Debt Settlement
Debt settlement is a relatively new and effective form of debt relief. Debt settlement is a legal process of debt reduction in which the creditor and debtor agree on a reduced balance that, once settled, will be regarded as a payment in full. Debt settlement is less costly and much faster than other forms of debt relief. Also, because debt settlement does not require a valuable asset such as a home as a collateral, debt settlement by debt settlement attorneys is rapidly becoming the number one form of debt relief.
Since 2007, the number of debt settlement attorneys throughout the United States has more than doubled. The explanation for this is simple: as economic times become tougher, more and more consumers are turning to debt settlement attorneys for debt settlement. Debt settlement attorneys typically achieve better and faster results than debtors could themselves, and because consumer debt laws vary from state to state, debt settlement attorneys are an essential part of the debt settlement process for many debtors.
Debt Settlement Process
Initiating the Debt Settlement Process
If you decide debt settlement is the best option for you, it is in your best interest to consider a number of debt settlement attorneys before retaining one. Make sure your debt settlement attorney has the experience necessary to achieve debt settlement for you.
When you start the process of debt settlement with your debt settlement attorney, the debt settlement attorney will initially instruct you to stop all payments to your creditors. The explanation for this is that creditors usually only negotiate with your debt settlement attorney if no funds are being received. In the meantime, your debt settlement attorney will help you set up a fund in which you will deposit money designated to pay off the debts once debt settlement is negotiated.
Negotiating Debt Settlement
During the negotiation process, your debt settlement attorney will conduct all contact with the creditors for you. If creditors harass you or do anything illegal, your debt settlement attorney will take the appropriate legal action to protect you.
Results & Timeline
Usually debt settlement negotiations result in a fifty to seventy percent reduction of the debtor's balance. Your debt settlement attorney will explain all the stipulations to you so you understand exactly what the conditions of your debt settlement are. If all goes well and you remain current with your payments, you can be out of debt in eighteen months. Usually debt settlement attorneys negotiate a time period between one and three years, depending on the debtor's situation. When all payments have been made the debt is considered paid in full.
Debt Settlement & Credit Report
Debt settlement attorneys are also responsible for ensuring that the debtor's credit reports do not contain any unsubstantiated or misleading comments. After debt settlement has been achieved, experiences debt settlement attorneys will request a copy of the debtor's credit report to check that it is clean. If creditors have omitted to remove misleading comments, debt settlement attorneys typically instruct creditors to rectify the situation so the debtor can start rebuilding his credit.