- Does your firm handle Debt Settlement
- Yes, we do although technically it is not a legal service
- How does debt settlement work?
- You pay money into a trust account with our firm as the trustee of the account. You stop paying your creditors
directly, and the money in the fund is used to negotiate lump sum payouts to your creditors.
- Why would a creditor accept less than what is owed?
- Various reasons, including the
possibility of a bankruptcy filing, a worthless lawsuit against a judgment proof debtor, and getting a return on their loan now.
- Why use a law firm for debt settlement?
- One very good reason is as a bankruptcy firm we have the ability to evaluate the outcome of a bankruptcy case and
argue that outcome to the creditor as a reason to settle. We also have the ability to carry out threats of a bankruptcy filing and other legal defenses to credit card a lawsuits.
- Can I create my own account without a trustee
- No, the account has to be under our control similar to monies that a chapter 13 debtor would pay to a bankruptcy trustee.
- Will debt settlement stop bill collector calls?
- Yes, under the federal fair debt collection practices act, the fact that you are represented by an attorney in a debt collection matter requires the debt collector to call
us and not you.
- Will debt settlement stop charge off's and slow pays from being reported on my credit report?
- No, your credit report will proceed as
usual and your credit is likely to worsen while the debt settlement program is in progress
- Will I owe income taxes on debts settled for less than full value?
- Maybe, under the IRS Code forgiven debt is taxable income. However that does not necessarily
mean that you will owe tax
- Is debt settlement advisable over filing for bankruptcy?
- Many people are afraid to file for bankruptcy for illogical reasons, or because they have been
scared against the filing of a bankruptcy case by those who benefit from their not filing. However, some people are in niches where they do not do well under bankruptcy.
Many times with the upper middle class, the bankruptcy means test will show more disposable income than what it would take to settle all of your debts under a debt
settlement program. Some others have assets that
are unprotected in bankruptcy and it is best to leave them hidden without the forced disclosure provisions of the bankruptcy code. Whether to consider debt
settlement needs to be carefully evaluated on a case by case basis.