Debt negotiation is the process of contacting your creditors and making arrangements to pay less than the amount you owe on a debt. When a creditor accepts less than what you owe them, it’s called a settlement.
A settlement is a common way to get out of debt and it’s a strategy that should be on your list before you consider filing for bankruptcy protection.
Creditors know that they will get little or nothing if you file for bankruptcy and are more willing to negotiate settlements as an alternative. Once an account is settled in full you no longer owe the creditor or collector.
You can negotiate debts of any kind including credit cards, medical bills, and some loans.
You can’t normally negotiate settlements on secured loans, such as home or auto, unless you’re willing to loss your house or car.
It’s also fairly common for the IRS or other tax enforcement agencies to accept settlements, although they are not required to do so.
Student loans are generally the hardest to settle.
The lawyers at Hurst & Hurst Law can help you make the decision between bankruptcy and debt negotiation and settlement. We can help you make an informed decision on what is best for you. Contact an attorney at Hurst & Hurst Law at (859) 209-2101.