Are you no longer able to afford to pay some of or all your debts or make minimum payments on your accounts?
One option for resolving extensive debts involves negotiating a debt settlement with a lender or collection agency.
A debt settlement attorney in Fort Lauderdale can help you negotiate an agreement or arrangement with your creditors that enables you to resolve overwhelming debts, such as credit card debt, medical debt, tax debt, or other unpaid loans.
Understanding what an experienced debt settlement lawyer can do for you and what to expect when retaining one to settle debts can help you pursue a favorable resolution to your financial troubles.
Initial Consultation: Your First Meeting with a Debt Settlement Lawyer
Most debt settlement attorneys offer free consultations to discuss your situation and provide preliminary advice on your legal options. During the initial consultation, you can also ask the attorney questions to help you determine whether you should hire the lawyer to help with your case.
You can better ensure a productive initial consultation by bringing relevant documents to the meeting, including copies of loan agreements, account statements, unpaid medical bills, debt collection lawsuits, and correspondence from the creditor or debt collector company. The attorney can review these documents to gain a better understanding of the details of your case and your current financial situation. Consider bringing a copy of your monthly budget to help the attorney understand your income and other regular expenses.
At the consultation, you might ask the attorney questions about your case and the lawyer’s services, such as:
- How long the attorney has practiced law and debt relief/bankruptcy law
- Whether the attorney has handled cases similar to yours
- The attorney’s success rate in negotiating debt settlements
- Whether the attorney has past clients who can offer testimonials
- How the attorney intends to communicate with you during your case, and how quickly they respond to emails or phone calls
- How the attorney structures their fees
How a Lawyer Differs from a Debt Settlement Company
You may have seen advertisements from debt settlement companies offering to eliminate your debts to creditors or debt collection agencies for a fee. A debt settlement company pays off a consumer’s debts using money the consumer saves up in a settlement account. By law, an independent party must administer this account, with the funds in the account remaining under the consumer’s ownership and control. Although a consumer should have the right to withdraw funds from their account without penalty, some debt settlement companies take a part of the account funds as their service fee.
Debt settlement companies differ from debt relief attorneys in several ways. First, many lenders will not negotiate with debt settlement companies. Conversely, when you retain a Fort Lauderdale debt lawyer and advise a lender or debt collector that you have legal representation, the lender or debt collector must communicate with your lawyer rather than trying to contact you directly. Many debt settlement companies do not have attorneys on staff. As a result, these companies cannot offer legal advice, unlike a debt relief lawyer.
Furthermore, should you need to go to court to resolve a debt account, a debt settlement company cannot represent you in court like a debt relief lawyer can. Many debt relief lawyers also handle bankruptcies as part of their practice, allowing you to stick with your attorney to pursue other legal avenues, like bankruptcy, should debt negotiations fail.
Understanding the Debt Settlement Timeline
The timeline of a debt settlement begins when you stop making payments on a debt or inform the creditor that you can no longer afford payments. When you stop making monthly payments, such as credit card payments or mortgage payments, it may take several months before a creditor contacts you to declare you in default and offer debt settlement options, or sell your debt to a collection agency. When your debt ends up with a collection agency, it can take a few more months for the debt collector to extend a fair settlement offer.
When you decide to negotiate a settlement with a lender or debt collector, it can take you or your attorney several weeks to several months reach a final settlement agreement, depending on factors such as the lender’s or collection agency’s responsiveness and whether you decide to take your case to court, such as when a lender or debt collector violates state or federal consumer protection laws.
Negotiating with Creditors: The Legal Strategy for Debt Reduction
Negotiating debt resolution with creditors begins by confirming whether you owe the debt claimed by the creditor and the current balance of the debt. When you receive confirmation of the debt, you and your attorney can review your financial circumstances to determine how much you can afford to pay toward your debt. Depending on your financial resources and disposable income, you might propose a payment plan to pay off the debt over time or a lump-sum payment that pays off a percentage of the balance, with the lender agreeing to forgive the remaining balance. However, debt settlements can have financial consequences or effects on your credit, making it essential to obtain legal advice and guidance when negotiating a settlement.
The Costs and Fees of Debt Settlement with a Law Firm
The costs of retaining a law firm to assist with debt settlement can depend on various factors. Some law firms may handle simpler debt settlement cases for a flat fee, while others may work on an hourly fee basis. A firm’s fee can vary based on the geographic market where it practices, the level of resources provided, and the firm’s experience and reputation. The costs of legal counsel for debt settlement can also depend on the complexity of your case, including the number of creditors you owe money to and whether your situation involves unique intricacies.
Protecting Your Rights: Why Legal Representation Is Crucial
Many lenders and debt collection agencies may not take a flexible approach to negotiating debt resolutions with creditors. Instead, many companies have standard policies for the amount of loan principal they will forgive or the repayment terms they will offer when negotiating directly with creditors. However, an experienced debt relief lawyer who understands lenders’ and debt collectors’ policies can negotiate on your behalf to pursue a settlement better tailored to your financial situation.
Contact Our Debt Settlement Attorneys Today
If you’re considering trying to negotiate a settlement with credit card companies, mortgage lenders, or other creditors, hiring experienced legal counsel can help you secure a favorable resolution to your debt problems. Contact Loan Lawyers today for a free, confidential consultation with a debt relief lawyer in Fort Lauderdale to learn how our Loan Lawyers can help you negotiate a debt settlement with creditors that enables you to get back on track toward financial health.
- About the Author
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Matis Abarbanel is the founding partner and senior attorney at Loan Lawyers in South Florida. He focuses his practice on consumer rights, helping homeowners navigate issues such as foreclosure and financial hardship. Matis also brings a wealth of experience from his previous work in personal injury law. As a devout Chasidic Jew, he is committed to making a positive impact in his community and dedicates his efforts to charitable initiatives through his non-profit organization, The Center, which aids at-risk Jewish youth. Matis actively serves clients across South Florida and is passionate about empowering individuals to secure their rights and achieve a better future.
