Debt Settlement and Bankruptcy

: Chris Lee Law Firm

  Filed under: Debt

debt settlementWith the increase in consumer debt comes agencies offering to “help.” Debt settlement and debt negotiation firms are aggressively marketed toward the consumer.

Some agencies promise to make your debt problems go away. When this doesn’t happen, the client finds themselves worse than before they signed up with one of these agencies. Often they are left facing legal action by their creditors for nonpayment.

Unsecured Creditors

Your unsecured creditors, like credit card debt and personal loans, know that you can stop payments or file bankruptcy if you get behind. When you file bankruptcy the unsecured lender will likely not receive any more payments from you.

If you are behind in only one or two accounts, you may want to contact the lenders directly instead of going through a debt settlement agency. Sometimes you can negotiate directly with your creditor to have the late fees removed, or they may accept a lump-sum payment for less than the total amount due and the debt will be considered paid in full.

If you fall behind in your secured debts, like your home or your vehicle, chances are the lenders will not be willing to settle for less than you owe.

Credit Rating

When you hire a debt settlement agency, you still have to make your payments, the agency can not eliminate your debt. The agency also cannot improve your credit rating, your credit report will still reflect the previous late and missed payments.

If you are worried about losing your home, or you are hopelessly behind in your debt and don’t see how you can catch up, contact a Dallas bankruptcy attorney. Find out how you can get a fresh financial start by eliminating all of your qualifying debt without making any more payments.

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