What Amount of Debt is Too Much to Settle?
Are you struggling to repay your debt and considering debt relief options? Is debt settlement one of the options you are considering? If so, you may be wondering about the amount of debt you owe and whether it is possible to settle it. More specifically, you might want to know if there is a ceiling on the amount of debt that can be settled. In other words, is some amount of debt too much to try to settle? There is no rule for the amount of debt that can be settled. Likewise, there is no rule or law that says what percentage of a person’s total debt a creditor can accept in a debt settlement agreement. At the same time, however, a report from CBS clarifies that it might be more difficult to settle your debt when it is quite high.
When does debt become high enough that it makes debt settlement more difficult or complicated? Consider the following information from our Georgia debt settlement lawyers who serve clients in the Lilburn area.
Learning More About How Debt Settlement Works
To understand how the amount of debt you owe might impact your settlement negotiations or options, it is important to learn more about how debt settlement works.
Debt settlement begins with a debtor’s lawyer negotiating with the debtor’s creditor or creditors. That negotiation involves the lawyer asking the creditor to accept a payment from the debtor for a percentage of the total debt owed. Typically, this is paid in a lump-sum payment. For example, you might owe $20,000, and your lawyer might negotiate a settlement agreement with the creditor for you to pay $12,000. In exchange for your lump-sum payment, the creditor forgives the remaining debt (in this example, $8,000 would be forgiven).
Do You Have Too Much Debt to Settle It?
Can you have too much debt for a creditor to consider a settlement offer? According to CBS, there is “no hard cap on the amount of credit card debt” or other forms of debt that can be settled. However, owing larger amounts, and to multiple creditors, can make debt settlement more difficult or complicated. As the CBS report says, that threshold is typically around $100,000.
Why would more debt complicate settlement negotiations? There are a couple of reasons. First, you will need to be able to pay the agreed-upon settlement amount. When that settlement amount is $50,000 or more, it can be difficult to come up with that amount of cash in a relatively short amount of time. In addition, when a debtor owes more, it might be worth it for the creditor to take legal action in an attempt to recover all — or at least more — of what they owe. Yet even when your debt is at high levels, settlement certainly is not impossible.
Contact a Lilburn Debt Settlement Attorney Today for Assistance Negotiating a Debt Settlement Agreement
No matter how much debt you owe to a single creditor, debt settlement could be a debt relief option for you. The best way to determine whether or not debt settlement can work for you is to seek legal advice about your particular circumstances. An experienced Georgia debt settlement attorney at Konn Law Firm LLC can talk to you today to find out more about your financial situation, including the amount of debt you owe and the accompanying details about your creditors. Once we have more information, we can discuss your options with you for negotiating a debt settlement agreement and getting out of debt. Contact us today to find out more about how we help debtors with credit card debt and other forms of debt in the Lilburn area.
Source:
cbsnews.com/news/how-much-credit-card-debt-is-too-much-for-debt-settlement/
