If you find yourself overwhelmed by debt but are not quite ready to consider filing for bankruptcy, try debt relief first.
WHAT DEBT IS RELIEF?
It goes by many names: debt relief, debt settlement, debt reduction, debt negotiation, debt resolution, etc. Often it applies only to unsecured debt, which is a debt that is not secured by collateral, like credit cards and certain types of loans.
Settlements are negotiated with the creditors in an attempt to lower the amount of debt due. Once an agreement is met, the terms of the debt relief are put into a contract. Often, the creditor will forgive a large part of the debt in return for one lump-sum payment in exchange for the debt to be considered canceled and the matter closed.
DO I NEED A LAWYER FOR MY DEBT RELIEF?
If you are experiencing financial hardship, consider contacting a lawyer. An experienced debt relief lawyer will:
- Go Over All the Options. An experienced lawyer will take a detailed look at your specific situation and be able to make the best recommendation for you, whether that is debt relief, payment plans, or even bankruptcy
- Practice Ethically. Lawyers must be licensed by the state bar and as such are required to be familiar with both the legal and ethical requirements of working as a debt relief lawyer
- Handle the Negotiation. Lawyers are experienced in arguing for their clients. They’ll be the one to deal with those pushy creditors, not you.
- Draft the Settlement Proposal. If an agreement is met, the creditor and you will sign a contract containing the terms of the settlement. You’ll want someone who knows how to draft such a contract.
- Charge a Fee. Of course, there will be a fee. The lawyer (as opposed to a non-lawyer) is required to be upfront with you about how they are charging their fee, whether it be a flat fee, hourly fee, or contingent fee.
BEWARE OF THIRD-PARTY COMPANIES
Debt relief services are often offered by third-party, non-lawyer companies. These services are for-profit and don’t operate under the same legal and ethical guidelines of lawyers, though sometimes they masquerade as law firms. While many of these do successfully negotiate with creditors, they often come with various hidden fees that may mean you end paying more for the debt than if you just continued making regular payments. If you consider a third-party debt relief company, make sure to really do your homework first.
HIRE A DEBT RELIEF LAWYER
Hiring a lawyer to assist you is one of the most important steps in successfully settling a debt and avoiding legal consequences. Find someone who is already familiar with debt relief practices and rest assured knowing that your case is in competent hands.