Common Steps in a Debt Settlement Process
What should you expect in the debt settlement negotiation process? Debt settlement involves negotiating with one or more creditors to reach an agreement in which the debtor pays a portion of their debt and the debtors forgives the remaining amount. Typically, creditors are most willing to consider debt settlement offers when the debtor is delinquent and the creditor does not anticipate receiving full payment for the debt owed. Debt settlement can be extremely beneficial to debtors who have the ability to repay a portion of what they owe but not all of it. By settling debt, a debtor can avoid bankruptcy and can begin to rebuild their finances.
If you are a good candidate for debt settlement, it is important to learn more about the overall process. What should you expect once you decide to move forward with debt settlement? The following are common steps in the debt settlement process.
Making Sure You Owe the Debt First
According to the Consumer Financial Protection Bureau (CFPB), the first step in the debt settlement process should be to make certain that you actually owe the debt you are hoping to settle. If you are being contacted by a creditor or debt collector over a particular debt, you should always obtain all of the information about the debt to make sure it is something you are actually liable for. In some cases, you may not owe the debt at all (i.e., there may be a mistake). In other situations, the statute of limitations on the debt may have passed. If that is the case, you might want to reconsider whether to settle the debt.
Figuring Out How Much You Can Afford to Pay the Creditor
Next, you will need to determine how much you can afford to offer the creditor in order to settle the debt. This step will involve assessing your finances carefully. A lawyer can help. You will want to determine a dollar amount you can pay, rather than a percentage of the debt.
Having Your Lawyer Negotiate with the Creditor on Your Behalf
Once you know what you can pay, your lawyer can begin negotiating with the creditor. Once your lawyer negotiates the creditor down to an amount that may be reasonable for you, you can accept the agreement.
Entering Into a Debt Settlement Agreement with the Creditor
Next, you will enter into a contract with the creditor to settle the debt you owe.
Making Your Payment and Having Your Remaining Debt Forgiven
Finally, you will make the agreed-upon payment, and in exchange the creditor will forgive the remaining amount of debt you owe.
Contact a Lilburn Debt Settlement Lawyer Today for Help
If you have any questions about debt settlement, including whether this is the right option for you or how you can prepare, an experienced Georgia debt settlement attorney at Konn Law Firm LLC can assist you. We can provide you with more information about debt settlement broadly. We can also negotiate with your creditors on your behalf to help you reach a debt settlement agreement that works with your financial circumstances. Contact us today to find out more about the services we provide in the Lilburn area.
Sources:
consumerfinance.gov/ask-cfpb/how-do-i-negotiate-a-settlement-with-a-debt-collector-en-1447
