What to do Before Bankruptcy

I can help bring your creditors to the negotiating table to reduce your debt burden in a debt settlement. Debt settlement is a negotiation between lenders and borrowers, so that both sides can benefit. Lenders typically retain a greater portion of the total deficit owed to them, and borrowers avoid bankruptcy and often recover more quickly from their financial duress.

Debt Settlement in Four Steps

First, you need to have a history of defaulting on a debt or falling behind on payments. If you are paying in a timely manner, there is no incentive for a firm to accept less than the full amount. The amount of money the company is willing to discharge increases as you fall farther behind. After counseling with a professional attorney, you present a settlement offer to the lender. Once a settlement agreement is reached, you are expected to pay the agreed amount either as a lump sum or as installments.

Is Debt Settlement the Right Choice?

Debt settlement is an option if you are in default with a small number of lenders. If more lenders are involved, then coordinating the settlement can become extremely complex – too complex to warrant negotiation. In these cases, Bankruptcy might be a more effective action.

Your financial position determines whether debt settlement will be the best way to regain financial stability. Although many lenders will allow you to pay off the debt over time, they prefer shorter agreements or a single, lump sum payment. Installment agreements do not typically run longer than 18 months.

How Much Will I Need to Pay, and When?

Debt settlement is much less structured than bankruptcy. Instead of dealing with a court of law, you are negotiating with private lenders. Every company is different. Some are willing to negotiate, and some are less flexible. Lump sum agreements give you the maximum amount of leverage, and the longer the installment plan, the less likely the lender will be to accept the settlement offer.

We also use the length of the default to determine how much debt a company will discharge. Once a loan is more than 6 months in default, lenders may sell the loan to third-party debt collectors. These companies are more persistent in collection attempts, and may be willing to give you a better deal on your debt.

Call me at (215) 854-6342 to determine whether debt settlement is your best option for debt relief. I want to help you regain control of your finances in the quickest, most cost-effective way possible.