EW Chamber

Being in debt can be horrible and many people feel like there is no one to turn to. Knowing that you owe sizeable amounts of money to multiple creditors can make your stomach turn, especially when the collection calls start coming in. But, luckily, you don’t have to go through this bitter process alone. There are people whose occupation it is to help you get out of debt and on the appropriate track again, with as little damage to your credit as possible.

The first thing you need to do is contact a loan lawyer or a debt settlement attorney. Chicago has plenty of options to choose from, but if you need a recommendation, a friend of mine used the Illinois Law Group.

This is how numerous debt settlement companies work. First, you will end paying money to your creditor and, instead, start saving money monthly in a trust account. Then, the settlement company of your choice will handle the torment of the collection calls and put them to an end. After a good amount of money has been gathered in the trust account, your debt settlement company can begin negotiating with your creditors, one at a time. Finally, both sides concur on a settlement price that is typically 40%-60% less than what was initially owed.

This process usually takes up to two to four years to complete. The settlement company commonly charges between 25-35% of what was forgiven under the company’s negotiations. And the greatest news of all is that, once a settlement has been reached and paid off, creditors are not legally permitted to ever come after you for the balance that was never paid, because your debt settlement company negotiated that for you. But be skeptical and do your research, because in a few states, like Alabama and Delaware for example, the creditor retains his right to sue after the negotiated price is paid off, under certain circumstances.

At the end of the day, you need to do your inquiry and decide what the right action for you to take is. It never hurts to confer with an attorney for his/her skilled opinion. Settling your debt can mean averting bankruptcy, paying one single payment to one company instead of multiple, avoiding high late fees, collection prices and other extra charges. It can also wind up as a low credit score and paying taxes on the initial unpaid debt to the IRS.

This entry was posted on Friday, October 23rd, 2009 at 6:44 pm and is filed under real estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.