Is Debt Settlement The Right Option For You?

Facing large amounts of debt can be stressful for anyone. Outside of the immediate problems it causes, debt can affect a person’s future financial decisions and make it difficult to purchase homes or cars, open credit cards and bank accounts, or take out a loan.

When someone is trying to deal with debts they need to repay to creditors, it’s important that they look into any options they may have. For many people in Florida, debt settlement is a solution that works.

What is debt settlement?

In many debt cases, a person is unable to pay back the full amount of the money they owe to a creditor or collection agency. As the missed payments stack up, and their credit score goes down, a person can consider looking at debt settlement as the answer. A debtor can request a settlement with a creditor by offering to pay a percentage of the debt and in exchange having the entire sum forgiven.

Many creditors in Florida will choose to accept an offer from a debtor if it is an acceptable percentage of what they owe because creditors realize another option the debtor has is to file for bankruptcy, which means the creditor could receive nothing at all as a result.  Creditors also have to weigh the cost of pursuing you in court for payment of any of the debt.  Debt settlement only works for certain types of debt, however. Unsecured debts such as credit cards, medical bills, and personal loans can all be relieved using debt settlement, while secured debts like mortgages, child support, and car or truck loans usually cannot.

How does debt settlement work?

In order to qualify for debt settlement in Florida, a debtor must sometimes show to the creditor that they do not have the financial capacity to pay back the full amount of the debt they owe. If the creditor is aware that the debtor has the financial means to do so, they may not accept a settlement offer.

Before a person chooses to seek a debt settlement with a creditor or collection agency, it’s best to seek guidance from a debt attorney who understands the process and can give the advice needed for the person to examine other options prior to proceeding. After finding an attorney to guide the process, they will be able to negotiate with creditors and debt collectors to find the best settlement agreement for you.

Debt settlements don’t usually come with an installment option, but instead mostly require a lump sum of money to relieve the debt. It’s important for the debtor to make sure that they have the money to pay the sum if it is agreed upon by the creditor before they seek a settlement. This helps prove to the creditor that the debtor is serious and willing to pay what they can on their debt, which can push them to relieve the debt entirely after they receive the payment.  Paying a larger sum up front can also convince a creditor to accept a payment plan for the remainder of the settlement amount.

Finding a debt attorney to oversee your debt settlement 

In Florida, a debtor who is looking to request a debt settlement from a creditor should first meet with a knowledgeable debt attorney to look over their situation and weigh their options for them. If debt settlement is found to be the best option, the attorney can represent the debtor and negotiate on their behalf.

If you’re looking to seek debt settlement from a creditor or debt collector, we can help. The West Palm Beach debt settlement attorneys at Kelley Kaplan & Eller have the knowledge and experience to ensure you receive a fair settlement to help you move on and focus on the more important things in life.