Debt Settlement in Reno
If you are unable to make your credit card payments or pay your doctor or hospital bills, the lawyers at Darby Law Practice can advise you regarding the debt settlement process, through which your creditors agree to take a lesser amount in satisfaction of the debt.
At some point in time, most debts reach a point where they are ripe for settlement. As long as you are making regular payments, even just the minimum monthly payment required, a company is unlikely to consider a debt settlement. Even if you have missed payments entirely and are technically in default, most creditors, such as credit card companies, will initially be in collection mode, utilizing their collection departments to call, send letters, and otherwise attempt to force or entice you into making payments, with the ultimate goal of being repaid in full. However, after you have been in default for several months, and the creditors have exhausted their efforts to try to get you to make payments, they will likely move into settlement mode.
As a general rule, negotiating a settlement of 40% to 50% of the debt is achievable for unsecured debts such as credit cards and medical bills. Some debts may be settled for less, while others are not possible without paying a greater proportion of the amount owed, but it is good to keep this 40-50% range in mind when trying to negotiate the best deal you can. It is important to know, however, that you will need to pay tax on the difference between the amount of the debt and the amount it is settled for. Experienced lawyers like those at Darby Law Practice may be able to assist you in maximizing your debt settlement or assist with other bankruptcy services, including foreclosure avoidance and rebuilding credit after bankruptcy. We can also help you understand your rights under the Fair Debt Collection Practices Act (FDCPA) to put an end to unlawful threats and harassment from bill collectors.
Advantages of Bankruptcy Over Debt Settlement
Bankruptcy often provides the most efficient and cost-effective means for dealing with unsecured debt. You may be able to discharge a debt in bankruptcy paying far less than you would in a debt settlement; in many cases, you can have your debts fully discharged without paying anything to your creditors. Another advantage is that a bankruptcy discharge does not have any tax consequences, while any amount forgiven in a debt settlement must be reported to the IRS as though you received that amount as income. Also, when you negotiate a debt settlement, you most often have to come up with the entire amount to settle the debt in one lump sum payment, which may be difficult or beyond your means. Finally, bankruptcy has the advantage of bringing all your creditors together in one place and dealing with them at once. If you have multiple debts to deal with, the debt settlement route would require you to negotiate with each creditor individually, with no guarantee that all of them (or even any of them) would agree to a debt settlement.
Reno Debt Settlement Attorneys
Depending upon your overall financial outlook, negotiating a debt settlement may be a viable option, while in other circumstances bankruptcy can help you the most. At Darby Law Practice, we take the time to look at the complete picture and advise you on your best options to rid yourself of the debt which is weighing you down. Contact Darby Law Practice for a free consultation with one of our experienced Reno debt settlement and bankruptcy attorneys.