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Debt settlement can be very beneficial to you if done properly and by a law firm.  While this is one area of the law that you may successfully represent yourself without hiring an attorney, there are still many advantages to hiring a full service law firm. If you would like a like free consultation, call Leftwich Law today. Don’t hesitate! Call now at (602) 266-8080.

This page will discuss the debt settlement process enabling you to be well informed and make empowered decisions about your own financial future. Yes, you can work out beneficial arrangements with creditors yourself, especially if the debt you owe is small. But remember for larger debts it will behoove you to hire an experienced attorney preferably one who handles both debt settlement and bankruptcy. Why? At Leftwich Law, we feel that it gives you additional leverage to have your creditors accept initial low offers from you.

Under the “carrot” and the “stick” approach, the first offer is around 15% or 20% of what is owed. The idea communicated to your creditor is it is better getting “something” now or possibly getting “nothing” later. The “carrot” is the lump sum payment the creditor receives and the “stick” is threat of filing for bankruptcy protection. Creditors necessarily spend money in the collection of a debt. Many times these collectors see their investment vanish only to see the debtor file for bankruptcy protection. This is a fact you can use to your advantage.

But, if you do not qualify for bankruptcy or simply do not want to file for bankruptcy then debt settlement may be your one and only viable option. To start the process, you should consider the following factors, your offer may depend on whether you are being sued by the original creditor or by a collection agency on behalf of the original creditor. If it is a collection agency collecting the debt, the agency and/or law firm may or may not have more freedom or more willingness to negotiate an acceptable debt settlement. This is but one of many factors you should consider.

In any case, we have found in negotiating with creditors such as banks and credit card companies over the last several years that it is best to initially offer in the area of 20% of the amount being sued for, inclusive of attorneys’ fees and court costs. The collection agency will either accept or reject the offer. Many cases the collection agency or law firm will make you a counter-offer. Often times, the first offer is accepted as a full release. Sometimes, you may even make payments to the collector. Please note, in most cases the debt is listed as “Settled for an amount less than what was owed” on the credit reports but this term may be negotiated too.

In conclusion, many consumers try to settle debts themselves without the assistance of an attorney. This may be a costly mistake. Because by choosing to go it alone and not hiring a professional,  may result in paying more money to settle the debt than it would have been to have paid an attorney to settle it.  Please note, you are entering into a binding legal contract and you need to be certain that the creditor is going to follow through with the agreement.  Many creditors demand a settlement payment within 24 hours and will only give you a written confirmation of settlement after all the money has been paid. But remember this contrived pressure situation is usually a trap. The creditor places tremendous pressure to settle and uses this tactic to force you into a bad agreement. Unfortunately, it is a legally enforceable agreement with severe consequences for breach.  At Leftwich Law we have handled hundreds of debt settlement cases so you will be on an equal playing field with the collection law firms. Remember, we offer a free consultation for bankruptcies and debt settlement cases! Call Leftwich Law at (602) 266-8080.

 

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