Debt Collection Law Firm
When debtors cannot repay money owed, debt collection attorneys can provide solutions that will bring this harassed person to the place where he can be financially free. Many agencies offer services that claim to give methods of financial relief, but many are not capable of finding their way through the morass of laws and regulations that entangle debtors. A debt collection law firm can advise the person on how to manage the tax issues that follow any changes in his financial situation. For example, is a debtor owes $50,000 to credit card companies, and this amount is negotiated to $25,000, the IRS considers the reduction in loan amounts by $25,000 as income. It has to be reported as such. He needs a specialist who has a knowledge of all parts of the contract law, tax law, bankruptcy law, and others. This legal company can offer more solutions than a credit counseling service can.
Debt collection attorneys will assess the debtors circumstances to find out which solution will serve him best. Some of the solutions are consolidation, settlement, or bankruptcy. Each solution has it advantages and disadvantages, and since each persons financial situation is unique, time must be spent analyzing the best method to attain financial freedom. For example, a person with a lot of assets such as property may not want to claim bankruptcy because these assets may be liquidated as part of the process. On the other hand, if a person only has unsecured loans such as credit cards, a bankruptcy would not affect any assets. The debt collection law firm has the expertise to analyze these issues and present them to the client. Because the fees charged by lawyers may be higher than those charged by a credit counseling service, people who have more assets and a higher income may need the services more desperately. Someone who has few assets and limited income may be best served by settlement companies. However, the person who hires a lawyer who specializes in this type of financial process should carefully check out the reputation of the company and the success it has in negotiating with creditors.
Two of the solutions to overwhelming debts are consolidation and settlement. With consolidation, the loans are collected into one pile, usually with a much lower interest rate, and a payment schedule is written to aid the debtor in repaying the money. With a settlement, the debt collection law firm negotiates with the creditors to come up with a new amount that the debtor has to pay, sometimes as low as 50 percent of the original total. The new amount will depend on the skill of the negotiators, the internal policies of the credit card companies, and the financial distress of the person who owes the money. As soon as debt collection attorneys are hired to negotiate with the creditors, they inform the creditors, and the creditors must refrain from hassling the person who owes them money. That means that the person in financial distress will cease getting threatening mail and telephone calls. A lawyer reviews the financial situation of the debtor and then makes a plan for handling the problems. The client must agree to this plan, and then it goes to the creditors for their approval. This is a back-and-forth process that eventually concludes in a plan that is binding on the debtor and the creditors. Usually, the lawyer will act as a trustee to whom the client pays payments, ensuring that the creditors receive what is owed to them.
Repayment plans may last from a year to three years, depending on the situation. The plan is called a debt management program. When debt collection attorneys collaborate with creditors, they negotiate for lower interest rates. For example, if the person with credit cards has failed to pay on time or has gone over the limit on the card, the interest rates and fees may soar, causing the card owner to realize increased amounts of debt he cannot repay. Debt collection law firm will argue that by forgiving these fees and enabling the person to repay, the creditor will avoid losing all the funds due to a bankruptcy or accrue more expense by having to turn the account over to a collection agency. The lawyers may argue that this debtor is sincere about giving an account of himself and doing the best to follow through with a management program. In turn, the principal on the debt can be paid on immediately. If a person is paying the minimum payment on a credit card loan, it may take fifteen to twenty years to repay the amount. With the management program, even if it takes three years, that is a substantial savings.
When a person deals with the problems that have come up in his life, especially money problems, he can feel a pride in showing a responsible attitude. The debtors finances can be stabilized while working through the legal system to handle them to become financially free. In the process, more money will be freed to use for monthly expenses and budget necessities. The Bible tells us, Many are the afflictions of the righteous, but the Lord delivereth him out of them all (Psalm 34:19). Hiring debt collection attorneys can be part of the deliverance. A debt collection law firm can be the light that shows us the way to get out of the morass of debts we cannot repay.
Debt Settlement LawyerDebt settlement lawyers are generally hired to take care of clients who have $25,000 or more in credit card and other unsecured debts to settle. While people in higher incomes may have savings or investment accounts they could draw on, they prefer to keep those assets free of encumbrances, so they hire an attorney to help them with their money problems. No matter what level income, there are people who do not handle money well, so there are debt settlement lawyers to help them out. In addition to professional help, God can provide strength for those who are financially overwhelmed. "Wait on the LORD: be of good courage, and he shall strengthen thine heart: wait, I say, on the LORD." (Psalm 27:14) It would be unwise, though, for a debtor with a smaller line of debt (and presumably smaller income) to hire a debt settlement lawyer. For someone who needs to spread the payments out to 36 months or more, the attorney isn't recommended either. They prefer to finish the payments in no more than two years.
There is an advantage to hiring a debt settlement lawyer, in that the debtor can presume he knows the laws that cover the rights of both the debtor and creditor well enough that he can press harder for settlement than someone else. The time when it is most necessary to have an attorney handling a case is when the debtor is faced with bankruptcy. If the situation has gotten to the point where that is the only way to solve the problem, then hiring an attorney is what must be done. Check out the references of debt settlement lawyers before hiring them, though. Get someone who has handled other clients' cases successfully. Some of the professionals who advertise on line include examples of cases they have handled successfully. Check with the Better Business Bureau for complaints against the firm as well. It is extremely important to hire an attorney who is legit and successful in financial issues.
Some debt settlement lawyers advertise that they can reduce debt by 50 to 65 cents on the dollar, and their fees are based on the amount of savings they actually achieve for their clients, i.e. 25% of whatever was shaved off the total due amount. When the saving is not at least 30%, however, a debt settlement lawyer will waive his fees. Sometimes the professional is really a bankruptcy attorney, and guides a debtor in that direction. Other times, the firm actually negotiates with creditors to reduce the amount of the money due for a lump sum. Where a lump-sum payment is not possible, clients can pay monthly amounts over periods from 9 to 24 months. The fee charged by the debt settlement lawyer is added to the owed amount.
A debt settlement legal attempt is a way an individual can negotiate the balance of an outstanding debt owed and persuade the creditor to accept it as a "paid in full" final payment. This attempt can be done two ways: first through a third party, or second directly between debtor and creditor. For example: let's assume a debtor owes $5000 on a credit card, an attempt would be to offer the creditor $2000 as payment in full and one lump sum. A third party can also be hired to act as an intermediary. These third part companies negotiate on behalf of the debtor for a small fee, or percentage of the settlement.
There are some companies that are non-profit and offer this service for free, but a history of settlement should be reviewed before choosing any third party service business. Firms that offer this settlement service have names that incur they will help with debt such as; management, reduction, relief, workout, and settlement. Usually creditors will determine if they will allow a debt settlement legal attempt. Their decision is based on each individual person requesting the settlement. If that person seems to be a good candidate for bankruptcy, where the creditor will receive nothing, the creditor will often opt to take the attempt rather than get nothing.
Ideal candidates are those that have not made any payments in the last several months and have other credit card debts in delinquency. People who are in this situation and do not have any equity (home or car) also make good candidates. People who have a low income and who show no sign of dramatic income increases in the future are also considered. Romans 15:13 "Now the God of hope fill you with all joy and peace in believing, that ye may abound in hope, through the power of the Holy Ghost." Creditors check an individual's credit report to see if the potential debt settlement legal presenter is current or delinquent with any other creditors. If so, the creditor will usually attempt to settle for 75% of the debt. This is usually too high and can be negotiated down if most of the balance is in interest, and late fees.
Most credit card attempts have been in the 30%-50% of the balance range. Creditors almost always require lump sum payments but some will arrange a short term payment plan lasting an average of 3-6 months. Rare but not unheard of is the long term option. Some financial management companies have been able to get higher balance payment plans to extend from 1-4 years. Before offering a debt settlement legal attempt, it is wise to note that if a credit score is on the higher side, it will reflect a lower credit score in the future, but if a credit score is extremely low, a debt settlement can improve it.