Debt Settlement
Our lawyers have been settling debts for more than three decades. Most folks who explore debt settlement also think of bankruptcy. But many people who consider bankruptcy don’t qualify for bankruptcy (i.e., too many assets that cannot be protected, above-average income, etc.)
Call a debt settlement attorney now at 303-623-4357
We offer free consultations
We are effective with settling creditors for one big reason—our clients have saved the money to settle. It’s a waste of time to work out a settlement unless the client has the money saved up. Because the best deals, and sometimes the ONLY deals to be had are when the funds are ready to be paid.
And creditors all have their own personalities. American Express is not as easy to deal with as, say, Capital One. And medical bills are easier to settle than a debt to Capital One.
If you owe, say $40,000 of debt, and are current, the odds of getting a deep discount are not strong. Folks who are three months behind with payments have much more “credibility” when offering to settle than those who are current. It’s just the way it is.
Consider answering the information (below) to start the process. We offer a free initial consultation.
How most debt settlement companies work (that is, they take too long and payments are stretched out)
Debt settlement firms assume they will settle your debt at 50% of the balance at the time of negotiation. Their fee ranges from 18% to 25% based on the full amount owed to the creditor. Based on these figures, the max savings is approximately 25% of the amount owed. This does not take in consideration that the creditor can send a 1099 for the unpaid balance which further decreases your “savings”.
Example of how the debt settlement process and fees work:
- Total Credit Card Debt $30,000- Estimated monthly minimum is approx. 3% = $900 a month
- Debt Settlement estimated reduction is 50% = $15,000
- Debt Settlement Fee is generally 25% = $7,500
- Total amount to be collected from client- $22,500.00
- Debt Settlement will offer a 36-month payment arrangement = $625 per month.
- Credit Card # 1- Original Balance $5,000
- Months to accrue sufficient funds to offer settlement= 6 months ($2,500 settlement offer, plus $1,250 fee).
- Total Savings on Credit Card # 1- $1,250
- If Credit Card sends 1099 for unpaid balance of $2,500 and tax rate is 13%, client will owe $325
- Actual Savings $925.00 (this amount does not include the $9.95 monthly service fee to maintain trust account)
The biggest problem with prolonged debt settlement. The “hot” on the credit report keeps piling up. And the statute of limitations to collect is 4 years to 6 years from last payment or charge. Creditors tend to file a lawsuit by year two after a default. Its much more effective to settle the debt in one lump-sum. Credit rating is restored quicker than years of slow payments.
To learn more about how we can handle your debt settlement in Denver, Colorado Springs, Fort Collins, Boulder, Loveland or any nearby area, call our legal team today at (303) 623-4357 to schedule an appointment.