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The Layman’s Guide to Debt Settlement Lawyers
Wondering what a debt settlement lawyer is and how they differ form bankruptcy attorneys? Well, I am going to tell you. There are subtle differences and it is not uncommon for one attorney to handle both. Debt settelment lawyers are most often hired by clients that have more then $25,000 or more in unsecured debt. Often people of higher incomes that have savings accounts or investments that they could tap to pay off this debt, instead retain an attorney to help them with their problem. Regardless of your income you can hire a debt settlement attorney. Keep in mind though, it doesn’t make much sense for you to hire a debt settlement attorney if the debt you have is small and your income is small. Further, if you only need to spread payments out to 36 months or more you don’t want to hire an attorney then either. Debt settlement attorneys want payments to be taken care of within 24 months. The advantage to having a debt settlement lawyer is that you hope he knows the law well enough that he can really press hard and get a more tolerable settlement then you would. The most appropriate time to retain an attorney is when you are faced with the possibility of bankruptcy. Before you hire an attorney check them out with the Better Business Bureau, we want to believe that lawyers are in business to help their clients, but not all of them are. You want an attorney that is successful in financial matters. In most cases debt settlement lawyers compensation is based on the amount of money they save their clients. Let’s say that they tell you their fee will be 22% of what ever money they saved you. In most cases if the attorney was not able to save you at least 30% then they will waive their fees. As I said earlier, often debt settlement attorneys handle bankruptcy as well. You may have one of those attorneys and they may guide you in that direction. You are the only one that truly knows what the best situation for you is. It is you after all that will have to live with the decision that you make and the terms you agree to. An attorney that is working for you and trying to help you isn’t going to force a decision on you. Another option with the debt settlement attorney is that he may be able to negotiate a lump sum settlement with your creditors. If this is done and the client is able to come up with the lump sum they can be given nine to twenty four months to pay that lump sum off. The amount that the attorney is going to charge is then added to that lump sum. Bankruptcy attorneys do not negotiate with your creditors. A bankruptcy is a legal proceeding that is done in court. Where as the debt settlement is done out of court and is done voluntarily by all parties. Bankruptcy can stay on your credit report for up to ten years and a debt settlement can stay on your credit report for seven years. Both situations have an adverse effect on your credit. But if you are sitting here trying to figure out which is better, your credit is probably already in jeopardy. Now it is time to get it back on track.
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