rather spend that money towards paying your creditors.
Lookout for These Issues
Beware of Scammers: not all debt settlement companies can be trusted with your money; they can disappear without notice.
Your debt increases. Because you will stop making the payments towards your debt, your debt will compound due to added interest rate.
It will affect your credit score- when you miss making a payment towards the debt, your creditors will report you to the credit reporting bureaus.
Your creditors might refuse to settle on a lower amount if you work with a debt settlement company.
Debt settlement companies cannot offer you legal advice.
How does one become bankrupt?
You are supposed to file for bankruptcy to seek relief from creditors when you cannot pay the debts. It is a legal process. Other ways are more suitable for debt settlement, such as using an attorney.
Debt collection and settlement Scams
Scammers are all over. You may encounter imposter lawyers, especially when you do over-the-phone meetings instead of in-person meetings.
Debt Settlement Company’s masquerading as law firms; some law firms are debt collection companies which may put your debt circumstance in a worse state.
Debt collection scammers might demand that you pay the total amount right away. The scammers might use threats and intimidation.
Debt collection scammers might ask you for payment via wire transfer or other ways which are not easy to trace
To avoid getting scammed when trying to settle your debts.
Always have face-to-face meetings with your debt settlement attorney. When making payments toward settling your debts, always use means that can be traced, such as bank transactions.
Conclusion
Using a debt settlement Attorney is the most preferred way to settle your debts, unlike using a debt settlement company or filing for bankruptcy.
A debt settlement attorney will offer you value for your money. They are vastly experienced with debt settlement and will help you determine the best route.
It is essential to ask your lawyer how solid your case is and consider the costs associated since lawyers cost money.