We’ve all seen the commercials. “Consolidate your debt now; get debt relief by calling us today”. Sounds good, right? Do you know the difference between debt consolidation and debt settlement? Are you aware that debt settlement is best handled by an attorney and not a “company”?
The difference between debt settlement and debt consolidation is huge. With debt consolidation, your unsecured debts are added up, at which point you will be given a single monthly payment. The person handling the debt consolidation will take your payment and divide it among your creditors and/or negotiate a lower interest rate. When your debts are totaled, all the inflated interest and penalties will also be added. This process makes your total debt higher than it should be and will take additional time and money to pay off.
Debt settlement attorneys negotiate, reduce and in some cases eliminate your debt so that you do not have to file bankruptcy. They provide debt solutions through settlement and negotiation and assist the client in managing their debts while addressing their individual needs. Although there are several large companies offering debt settlement services, this type of work should be handled by an experienced attorney. Why?
First, debt settlement companies are motivated to make quick settlements so that they can receive compensation. Attorney compensation is not linked to negotiating quick settlements. As a result, they work harder to ensure the best possible outcome.
Second, if you are enrolled with a debt settlement company and get sued by a creditor, you will be left with the burden and expense of finding and hiring an attorney. Debt settlement companies cannot provide legal support or guidance should you need it.
Third, believe it or not, debt settlement attorneys often charge LESS than debt settlement companies. Why pay more for work by a non-attorney that would likely be better handled by an attorney?
When you utilize a debt settlement attorney, you will likely be party to legally binding settlement agreements that are obtained as the result of spirited attorney-led negotiation with your creditors. In addition, you will be able to put money together over time for settlements and fees, likely receive significant balance relief without added interest and penalties, and will get far fewer or no harassing calls from debt collectors.
Kevin Fallon McCarthy
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