Can This Type of Debt Get Settled? Questions About Common Kinds of Consumer Debt

Consumer debt is a heavy weight for many residents of Lilburn and throughout the state of Georgia. For some debtors, debt settlement might be the best option for getting out of debt. How does debt settlement work? In short, the debtor works with a debt settlement lawyer to negotiate a payoff amount with the creditor. That payoff amount is usually a lump-sum, up-front payment. That amount is also for just a percentage of the total debt that the debtor owes. For example, if you $25,000, a creditor might agree to a settlement of $15,000, or sometimes even less, to settle the debt. Once the debtor pays the agreed amount, the creditor forgives the remaining debt. At this point, the debtor no longer owes anything to the creditor.

But not all types of debt are necessarily eligible for debt settlement. The following are among the most common types of consumer debt, according to Equifax and Experian, two of the major creditor reporting bureaus. Our debt settlement lawyers in Georgia explain whether each type of debt can typically be settled or not.

Credit Card Debt

Credit card debt is a form of unsecured debt, which means that there is no collateral associated with the debt. Most types of unsecured debt can be settled, including credit card debt. Credit card debt is among the most frequently settled forms of debt.

Personal Loan Debt

Whether you took out a personal loan for a home repair or to consolidate debt, this is another type of unsecured debt. Like credit card debt, personal loan debt can often be settled.

Medical Debt

Medical debt is also a form of unsecured debt. It is one of the largest debt burdens for Americans, and it is not a type of debt that most people can plan ahead for since it usually results from emergencies or unexpected health events. However, like credit card debt and personal loan debt, it can be settled.

Student Loans

Student loan debt, whether through a private or government lender, is also unsecured debt. Private student loan debt can be settled. It may be possible to settle federal student loan debt in some circumstances, but this tends to be more complicated.

Mortgage or Home Loan

Mortgage debt, or your home loan, is a form of secured debt. The house (or townhouse or condo) serves as collateral. This type of debt usually cannot be settled. Instead, if you cannot pay, the servicer will usually begin foreclosure proceedings.

Motor Vehicle Debt

Like mortgage debt, motor vehicle debt is secured debt and cannot typically be settled.

Contact Our Lilburn, Georgia Debt Settlement Attorney Today for Assistance

If you are struggling to repay debt and believe you are in a position to offer a lump sum payment to a creditor, you may be able to settle your debt. Debt can often be settled for a percentage of the amount the debtor owes. In exchange for the lump sum payment, the creditor agrees to forgive your remaining debt, as we discussed above. However, as you can see from our discussion of the different kinds of common consumer debt, you should only expect that unsecured debt can be settled. For secured debt, the lender will repossess the collateral rather than trying to recover the amount of money you owe. To find out more about debt settlement for your unsecured consumer debts in Georgia, an experienced Lilburn, Georgia debt settlement lawyer at Konn Law Firm LLC can help. Contact our firm today for assistance.

Source:

equifax.com/personal/education/debt-management/articles/-/learn/types-of-consumer-debts/