Debt settlement companies and attorneys can work with your lender to agree on a settlement amount. However, you do not need a debt settlement professional. You will need to share personal and financial information with them, so only do so if you feel comfortable.
The person or organization will review your debt in a consultation. They will review all of your current debts and assets. You will need to give out details about your income, property, and other valuables.
They will create a budget to find out what you can afford to pay. The attorney or team should determine if you are a good candidate for debt settlement or bankruptcy.
If they believe you have a strong opportunity for debt settlement, the will do the following steps:
- Send representation notifications to your creditors.
- Will start speaking to them on your behalf.
- Set up a settlement savings plan.
Once the settlement professional begins speaking with your creditors, you will typically stop receiving calls directly from your lender. If your creditors have hassled you for non-payment, their calls should go to your representation
Often, you will need to set up a savings account and make contributions monthly.
These contributions will be the settlement amount you pay your creditors. If you fail to make these payments, you will not be able to settle your debts.
Settlement professionals should know laws surrounding debt collections, so they can protect and serve you – their client – best. These organizations cannot promise to settle your debt or save you a certain amount of money.
Other options to debt settlement may cost you the same amount, but do not damage your credit.