I often talk about debt relief options on this blog. One of those options, debt settlement, happens to be the exclusive practice area of my law firm in San Diego. I speak with consumers daily about the option of credit card debt settlement. One question always seems to pop up: Why should I hire a professional to settle my debt? I understand why people ask this question. The idea of paying an attorney doesn’t sit well with some. My guess is that some of these people would paint their own house, cut their own hair, and drill their own teeth rather than hiring someone. Sure, you could do all these things on your own. But would you do them as well as the professional painter, hair stylist or dentist? Maybe, maybe not.
Key questions to consider before debt settlement
There are a number of questions to consider when negotiating debt. I wouldn’t try to give you the most important or a top three list here. There’s too much to consider. What do you tell your creditor? How much financial information do you give them? When is a debt “ripe” for settlement? What is a good starting offer? Do you make the first offer or do they? Did you just get their best offer or is there room to get the number down further? Will a particular creditor sue you if you don’t settle? If so, at what stage of delinquency will you get sued? Will your creditor sell your debt to a third party? If so, when? Am I settling with the correct party? Am I being fully released from the debt? Am I paying on a valid debt? Is there a better time to settle your debt in the month? In the quarter? In the year?
This is by no means an exhaustive list of questions. Many things can happen during the settlement process and you need to be prepared each step of the way. Relying on someone with skill and experience could wind up saving you thousands of dollars in the settlement process. A potential client of mine recently relied on a non-attorney to attempt to negotiate a settlement of her debt. The creditor had referred the matter to a collection attorney. The non-attorney had no experience negotiating debt. After providing a full financial statement, the law firm refused to budge from a full balance demand. The potential client is now facing bankruptcy. I can’t guarantee that results would have been different if the client had retained me, but my track record is usually much better than full balance settlements. Especially with this particular law firm she faced. Sometimes it pays to hire an experienced professional. You should consider this when deciding how to handle your own debt.