Should I Attempt to Settle My Debts With My Creditors?
Should you decide not to file bankruptcy, you can hire our firm to negotiate a settlement with your creditors. You must have some funds available to pay off the settled amount to your creditors over time (usually 3-5 years) or be able to pay lump sum payments to each creditor that we settle with.
Do not waste your money if you are not diligent and self-disciplined about saving and paying off debt. It has been our experience that unless you are able to save and pay off the creditor over time for the settled amount or able to pay lump sum payments on the settled amount, it may not be beneficial to settle your debts. You must be realistic and also consider whether you can afford to make the negotiated payments. Otherwise you may be forestalling the inevitable and have to file bankruptcy anyway after you have paid this money to creditors when you could have filed bankruptcy and been on your way to a fresh start.
Settling Mortgage Debt
Most of the time, we have been able to settle foreclosed home mortgage loans for 10% or less of the amount owed. This, however, depends on the mortgage company; credit unions are usually more difficult to negotiate with. If you put less than 20% down and had had private mortgage insurance (PMI), then you may also have to settle with the private mortgage insurer as well. Private mortgage insurance companies are more likely to sue. If you get sued, you will probably also have to pay a higher settlement amount because now the mortgage lender has had to hire an attorney, and pay attorney fees and court costs. Click here to see the settlements we have done in the past.
Settling Credit Card Debt
We can usually settle credit card debt for 25-50% of the debt. This also depends on which company, if you recently took out a cash advance, how old the debt is, etc.
In addition, please be reminded that you may be taxed (issued a 1099-c) for any debt forgiven by your creditors. A good accountant will probably be able to minimize or eliminate the tax you will have to pay, but it depends on your assets and liabilities. Click here to see the settlements we have done in the past.
Why Should You Settle Your Debts?
Credit card companies have 6 years from the last inquiry or contact to sue you for the debt. If they sue you within that time and obtain a judgment from the court, they then can collect from you forever as that judgment is renewable every 6 years. They can garnish your wages, lien your property, and also tap your bank accounts and remove all the funds in your account.
So you should at least take care of your debt (by filing bankruptcy or settling your debt) sooner rather than later. It is better to get peace of mind and move on with your life, and not have to worry that they will sue you at some point for the debt plus attorney’s fees and court costs, late fees, and interest. That way you can get on with your life rather than worry about the creditor obtaining a judgment and garnishing your wages, tapping your bank accounts, and putting liens on your property.
Call us to set up a debt re-payment plan that is right for you.
Please feel free to contact us today so that we may discuss the options that are available to you.
Van and Associates Law Firm at 702-529-1011