Pago de la Deuda

Debt Settlement, is it Right for You?

Before deciding to file for bankruptcy, it is a good idea to see if you can solve your financial burden with debt settlement. So, what is debt settlement, when should debt settlement be considered over bankruptcy, and how can a debt settlement attorney help? By the time you are done reading this page you will better understand debt settlement and see how a debt settlement attorney can help.

What is Debt Settlement

Debt settlement is a negotiation with your creditors to settle your debts for less than you owe. Debt settlement should not be confused with debt consolidation. In debt consolidation, you pay a consolidator who takes out a fee then passes the rest on to your creditors. With debt consolidation your creditors still receive payments each month. In debt settlement, monthly payments are made; the fee for handling the debt settlement is taken out, and then the remainder is put into a trust. Once the creditor agrees to settle they get paid from the trust.

When is Debt Settlement Better than Bankruptcy

Debt settlement is best if you are not in danger of losing your assets for nonpayment. Those pesky little debts that are just hanging around from your past that you would like to clear up. Often these types of debt have been outstanding for so long; companies have charged them off, and are happy to settle for less just to get something extra for the debt.

Sometimes choosing debt settlement over bankruptcy can make it easier to rebuild your credit. Beware of anyone who tells you debt settlement will improve your credit score. The truth is your credit score was damaged when the debt became delinquent. It will take time to rebuild no matter if you choose debt settlement or bankruptcy. If you are not in danger of losing your house or car, debt settlement can be a great option for settling debt. It is important though not to try debt settlement on your own.

How a debt Settlement Attorney Can Help

Most people hate to negotiate. A debt settlement attorney negotiates with creditors on your behalf. This can result in lower settlements.

Regardless of how helpful your creditors seem when you call to negotiate they only have their best interest in mind. A debt settlement attorney will look out for your interests. Debt settlement attorneys are also able to prevent creditors from contacting you by sending out “Cease and desist” letters on your behalf. It is a great feeling not having creditors harassing you every day.

Hopefully you now have a good understanding of what debt settlement is, when it could be better than bankruptcy, and how a debt settlement attorney can help it is still important to contact a debt settlement attorney to discuss your situation.

Here at Stephen H. Kim Attorney at Law we can answer all your questions about debt settlement and consumer bankruptcy law. Contact us right away so we can help you stop harassing calls and see if debt settlement is the right choice for you.