Finding yourself buried in loans and late credit card payments can leave you overwhelmed, especially when creditors start to hound you. Good thing, a debt settlement attorney in Salt Lake City or anywhere else in the state can help with your problem.
What is Debt Settlement?
Debt settlement is the process of paying a specific debt to a creditor, who agrees to a sum that is less than what the borrower owed. In a sense, it gives peace of mind that the borrower may not be sued over the debt if they were not able to pay in full. This also means that the borrower is safe from collectors who could try to hound them for money.
This may sound like a good deal, but experts say that it is best to be aware. This process does not work for all and could prolong the financial pain if not done right.
It is also best to be aware that the Federal Trade Commission (FTC) issued some rules that are designed to prevent practices that could potentially harm borrowers. One of them is that debt settlement companies should no longer charge client fees in advance. It should be done after the settlement instead.
How Can a Debt Settlement Lawyer Help You?
A debt settlement lawyer attorney is a type of lawyer who deals with reducing debts. They will negotiate with creditors in an attempt to lower the debt amount their clients need to pay back. The whole idea of hiring a debt settlement lawyer is to avoid filing for bankruptcy. However, there are instances when your lawyer will advise you to file for a bankruptcy, but only as a last resort.
When Should You Hire a Debt Settlement Lawyer?
Hiring a debt settlement lawyer is a good way to reduce your debts. However, it is also important to note that not all types of debt problems will require one. Debt settlement lawyers work best if you have an unsecured debt and the debt amount is significantly large.
Unsecured debts are usually issued based on the borrower’s creditworthiness and are usually not backed by any collateral. Some examples of this type of debt are credit card debts, medical bills, back tax payments, back child support, and student loans.
What are the Benefits of Hiring a Debt Settlement Lawyer?
Although unsecured loans don’t come with collateral, creditors can still come at you aggressively during debt collection. You may opt to deal and negotiate with them yourself. However, statistics show that when debtors try to work out a settlement with the creditors themselves, they still pay about 75% of their total debt. On the other hand, an experienced debt settlement lawyer can still reduce this number as low as 60%.
Qualified debt settlement lawyers have more experience when it comes to negotiating with creditors. They will most likely be able to convince them to reduce your overall debt amount, so they can still get back a part of what you owe them instead of losing everything should you file for bankruptcy.