Debt Settlement Attorney
Life is a series of partnerships formed to ease our way through challenges. Just as the right partnership can pave the way for personal or professional success, choosing a partner in your journey towards financial freedom can significantly lighten your load. This is where our debt settlement attorneys come into play, aiming to simplify the debt settlement process and lead you down a path toward the outcome that suits you. With debt negotiation support and a breakdown of all legal options, trust McCarthy Law to highlight your path forward.
Debt Settlement — How the Debt Settlement Procedure Works
Many honest and upstanding individuals face challenging financial situations in today’s economy. From personal loans to private student loans, there are many things that can leave you in financial turmoil. Bankruptcy is a solution that works for some, but it is not the right solution for everyone seeking a way out of overwhelming debt. Even without incurring new debt, paying off existing accounts can mean years or decades of paying off the debt and continuing to pay high interest.
Learning how to eliminate credit card debt begins with a free consultation and an experienced debt settlement attorney reviewing your situation. At our law firm, we offer free consultations for people looking for workable solutions. There is no pressure at McCarthy Law. There is no blame assigned. Our lawyers and paralegals listen with respect and concern in all discussions about your debts and the solutions available to you. Sometimes, the answer may be debt settlement, but in others, you may need to look deeper into other options, like bankruptcy.
When you experience debt settlement with McCarthy Law, you will experience the following:
- An experienced debt settlement law firm will review your current financial situation, including your income, real estate, and other assets.
- We will analyze your current budget needs and income to determine what you owe and what you can afford to pay.
- If you have significant unsecured debt and the financial means to settle, you can choose to engage our debt settlement services
- We will quote a reasonable flat fee based on the amount of your debt.
- We will set up a payment plan through which you will put aside settlement money.
- Our law firm will send letters to your creditors, informing them that we will represent you and handle all further communication.
- You will never again need to communicate with your creditors; we will handle all interactions on your behalf.
- Our team of attorneys and paralegals will establish a dialog with your creditors and negotiate a settlement.
The debt settlement process, from start to completion of the settlement, can take anywhere from six months to as long as four years.
The Difference Between Debt Settlement, Debt Consolidation and Bankruptcy
When faced with financial difficulties, it’s important to know your options.
Read More
Debt settlement involves negotiating with creditors to pay off a debt for less than what is owed. This route can help alleviate the burden of unmanageable, unsecured debts by reducing the overall debt owed.
Debt consolidation combines all debts into a single new loan, hopefully with a lower interest rate. This consolidates monthly payments and can help pay off debt faster. However, good credit is required to obtain favorable terms.
Bankruptcy should be considered a last resort. It can offer a fresh start but has significant consequences, including a lasting impact on your credit score. Each option has its place depending on individual circumstances, and legal representation can help you make an informed choice.
What Is a Reasonable Offer to Settle a Debt?
Negotiating debt settlements is more art than science. A reasonable offer typically ranges between 30% to 85% of the outstanding debt. Several factors influence this, such as the age of the debt, your financial situation, and the creditor’s policies, so you can’t know for certain what the right kind of offer is. But a reputable lawyer can cover all the bases for you. McCarthy Law will assess your specific circumstances to propose a fair offer that reflects your ability to pay while striving for the maximum reduction of your debt load.
Is Debt Settlement Worth it?
Deciding whether debt settlement is worth it involves weighing the immediate relief of reduced debt against potential impacts, such as temporary credit score dips and possible tax implications on forgiven debt amounts. For many, the chance to avoid bankruptcy and reduce unmanageable debt is worth these considerations. It’s about taking back control of your finances, with the attorney-client relationship providing guidance and support throughout this challenging process.
How Do I Know That I Need a Debt Settlement Attorney?
If you’re pondering over needing professional help with your debts, consider these questions:
- Are you struggling to make minimum payments on unsecured debts?
- Have you considered bankruptcy but want to explore other options?
- Are you overwhelmed by dealing with multiple debt collection companies?
- Do you lack the experience or knowledge to negotiate with creditors effectively?
- Are medical bills part of your unsecured debts causing financial strain?
If you answered yes to any of these, seeking legal representation could provide the direction and assistance you need to manage and settle your debts.
Who Qualifies for Debt Settlement
You might qualify for debt settlement if you’re drowning in credit card debt, medical bills, or other unsecured debt that’s become impossible to manage. Most people who benefit from our debt settlement services owe thousands in unsecured debts and are struggling to make minimum payments each month.
Your creditor has likely started calling constantly, and you may have received letters threatening legal action or a lawsuit. This constant pressure creates stress that affects your daily life, your family relationships, and your ability to focus on work or other responsibilities.
Common Qualifying Situations:
- Credit card debt exceeding $10,000 across multiple cards.
- Medical bills from hospital stays or emergency procedures.
- Personal loans or lines of credit in default.
- Collection accounts from various debt buyer companies.
- Your monthly income is insufficient to cover minimum payments.
Your mortgage and secured debts, like car loans, don’t qualify for traditional debt settlement because creditors can repossess these assets (see how we help deal with mortgage debt). However, student loan debt sometimes qualifies for settlement, depending on the type of loan and your specific circumstances. The key factor is financial hardship, which makes full repayment unrealistic. You don’t need to be facing foreclosure or bankruptcy to qualify, but you do need to demonstrate that continuing with current payment plans will only make your situation worse.
Debunking Common Debt Settlement Myths
Myth: Debt Settlement Always Ruins Your Credit Score
Your credit is likely already damaged if you’re considering debt settlement. Missing payments, high credit utilization, and collection accounts have probably dropped your score significantly already. Debt settlement does appear on your credit report, but so does continuing to miss payments or filing bankruptcy.
The impact on your credit is temporary. Most people see their scores begin recovering within 12-18 months after settlement, especially when they avoid taking on new debt during the recovery period. Compare this to bankruptcy, which can affect your credit for 7-10 years.
Myth: You Have to Pay Tax on Forgiven Debt
The IRS does consider forgiven debt as taxable income in many situations, but several exceptions apply that many people don’t know about. If you were insolvent when the debt was settled, meaning your total debts exceeded your assets, you typically don’t owe tax on the forgiven amount. Even when taxes do apply, paying tax on forgiven debt usually costs far less than paying the full debt amount to your creditor. Consult with a tax professional.
Myth: Creditors Never Accept Settlement Offers
Creditors regularly accept settlement offers because they bought your debt for pennies on the dollar or would rather receive partial payment than risk getting nothing through bankruptcy or continued non-payment. Debt buyer companies especially are motivated to settle quickly since they purchased your account at a steep discount.
Why Creditors Accept Settlements:
- Collection costs exceed potential recovery amounts.
- Lawsuit costs and court fees eat into profits.
- Risk of debt or filing bankruptcy and paying nothing.
- Debt buyers purchased accounts at 10-15% of face value.
- Immediate payment is preferable to uncertain future collection.
Myth: Debt Settlement Takes Years to Complete
Most debt settlement cases resolve within 12-24 months, not the years that many people fear. The timeline depends on how many creditors you have, the total debt amount, and how quickly you can accumulate funds for settlement offers. We work to prioritize which debts to settle first, often targeting the most aggressive creditors or the largest balances to maximize your relief quickly.
Myth: You Need Perfect Documentation for Every Debt
Many people worry they can’t pursue debt settlement because they’ve lost credit card statements or loan documents over the years. The burden of proof actually falls on creditors to validate debts and prove they own the right to collect from you.
Debt validation requests can force creditors to produce proper documentation. When they can’t provide complete records, it significantly strengthens our negotiating position. Missing paperwork on your end doesn’t prevent successful debt settlement, and it can often help us identify weaknesses in the creditor’s case.
We Help Settle Debts in Phoenix, Texas, and Florida
McCarthy Law is committed to assisting individuals nationwide, including those in Phoenix Metro, Texas, and Florida, in resolving their debt-related challenges through effective legal counsel. We focus on building a solid attorney-client relationship that positions you for a better financial future. We understand the laws and bring a proven track record of successfully negotiating debt settlements that align with our client’s needs. Speak with us today about all your debt-related needs, including debt consolidation, credit reporting errors, payday loan debt, and more.
How Do You Start with Debt Settlement?
For those looking for compassionate, knowledgeable legal representation to assist with debt settlement, we invite you to consider making McCarthy Law your partner.
Call us now for a free debt consultation. There will never be any pressure or obligation to engage our services at McCarthy Law PLC, but you will leave the consultation with an understanding of your options for getting out of debt. If business debt or personal debt has grown unmanageable, talk to an experienced lawyer about negotiating a settlement. Give us a call today or contact us now for a free consultation.