Debt Settlement Attorney call 1-888-505-2369 for a free consultation
A debt settlement attorney specializes in negotiating with creditors to reduce the amount of debt the individual must repay. They will contact each one of your creditors and each collection agency to stop the late fees, penalties, and premiums building up on all accounts.
The debt settlement attorney will establish agreements so that the credit card companies and collection agencies will contact the attorney instead of the consumer. It is also the responsibility of the debt settlement attorney to obtain the consumers credit report and work to remove any misleading, unsubstantiated, or incorrect items. This is a very important service that should be utilized by the consumer to restore credit ratings and create a plan for future financial management.
Debt settlement is much more aggressive than credit counseling, and it
can get you out of debt in half the time of credit counseling. Many
states have laws regulating debt negotiation companies. To see if your
state permits debt settlement, contact your state Attorney General.
If you ignore the debt long enough, you stand a good
chance of never hearing from the creditor again. Seven years after the
debt is written off, the negative listing disappears from your report
altogether. But if you pay the debt sometime before the end of that
period, the seven year cycle starts all over again, not exactly what one
would call an incentive. It's like getting time added to your sentence
for good behavior.
Fortunately, creditors make their money by
collecting the debts, not by reporting negative credit information.
Creditors recognize this catch-22, and are therefore often willing to
delete the negative listing upon settlement. If you are going to settle
with a creditor, be sure to have your debt settlement attorney negotiate
removal of the listing from your report.
Keep in mind that using
a debt settlement attorney usually applies to unsecured debts like
credit cards, medical bills and department store cards. Things like
mortgages, student loans, alimony and child support fall into the
category of secured debts and there is usually not much that a debt
settlement attorney can do with these types of debts.
In debt
mediation the consumer confers his mediator with a limited power of
attorney to work out lump sum settlements on specified debts at reduced
amounts. The consumer ceases their credit card payments and instead pays
the mediator an agreed amount monthly to fund settlements.
Debt
mediation addresses the amount owed (principal) as well as interest and
fees, sometimes reducing the total obligation to as much as 40% of the
original debt. Creditors prefer such settlements to the risk of
bankruptcy and report such settlements "paid as agreed" on the
consumer's credit record.
Your credit could, however, be affected
in a negative manner. Some creditors will not mark their debt paid as
agreed, and it will remain on your credit report for a number of years.
Consumers still opt for debt settlement because they find it preferable
to bankruptcy. Usually, the way it is reported on your credit record
involves the words "Settled" or "Settled as Agreed" or "Paid as Agreed".
However, all the late payments may remain on your credit report until
the statute of limitations runs out. At that point, credit repair might
help to remove the negative marks if the reporting creditor fails to
provide documented proof to the reporting agency.
Using a
debt settlement attorney is vastly different from credit counseling. It
can be risky to your credit, but if your credit is already destroyed
you may have little to lose and more to gain by settling outstanding
debt.
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Consumer Credit Counseling Information, Debt Management Plan Information, Debt Settlement Plan information, Credit Counseling, Credit Score, Consumer Credit Counseling Service, CCCS, Bill Consolidation, Credit Repair, and Debt Consolidation is not advice, and we recommend you consult a licensed credit counseling agency, debt settlement attorney, and/or licensed debt management plan administrator in your state if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.
