Do You Need a Debt Settlement Attorney?Posted on September 14th, 2010 William No comments
If you've decided to try debt negotiation, one big question remains: should you attempt to handle it yourself, or hire a debt settlement attorney? And if you do hire one, exactly what will he do for you?
A debt settlement attorney will negotiate with creditors on your behalf. Naturally, this will be more expensive than doing it yourself, but can be a lifesaver for people who need debt relief but are unable or unwilling to negotiate with creditors themselves. Being in debt and negotiating are both very stressful, so having a professional handle it can take a lot off your plate; additionally, a professional will have a better idea of exactly how much leeway the representative for the lender has in forgiving your debt.
If you've decided to hire an attorney, be sure to take the time to find a good one. You want someone who is licensed in your state and has experience with debt reduction; specifically, you want someone who specializes in debt settlement rather than just any attorney. Also, you need to be clear on exactly what your attorney can do for you. He may be able to reduce the amount you need to pay on credit cards, medical bills, and other unsecured loans and lines of credit. However, he will not be able to settle secured loans (including car loans and mortgages), student loans, or anything owed to the IRS.
You should realize that settling your debts is likely to have a negative effect on your credit score, although not so much as not paying at all! These days, many companies will, at best, report your account as "settled" rather than "paid as agreed". If you hire a debt settlement attorney, one of the things you should have him negotiate is removal of negative information from your credit report; the creditor may be willing to do so in order to get paid, as they're in business to make money, not to ruin your credit! Remember, if they won't work with you and you end up having to file for bankruptcy, they're likely to get nothing. Also, because you'll generally need to stop making payments while negotiating, your credit will continue to deteriorate, and it's unlikely you'll be able to have these late payments removed.