Debt Settlement Lawyers negotiate a reduced payment amount for you and you make payments into a special trust account until an agreeable figure is reached, usually 50% of the amount owed.
A successful Debt Settlement Plan will include a reduced payment amount to satisfy the debt, and include what will be reported to the credit bureau once the debt is settled or paid in full. In addition, the creditor may agree not to pursue legal action against you or not send you a 1099 tax form at the end of the year for any unpaid balance.
Do I qualify for a Debt Settlement Plan? Living paycheck to paycheck is no fun, especially when you have credit card bills and other debts to pay. When you are having trouble managing your credit, it may be time for a REALITY CHECK. Before you choose credit counseling, there are several factors to consider.
Add up all your monthly income and add up all your monthly expenses to see if there is enough money at the end of the month. If not, you have two choices: 1. Increase income, or 2. Reduce expenses. Reduce Expense Option: When you do the math and find out there is not enough money at the end of the month to pay your living expenses (food, rent, medical, etc.), and barely enough money to pay your debts it may be time to enroll in a Debt Settlement Plan.
Debt Settlement Plan A Debt Settlement Plan is the last option before filing bankruptcy and is intended for consumers that can no longer make the minimum payments on their unsecured debts, but can afford something less and want to avoid bankruptcy. Usually the consumer has defaulted (not made payments) in their debts.
Debt Settlement Plans allow you to pay what you can afford each month and nothing more. Debt Settlement is usually proposed by creditors after you have defaulted on your debts. As an example: let’s say you have not paid your credit card in three months, the credit card companies may offer to settle your account for 50% less if you pay the balance off in two, six, or twelve installments.
In most all cases, unsecured debts will be accepted. Unsecured debts are debts that are not secured by an asset. The most common types of unsecured debts are credit cards, store cards, medical bills and most debts in collections.
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Disclaimer Legal Information Is Not Legal Advice This site provides information about the law designed to help users safely cope with their own legal needs. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.
Consumer Credit Counseling Information, Debt Management Plan Information, Debt Settlement Plan information, Credit Counseling, Credit Score, Consumer Credit Counseling Service, CCCS, Bill Consolidation, Credit Repair, and Debt Consolidation is not advice, and we recommend you consult a licensed credit counseling agency, debt settlement attorney, and/or licensed debt management plan administrator in your state if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.
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