If you are struggling to pay your bills each month, you may want to consider pursuing an out-of-court settlement agreement with your creditors rather than filing for bankruptcy or taking other action. Out-of-court settlement agreements are legally binding contracts between you and your creditor. Debt settlement agreements in Florida can reduce the amount of money you owe, extend the time you have to repay, and lower your interest rate.
Are you interested in finding out more about debt settlement and relief – and whether it could be a good option for building a better financial future? The experienced Orlando debt settlement attorneys at Florida Law Advisers, P.A., are ready to listen to you, analyze your situation, and map out the best path forward for you.
Contact us now for a free and confidential consultation that comes with no further obligations on your part. Our mission is to provide stress-free, cost-effective results for you. Start now to build a better tomorrow – one without unmanageable debts and worries about creditors.
What Is Debt Settlement?
Debt settlement happens when a creditor agrees to accept less than what is owed on an account to fully satisfy the debt and make it go away. It could involve waiving late fees and interest, as well as reducing the principal amount owed. Creditors are generally not required to offer nor accept a settlement proposal. However, many lenders will accept settlement offers and even encourage borrowers to settle past-due accounts.
Debt settlement negotiations can be a very helpful tool for financially struggling families in Orlando and throughout Florida. However, it is important to have legal representation when negotiating with your creditors to prevent any unwanted consequences. Your creditors will likely have a team of attorneys working to protect them. You should have a skilled attorney on your side protecting your rights.
In most cases, you will be required to sign a settlement agreement. These agreements can be difficult to understand and have hidden penalties that only an experienced attorney can identify. By working with Florida Law Advisers, P.A., to negotiate out-of-court debt settlements, you can be confident your rights are protected and you are getting a fair settlement.
How Does Debt Settlement Work?
Most people who consider debt negotiation have fallen significantly behind in payments on one or more debts. In some cases, the debts may have already gone into collections, and the creditors or their debt collectors may be harassing you for payment. Someone who is thinking about debt settlement options probably has no reasonable way to manage the debt and pay it off based on their current income and overall financial situation.
Because creditors are concerned that you will not pay anything on an unsecured debt – like credit card bills, personal loans, and hospital bills, among others – they may be willing to work out an arrangement where you agree to pay something back, but not the full amount owed. Debt settlement typically isn’t an option for secured debts like car loans and home mortgages, though mortgage loan modifications and other alternatives to foreclosure could be available. Although they are not secured debts, federal student loans are another special situation.
Debt Settlement vs. Bankruptcy
Settlement agreements with your lender can be very helpful. However, other forms of debt relief may be more effective than negotiating with your creditors. For instance, in some cases filing for bankruptcy can provide more benefit to a borrower than out-of-court settlements.
If you don’t qualify for bankruptcy, or it doesn’t seem to be the right option for you, debt settlement and relief could provide an alternative route to getting your financial house in order. In some circumstances, debt settlement could ultimately help you rebuild your credit score while avoiding the costs and complexity of going through bankruptcy.
If you are trying to decide whether debt settlement or bankruptcy is the right option for you, your best course of action is to talk to the attorneys at Florida Law Advisers, P.A. Because our lawyers have extensive experience with debt settlement, bankruptcy, and other forms of debt relief and management, we can thoroughly review your specific circumstances, weigh the pros and cons, and advise you about which solution offers the best likelihood of optimal results for you. Consulting with the Orlando debt settlement lawyers at Florida Law Advisers, P.A., is free and completely confidential.
What Is a Debt Settlement Plan?
Under a typical debt settlement plan, the debtor will agree to set aside money in a special savings account each month until the balance is enough to pay the settlement figure the creditor has agreed to. When the agreed-upon figure is paid, the debt is satisfied, and the debtor no longer owes anything on the account.
It is critical to work with a knowledgeable Orlando debt relief attorney like those at Florida Law Advisers, P.A., when setting up a debt settlement plan. Our attorneys are ready to stand up for your rights and interests throughout the process to ensure the plan’s terms are as favorable to you as possible.
What Types of Debt Are Eligible for
Debt Settlement?
Unsecured debts like credit card balances and personal loans could be eligible for debt settlement and relief. “Unsecured” means you didn’t put up any collateral for the debt, such as a car or a house. Other options could be available for dealing with a car loan or a home mortgage. Even though they are unsecured, federal student loans are usually not good candidates for debt settlement agreements.
The best option for finding out whether your debts are a good fit for debt settlement negotiations is to contact Florida Law Advisers, P.A., for a free consultation. Our Orlando debt settlement attorneys can review all of your debts and determine what options you have for building a better tomorrow.
What Are the Debt Collection and Relief Laws in Florida?
Many laws come into play when dealing with debt collection and relief in Florida. For example, debtors receive significant legal protections under the federal Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act. Many other laws could also play a role in debt collection and relief, including consideration of bankruptcy and tax laws, among others.
How Much Will I Have to Pay Back?
Each creditor will have their own rules for settlement. Many banks are willing to accept as low as 10% of the balance, while others will require a much higher percentage.
The most significant advantage of negotiating with your creditors is the possibility of reducing the amount of money you have to pay back. The amount of money you will be able to save on the debt will vary for each individual creditor. However, it is not uncommon for creditors to reduce the amount you owe by 30 to 80% of the outstanding balance.
Negotiating with creditors can also help with your credit score. If you fall behind on payments or file for bankruptcy, your credit score will take a dive. Bankruptcy can stay on your credit report for up to 7 years and prevent you from getting that new loan or credit card you need. By negotiating with your creditors, you can more quickly pay off your debt and avoid falling behind on the payments, which will help boost your credit score.
Depending on the terms of your agreement, you may have a tax liability for settling with your creditor. In some cases, a creditor will issue a 1099-C, which would require you to pay federal taxes on the amount the creditor lowered your balance. For instance, if, during negotiations, the lender agrees to lower the amount owed from $150,000 to $100,000, the lender may issue you a 1099-C for $50,000. Under this scenario, you may have to pay taxes on the $50,000 you saved on your debt.
If My Wages Are Being Garnished, Can I Still Opt for Debt Settlement?
A wage garnishment does not necessarily prevent you from a settlement. However, garnishment makes negotiations difficult because the bank may not have the incentive to accept less money. Generally, it is best to dismiss a garnishment before attempting debt settlement.
What Should I Do if a Debt Collector or Collection
Attorney Is Harassing Me?
State and federal laws prevent debt collectors and collection agencies from taking certain harassing measures to seek repayment of debts. If you believe you are being targeted with harassment from a debt collector or collection agency, reach out to Florida Law Advisers, P.A., and find out how our attorneys can stop the calls, letters, and intimidation.
Contact Our Orlando Debt Settlement and Relief Attorneys
Regardless of whether you need help negotiating with creditors, consolidating your debt, or filing for bankruptcy, Florida Law Advisers, P.A., can help. Our initial consultation is free, and we offer all our clients flexible payment options.
Contact us today to schedule your free consultation with an Orlando debt relief attorney at Florida Law Advisers, P.A.