What is Debt Settlement
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What is Debt Settlement?
Debt settlement is a process in which an individual negotiates with creditors to settle their debt for a reduced percentage of what they original owed. When a client doesn’t settle their debts, it is likely that creditors will file collection lawsuits to attempt to get judgments against their consumers. While settling can be done by oneself, most people retain a consumer debt law firm to help with the negotiation. A consumer debt law firm helps their clients through the process of debt settlement by directly negotiating with creditors in order to get the debt settled. Once the debt has been settled, the debt amount is usually paid in one large sum, but it’s possible to pay monthly depending on the terms of the negotiation.
Debt settlement can provide notable savings to individuals, as most people settle for a percentage of about 50% of the outstanding balance. This is a good offer for people who cannot afford to pay back their original balance.
Another reason debt settlement might be worth looking into is that it prevents collection lawsuits from being filed against you. Lawsuits result when a client has not paid or settled their debt after a certain amount of time, and they can increase your debt by having to pay for court fees, appearance fees, etc. Choosing debt settlement can help you avoid these extra fees by coming to an agreement with your creditors without having to enter a courtroom.
Now that we’ve talked about what debt settlement is, let’s look at the process of settling debt.
A Brief Overview of the Process of Debt Settlement.
Debt settlement may seem complicated at first but broken down into a few key steps will make understanding the process a lot easier.
When a consumer doesn’t pay back their debt with a creditor, or if they make their payments late, it is considered a default on their debt. It is usually the case that a consumer isn’t eligible for debt settlement until they have defaulted on their debt at least once. This is because their account doesn’t show an inability to pay back their debt before this delinquent activity begins.
After so many defaults with their creditor, a consumer is at risk of having a collection lawsuit filed against them. However, a lawsuit isn’t necessary for a consumer to settle their debt. Once a consumer has decided they would like to work towards debt settlement, they must decide if they would like to settle alone or with a consumer debt law firm. While it’s possible to settle debt without retaining any legal counsel, many people prefer to retain a consumer debt law firm, such as Weston Legal.
Consumer debt law firms are popular for debt settlement because they have years of experience negotiating with creditors and settling debts for a reduced percentage. Furthermore, these firms have lots of experience in defending their clients from any lawsuits filed against them. So, while an individual is capable of settling their debt alone, a consumer debt firm can provide more security with their years of experience leading the way.
Once you decide which legal route you would like to take, the next step is to negotiate with your creditor in order to attain a debt settlement agreement. This written agreement will release you from the debt you no longer owe due to the newly reduced debt amount. The amount the creditor may settle for depends on several factors, such as: the amount of the debt, the creditor, the law firm the creditor utilizes, etc.
Should the creditor have filed a lawsuit or judgement against you, you would either file the proper forms or have your retained consumer debt law firm file them on your behalf. From there, you will work (either alone or with your attorney) to avoid any further costs due to court-related fees. If going to court is unavoidable, rest assured Weston Legal has years of experience getting client favored dismissals in the courtroom.
Now you are debt free. Keep in mind this is a brief overview of what the debt settlement process looks like. Each case is unique and comes with its own set of circumstances. There is no reason to fear this uncertainty with Weston Legal guiding you every step of the way.
Is Debt Settlement Right for You?
Debt settlement does favor some circumstances over others. You may find that you are a good candidate for debt settlement if you have any of the following:
- If you have defaulted on paying your credit debt.
- If you would like to immediately stop creditor harassment.
- If you lack the financial means to pay court-related fees.
- If you are looking to avoid a judgement being filed against you.
- If you are looking to avoid collection lawsuits.
- If you are looking to quickly settle your debt.
- If you lack the financial means to pay your debt.
- You do not qualify for Chapter 7 Bankruptcy, or you would like to avoid Bankruptcy.
Keep in mind that if you don’t meet the criteria above, it doesn’t mean that you can’t work towards a debt settlement. Each debt settlement case is unique and therefore we can only offer a general idea of what makes a good candidate.
If you are unsure about whether debt settlement is right for you – or whether you would be a good candidate – click here for a free consultation.
Alternatives to Debt Settlement.
If you don’t qualify for the process of Debt Settlement, there are still viable alternatives to ridding yourself of your debt.
The most notable alternative is filing for bankruptcy. Bankruptcy is seen in two forms: Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. In both instances, the debt amount the client must pay is alleviated to a certain extent. Weston Legal has attorneys for both types of bankruptcy should you take this route instead.
If you are unable to settle your debt because a creditor has filed a debt lawsuit against you, Weston Legal can also represent you. Once our services are retained, we will work to prevent a default judgement from being filed against you. The majority of the lawsuits we fight are either dismissed or settled at a substantially reduced rate.
If you cannot settle your debt because a Judgement has been filed against you, Weston Legal can work to get you either to vacate your default judgement or get you a partial release of judgement.
Feel free to visit our results page to see Weston Legal’s numerous dismissed case results, the common creditors that we fight, and more.
You can also visit our testimonials page to see what our previous customers had to say.