A debt settlement attorney is a person specialized in negotiating with the creditors to minimize the debt amount a person owes. It’s certainly advantageous to hire a settlement attorney, as he or she is capable of working out a better deal with your creditors than you can. A debt settlement attorney contacts your credit card companies and collection agencies and makes sure they all contact the attorney instead of the debtor. A debt settlement attorney plays a very major role in restoring the consumer’s credit rating and also creates a plan for your secure financial future. He obtains the consumer’s credit reports and works hard to remove any improper, erroneous, or deceptive points.
Debt settlement differs significantly from credit counseling. Hiring an attorney to settle your debts may be perilous to your credit. But if your credit is already spoiled you have little to lose. Further, debt settlement is much more effective than credit counseling and can wipe out your debt in less time. But, it’s always advisable to go for a debt settlement attorney if you owe hundreds and thousands of dollars. For smaller amounts, try to settle the amounts on your own.
Where a debt settlement attorney is applicable?
Keep in mind that there are two kinds of debt, secured debt and unsecured debt. Things like mortgages, car loans, student loans and child support fall into the secured category, as in secured debt there is always an assurance of some type of property. Unsecured debt includes medical bills, credit card bills, tax payments and back child support. Now, a debt settlement attorney generally deals with unsecured debts, as there is no risk of getting your properties ceased if the payments are not made.
Your debt settlement attorney is not bound by any time span.
Remember, debt settlement and negotiations take time. You cannot ask your settlement attorney to complete the procedure within a certain time. Sometimes in a debt settlement the creditor agrees to reduce your debt up to 40% of the total amount. They prefer such settlements than the debtor file bankruptcy. The settlement is reported as “paid as agreed,” “settled,” or “settled as agreed.” But if a creditor doesn’t mark the debt as “paid as agreed,” it may have a negative effect on the consumer’s credit history.
Finally, hiring a settlement attorney is a major decision and can cost you a lot of money. So, it’s advisable to comprehensively hire an attorney. There is an interesting fact that if you neglect the debt long enough, you have a good chance of never hearing about the creditor again. Seven years after the debt is written off, the negative listing vanishes from your report altogether. But, this mustn’t be a good alternative.