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- What is Debt Settlement?
- What is Attorney Debt Settlement?
- What is Debt Consolidation?
- What are the Big Issues with Debt Settlement?
- What is the Downside or Disadvantage of Debt Consolidation?
- What Happens if I get Sued in the Middle of Debt Settlement?
- Can I have my Creditors Call Cohen & Cohen, P.C.?
- I Don’t have Enough Right Now for Debt Settlement. What can I do?
- How Much Money do I have to bring to the table?
- How Much does Debt Settlement Cost?
- What happens if not all of my Debts can be Settled?
- How does Attorney Debt Settlement affect my Credit?
- Debt Settlement vs. Bankruptcy?
- How much can I Settle my debt for?
- What happens if I get Sued after the Debt is Settled?
- How long does it take to Settle my Debts?
Contents
- What is Debt Settlement?
- What is Attorney Debt Settlement?
- What is Debt Consolidation?
- What are the Big Issues with Debt Settlement?
- What is the Downside or Disadvantage of Debt Consolidation?
- What Happens if I get Sued in the Middle of Debt Settlement?
- Can I have my Creditors Call Cohen & Cohen, P.C.?
- I Don’t have Enough Right Now for Debt Settlement. What can I do?
- How Much Money do I have to bring to the table?
- How Much does Debt Settlement Cost?
- What happens if not all of my Debts can be Settled?
- How does Attorney Debt Settlement affect my Credit?
- Debt Settlement vs. Bankruptcy?
- How much can I Settle my debt for?
- What happens if I get Sued after the Debt is Settled?
- How long does it take to Settle my Debts?
What is Debt Settlement?
Debt Settlement is the process of settling debts for a specified amount either to be paid in one lump sum or a short series of installments. Debt settlement is different from debt consolidation.
What is Attorney Debt Settlement?
The basics are the same as to regular debt settlement. However with attorney debt settlement the client gets all of the extra benefits that come with having an attorney on board. Attorney debt settlement will provide the client with legal advice, be able to assist the client in legal matters such as pre-bankruptcy planning, litigation assistance or negotiations, in addition to bringing the clout and experience only an attorney can offer.
What is Debt Consolidation?
The basics are the same as to regular debt settlement. However with attorney debt settlement the client gets all of the extra benefits that come with having an attorney on board. Attorney debt settlement will provide the client with legal advice, be able to assist the client in legal matters such as pre-bankruptcy planning, litigation assistance or negotiations, in addition to bringing the clout and experience only an attorney can offer.
What are the Big Issues with Debt Settlement?
There are a few big issues with debt settlement. The first being that there is nothing preventing the creditor from suing you. After all it is a contract. The lawsuit is simple, breach of contract. Although these are generally threats because it doesn’t make a whole lot of financial sense to sue when debt settlement is an option (remember, “a bird in the hand is better than two in the bush”), this is one area which we are able to assist our clients. Although not a part of our routine attorney debt settlement services, we may represent the client in the lawsuit and continue our debt settlement efforts. Oftentimes there are many defenses that the lay person simply is not aware of which can make or break the case. In any event, there is always an attorney at Cohen & Cohen, P.C., available to meet with our clients to, at minimum, assess the situation and provide legal advice.
The second main issue are the tax implications. Debt forgiveness or cancellation sometimes requires the lender to report the forgiven or cancelled amount to the IRS as a 1099-C. This means that the forgiven amount is counted as taxable income which obviously is not necessarily a good thing. There are some exceptions to this, but those would need to be explored further based on the particular facts and circumstances and maybe even the advice of a tax attorney or accountant.
The third issue worth mentioning here is the fact that some of these lenders will actually not cancel the debt at all despite your agreement! This doesn’t happen as much as it used to but it still does happen. Why, you might ask. The answer to that is beyond the scope of this section but it is important to understand the vast credit machine that exists. If you take the time to do independent research you will quickly learn that there is typically a complicated web of companies involved in debt collection. Everyone is getting a piece of the pie. Debts are sold in batches, sometimes in the amounts of millions of dollars, and as a consequence sometimes mistakes are made. This is one of the primary reasons why attorney debt settlement is preferable as we work to prevent this from happening from the beginning.
What is the Downside or Disadvantage of Debt Consolidation?
Oftentimes you cannot include certain types of debts in debt consolidation such as medical bills. Plus to if the debt has gone to third party collection agency then they are less likely to accept a debt consolidation plan and would rather have a lump sum payment. Besides the relief you receive is generally minimal when compared to the other options such as debt settlement or bankruptcy. Also, it is important to note that a large portion of these so called debt consolidation outfits or credit counseling firms are just subsidiaries of credit card companies anyway.
What Happens if I get Sued in the Middle of Debt Settlement?
Call us. We will review the paperwork and discuss the case with you, answer your questions, and provide you with legal advice on your options. Generally speaking, depending on how aggressive you are, you can pay it, litigate it (you might have some colorable counterclaims), or continue to work on settlement in the litigation process, or even let judgment enter and continue negotiations (this latter option is risky and is only appropriate action upon legal counsel). The bottom line is, that unlike a non attorney, non Colorado company, we won’t leave you hanging and will absolutely provide assistance even if this happens.
Can I have my Creditors Call Cohen & Cohen, P.C.?
Absolutely. Once you become a client you can send your creditors our way. Indeed, sometimes this is preferable as it facilitates the attorney debt settlement process. This is true even for our clients who haven’t yet accumulated enough in trust to begin debt settlement. We will still verify representation and likely take the load off of you.
I Don’t have Enough Right Now for Debt Settlement. What can I do?
It’s pretty rare that someone has enough money up front to settle their debts. What we do to facilitate this is set you upon a regular payment. We are available for advice and guidance throughout this process and will send you monthly statements of how much you have accumulated. ptcy with the new law. This is a myth which we hear all too often. Even if you don’t qualify for a Chapter 7, you can almost always find relief under Chapter 13 or even Chapter 11.
How Much Money do I have to bring to the table?
We can’t give a generic answer to this question. It just depends on the facts of the case. However, generally speaking we will require a certain percentage of your estimated balances prior to commencing debt settlement. This is something we will assess in the free attorney debt settlement consultation.
How Much does Debt Settlement Cost?
We charge a combined hourly rate and a percentage of the amount we settle. As discussed elsewhere we do this because if we followed the industry standard of charging only on what we save our clients then there wouldn’t be enough incentive to go the extra mile to make those tough transactions happen. If we charged only hourly then we wouldn’t have the incentive to save our clients as much as possible. By our latest industry review it appears industry standard fee is about 20-40% of the amount saved. We generally charge anywhere from 10-20% plus our hourly rate. As usual, we make sure to use paralegals where appropriate and will always keep our clients informed of the time spent.
What happens if not all of my Debts can be Settled?
This is a risk of debt settlement. Indeed it is something we explain to our clients up front. The worst thing that can happen is that we settle all of your debts and you have one obstinate creditor who will not settle. If that is the case they you need to assess your other options such as bankruptcy or payment. We always like to know if this may be the case in your situation because it doesn’t make a lot of sense to spend a bunch of time and money settling debts if it won’t be a comprehensive solution.
How does Attorney Debt Settlement affect my Credit?
It really depends. Sometimes it will disappear, usually though, it will read something to the effect of it being settled for less than the amount owing. The credit reporting agencies are always changing how they prepare credit scores, but settling debt can hurt your credit.
Debt Settlement vs. Bankruptcy?
This is often asked and the answer, again, is it depends. There are so many factors that go into this analysis it is beyond the scope of this section. This is something we explore in our free initial attorney debt settlement consultation. Bottom line, is that generally speaking bankruptcy is going to be the better financial option. But oftentimes there are reasons why bankruptcy is not a good option and thus something else needs to be done.
How much can I Settle my debt for?
It depends on a number of factors such as the type of the debt, age of the debt, and stage of collections. Generally speaking we average anywhere from 35-65% of savings. We settled debs for as low as 14% of the balance and as high as 90%. Note sometimes if litigation is warranted we will help you get the debt written off completely and sometimes even get money damages for you (though this is usually not the case). The bottom line is that it just depends. One thing to remember is that if anyone promises a certain result, they are likely full of it.
What happens if I get Sued after the Debt is Settled?
As discussed elsewhere the chances of this exist, but they are small. One main advantage of attorney debt settlement is that we will use the law and legal principles to minimize your exposure if something like this happens. We’re not going to say what exactly we do on the internet so that others can copy us, but suffice to say we will do our best to ensure that you have legal protections if this happens.
How long does it take to Settle my Debts?
Again it depends. How old is the debt? What type of debt is it? Are you being sued? Is there an upcoming court date? Do we have other timing issues such as bankruptcy eligibility? These are all questions to consider. Sometimes it is in your best interests to wait as long as possible to settle. Sometimes it needs to happen right away. Either way the attorney debt settlement program will develop this strategy with you and then implement it.
To schedule your initial consultation at our convenient central Denver location call 303-933-4529.
