Debt Relief Attorney
Debt Relief Attorney
5 Reason to hire a debt relief attorney:
- Get a lawyer overseeing your debts. Not a debt management company.
- If you are sued, the attorney will respond to the lawsuit.
- The attorney will review any settlement agreements to make sure they are legal.
- Creditors cannot harass you or even talk to you if you have an attorney.
- Attorneys often prevent you from having to go to Court for the Debt.
When Should You Contact a Debt Relief Attorney?
This answer to this varies from person to person. Financial situations are very personal and what works for one person might be a complete disaster for someone else.
In general, if the money you owe on a monthly basis toward debt is so high that you are struggling to pay your mortgage, car payment, or utility bills, it’s a good indication your situation is dire enough to reach out to a debt relief attorney.
Contacting a debt relief attorney does not mean automatically filing for bankruptcy. As a matter of fact, you’ll be reviewing all of your options and in most cases, there are things you can do to improve your situation so bankruptcy is not necessary. Contacting a debt relief attorney can actually save you from bankruptcy.
What are Some Things a Debt Relief Attorney Can Do to Help You?
A debt relief attorney is a valuable asset. They offer a number of services, all designed to help you get debt under control and make a bad situation more manageable.
One of the primary things a debt relief attorney does is communicate with your creditors. He or she can negotiate new arrangements, and in some cases, might even be able to get a portion of your debt forgiven. They can also arrange a new payment plan that is easier to fit into your monthly budget than the amount you are currently paying.
If your situation is severe, they can help you with the bankruptcy process. The first thing you’ll do with a debt relief attorney is review your debts, assess your options, and determine how best to proceed.
How Do I Know Bankruptcy is the Right Choice?
If you’ve decided to take steps toward resolving your debt and you’ve realized your only option is to file for bankruptcy, you’ll need to determine which chapter of bankruptcy is right for you. Your debt relief attorney will help you do this and will evaluate your situation using the bankruptcy means test so you’ll for which type of bankruptcy you qualify.
Chapter 7 bankruptcy, the one most people think of when they hear “bankruptcy,” results in the bulk of your unsecured debt being discharge or eliminated. This means you’ll no longer be legally obligated to pay what you owe on the debt.
This is usually the best type of bankruptcy from those who do not own any or only a few valuable assets. You will be provided some protection under Chapter 7, but it is far less than what you receive under Chapter 13. The benefit of Chapter 7 is that your debts are discharged and in just a few months you’re able to begin moving forward and rebuilding your financial situation.
Chapter 13 bankruptcy, another option for individuals who need debt relief, is actually a repayment plan. Under Chapter 13, you work with the bankruptcy court to create a repayment plan that allows you to pay what you owe based on what you can afford. In some cases, you’ll ultimately pay less than your original debt amount, but this varies. Your debts are not eliminated in Chapter 13 and it takes much longer to complete than Chapter 7, but the advantage is you are able to keep your possessions.
Keep in mind, filing for bankruptcy, even with the assistance of a debt relief attorney, might not relieve you of all of your debts.
No matter what type of bankruptcy you choose, there are some debts that cannot be eliminated through the process. For instance, back payments owed on child support or alimony cannot be discharged. The same is true for most student loan debt and most tax debt. Still, bankruptcy can eliminate other debts, such as credit card or medical debt, potentially freeing up money to put toward other debts.
Debt Relief Attorneys Should Be Clear about the Consequences of Bankruptcy
Unfortunately, there are debt relief attorneys out there who pressure clients into bankruptcy or other debt relief options when these aren’t the best choice for them. It’s important when deciding whether or not to work with an attorney that you feel comfortable, and that you understand your options.
Bankruptcy can be a great option for those who are struggling financially, but it isn’t right for everyone. Timing is also important – it is possible things can still be done to prevent the need to file, but if your attorney pressures you into filing you’ll never know.
Bankruptcy comes with consequences. For many, these consequences are worth the trade-off. Both chapters of bankruptcy negatively affect your credit score, which means for some time after you file, lenders will be extremely reluctant to approve your request for a loan.
Of course, if your finances are in disarray, you’re already close to this point anyway and would not be viewed as a good candidate. However, it’s important to carefully assess your situation and determine if, from a future lending point of view, if bankruptcy is really going to help your situation.
It’s also important to realize that bankruptcy remains on your credit report for many years and filing is a matter of public record. Anyone who views your credit score for the next seven to 10 years, depending whether you choose Chapter 7 or Chapter 13, will see that you’ve filed. And while you don’t need to tell potential employers, family members, or anyone else you meet you’ve filed for bankruptcy, they can see that you have just by searching court records.
Despite the negative aspects of filing for bankruptcy, and the intimidation you might feel contacting a debt relief attorney, it might turn out to be the smartest choices you’ve ever made. If you’d like to know more about working with a debt relief attorney, or you want more information about debt or bankruptcy, contact us at 1.800.220.4318.