Get help finding the Right Debt Negotiation Lawyer for your case
Debt negotiation, also called debt arbitration, is the process of negotiating with a creditor to pay off your bills by reducing a portion of the balance that is owed on your unsecured debts. Debt negotiation can get you a lower payoff of your debt. Debt negotiation can also help you significantly reduce the outstanding balance of a loan. The amount of unsecured debt is typically reduced by 30% to 60% over the course of 2 to 3 years. It can also help protect you from harassing calls from collection agencies and helps you repay at your own convenience.
You may need debt negotiation if you have:
The types of accounts eligible for debt negotiation include credit cards, department store credit cards, unsecured personal loans, rent, utility bills and auto repossessions. Exclusions to debt negotiation include car payments, pay day accounts, military accounts, credit unions, mortgages, student loans, secured loans and income tax payments.
Debt negotiation is also known as debt arbitration or debt settlement. It is a negotiation between a consumer and a creditor, in which both parties agree upon a reduced debt balance and/or a mutual agreed upon payment plan. Once paid, the debt is marked as paid in full. In a debt negotiation, you work with a creditor or a debt collector to lower the balance of your unsecured debt. This typically occurs if you have fallen behind in payments, have trouble paying your credit card bills, or if a loan account has been sent to a debt collector. The creditor or debt collector might agree to lower your balance if you pay the debt in one lump sum, or they might lower your monthly payments temporarily or permanently. This provides those with high debts an alternative to filing for bankruptcy.
If your debt qualifies for debt negotiation, your balance typically can be settled for anywhere from 30% to 70% of the amount you owe. Types of debt that can usually be settled this way include unsecured debt, credit cards, store credit cards, medical bills, personal loans and bank loans. Debts that are typically not eligible for debt negotiation include student loans, car payments, mortgages, secured loans, credit unions, and income tax debts.
Creditors are often willing to accept less than the full amount they are owed because they know they might receive nothing if you declare bankruptcy. Creditors often prefer some of their debt immediately rather than wail long periods of time for most or all the debt. However, while debt negotiation can help make your financial situation more manageable, it does come with consequences. Debt negotiation may negatively impact your credit score and show on your credit report for up to 7 years. The IRS may also count any debt that is forgiven as taxable income.
Beware, there are many credit settlement companies that may offer to help you, which cause your debt to rise due to many added fees and charges for their services. These companies also increase your risk of being sued by a creditor, and there is no guarantee that the creditor will accept a settlement on your debt. Before you selected a debt negotiation lawyer or service research their record or get a referral from a trusted source. Before you settle on a debt negotiation strategy be aware of the risks and potential consequences.
Dealing with creditors and debt collectors on your own can be difficult, and using debt settlement companies is a risk. Therefore, using a debt negotiation lawyer to help you with debt negotiation may be your best option. A skilled and experienced attorney can properly assess your financial situation and best advise you on the debt management solution that is right for you. An attorney can deal directly with your creditor to help negotiate a lower payment or settlement on your behalf. Using a lawyer to assist you with debt negotiation can also negotiate interest or late fee penalties and can help represent you if you receive a lawsuit from a creditor or debt collector.
Attorney Search Network can provide you with a referral to an experienced consumer lawyer to help with your debt negotiation today. We will connect you to the right attorney that will negotiate a debt settlement on your behalf so that you can begin to feel some financial relief fast.
If you have any questions about the information provided above, please contact us. Call us toll free at (800) 215-1190 or fill out our online form for your consumer law lawyer referral.