Do you need a debt relief lawyer? Are you falling deeper into credit card debt, and you know you can’t even make the minimum payment due this month? Or, even worse, are you facing a debt collection lawsuit?
You need help to get options around your debt. While one option is bankruptcy, you can also pursue debt relief or debt settlement. This can be a good option if you have a large amount of unsecured debt that you want to lessen but don’t want bankruptcy on your credit records.
There are times when it makes sense to pursue a debt settlement over bankruptcy, but it’s essential to know the difference and to fully understand the role of a debt relief lawyer.
What Does a Debt Relief Lawyer Do?
A debt settlement attorney can negotiate with your credit lenders to try to reduce the amount of unsecured debt you owe. Typically, a debt relief lawyer will negotiate with your credit card company to try to lower your total obligation. Other common types of unsecured debt include student loans and medical bills.
How Is Debt Settlement Different From Bankruptcy?
When you have a large amount of unsecured debt that you can’t afford to pay back, your two main methods out of it are debt settlement or bankruptcy. While both can help you get rid of debt, they are very different options.
With bankruptcy, individuals typically file for Chapter 7 or Chapter 13 bankruptcy. Under Chapter 7, you may have to liquidate some assets to pay off your debts. After your bankruptcy, most of your debts are discharged. With Chapter 13, you arrange a repayment plan with the court over three to five years. Through the course of the plan, you will repay some of your debts. At the end of the repayment plan, any remaining unsecured debts are typically discharged. Both Chapter 7 and Chapter 13 bankruptcies go into public records. During both proceedings, creditors cannot hound you for payments or take actions like wage garnishment.
In contrast, debt settlement cases are private between your creditor and your debt relief lawyer. The two parties will attempt to negotiate a fair settlement to your debt. However, this does still show up on your credit report, and it does not include the automatic stay, meaning your creditor can keep trying to collect payments from you during the proceedings. This process can take one to two years (or sometimes longer) to complete.
In both bankruptcy and debt settlement, it’s essential to have a qualified lawyer to represent you.
When You Need a Debt Relief Lawyer
A debt relief lawyer isn’t necessary in all cases of debt, especially if you can make the payments and pay down the amount you owe.
However, if you’re drowning in unsecured debt, then it can make sense to hire an attorney. Some situations where it can make sense to pursue debt settlement are:
- You owe large sums of unsecured debt that cannot afford to pay back. If you owe more than $10,000 in credit card or medical bills, or student loans, debt settlement can be necessary.
- You can’t make the minimum payments. To avoid penalties and fees, and even more debt, you may need legal help to reduce your debt and make it more affordable to pay off.
- You received notice of a debt collection lawsuit. If your collectors are taking legal action against you, you need to hire an attorney to help you sort through your options and negotiate with the creditor on your behalf.
- You want to avoid bankruptcy. If you know you would benefit from reducing your debt, but you don’t want to file for bankruptcy, then debt relief can be a good option. An attorney can help you weigh the pros and cons between bankruptcy and a debt settlement and make the right choice for your situation.
When considering debt relief, talk to a qualified attorney who can review your debt and help you find the best path forward.
Let Us Help You
If you’re considering a debt settlement or bankruptcy, let our lawyers at The Law Offices of Alexzander C.J. Adams, P.C. help. We work for you, the people, and not institutions. Contact us for a free case evaluation, or no-obligation consultation. We are dedicated to helping you overcome this small bump in the road and assisting you to get on with your life.
