Have you ever been in a dispute where you owe someone a very large amount in time to give other lenders what you owe them? I hope not, but if you do, the first person you should meet is a Debt Consolidation Lawyer, as they can help you negotiate with the lender to lower the amount you owe them in a legalized manner when you have taken a large amount of unsecured debt. This debt doesn’t require any collateral, such as the use of credit cards, student bills, and medical bills.
Debt Consolidation Attorney are the professionals who fees depend on the number and types of creditors, let’s say at a minimum, a debt consolidation attorney charge 15% to 25% fees to tackle with your debt, now it may be either the amount you have agreed to pay upon or the portion of the amount made out of the original amount which is owed.
How does it work with the debt settlement?
Debt settlement, also known as debt negotiation, involves paying a portion of the whole amount in a lump sum and is less than what you owed the creditors. It mostly involves credit issues with the credit card companies or any other type of debt. The debt consolidation lawyer must also know how to negotiate for the unsecured debt.
A debt settlement company handles it differently from other DIY approaches, and the process is most likely looks like when hiring a debt settlement company. To investigate more on the process, these are the things you will need to follow, such as:
- Research debt settlement companies- Several legitimate companies operate in the US that is licensed. They are supposed to follow industry regulations that are designed to protect the consumer and their money.
- Be cautious- They will promise certain results. You will have to take every step with proper research because no one can promise that their creditors will agree upon deb settlement. So, choose wisely.
- Cost-effective- It wouldn’t even matter to hire a debt consolidation lawyer if he asks for more out of your capacity, so evaluate an estimate of debt you owe and try to pay him between 15%-25%. Otherwise, eventually, it will be your loss.
- Review your finance- It specifically requires putting money in a saving account for 24 months before the debt is completely settled. Hence, before going for debt settlement, it might be possible that some or all of your debt is already settled.
- Inquire the timetable- It takes up to two to four years to complete the debt settlement. Over that time, interest is charged by the creditor in additional fees charged by the debt settlement company. So, start saving money before the debt settlement because it might be possible if you have halted payment to your creditor, you may be sued or called by the creditors.
- Know the tax consequences- The IRS counts any forgiven amount as taxable income if it exceeds $600. If you have settled a 1-million-dollar tax with just 50 thousand dollars, then you will be liable to pay for a whole 1 million dollars instead of just 50 thousand dollars.
Winding up the facts
There are several risks that an individual has to face who owes money to the creditor, such as negotiation problems, increased debt, negative impact on credit score, and many more.
You can do a few things to escape out of this hell hole which is defining alternatives to debt settlement like balance transfer to a credit card that offers 0% APR for an introductory period, for as long as 18 months, if you pay before the deadline you can end up racking up interest on the debt. Debt settlement comes through a company with more risks, weighing potential alternatives before committing to a relationship with a debt settlement company.