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Understanding Debt Settlement

  • Understanding Debt Settlement

    debtSettlementIf you’re struggling with credit card debt, there are options available to get out of it, but unfortunately these options are not as simple as you might like.  You may for example choose to apply for a loan to consolidate your loan at a lower interest rate, but this requires having a good credit score.  Should you wish to go about it the old fashioned way by paying it off it may require making drastic changes in your budget or increasing the amount of money you earn.

    A third option is settling your debt for less than what’s owed, especially if you don’t want to declare bankruptcy.  You can choose to negotiate something with the creditor or you may want to consider working with an experienced attorney that has dealt with similar creditors. However, this option comes with consequences attached that you need to be aware of.

    For starters, most companies will not consider a settlement until an account is at least 60 days past due.  During this time your credit score will be negatively affected.  Settlement options generally involve a lump sum payment due within a short period of time. The benefit of this option is that the creditor may be willing to lower the debt significantly. Another option includes long term payment structures with low monthly payments. This option can be helpful for people that cannot come up with a large sum of money in a short time. Unfortunately under this option creditors are less willing to reduce the debt. Your debts will continue to remain delinquent or in default until you complete your payments. If you’re considering debt settlement, make sure to speak to a professional who can help you understand what your options are and the consequences.

    This information is provided by Miami bankruptcy lawyer Alonso, Perez & Santos, LLP.  Our areas of practice include bankruptcy, debt harassment, credit card defense, foreclosure defense, immigration law, insurance litigation, business start-ups, and more.  Call 305-676-7545 to speak with one of our attorneys and receive a free consultation.  We look forward to working with you.

    This information is provided for educational or informational purposes only and should not be construed as legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice.

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