Does Debt Settlement work in NYC
If you are behind on your debt, you may have been told that a debt settlement could be an option. Debt settlements are when a creditor is willing to settle your debt for less than is actually owed. For example, if you owe $10,000 in credit card debt that is way past due, the credit card company may accept a one-time payment of $7500 as ‘payment in full.’
On the surface, this certainly sounds like a great option. You can save a lot of money, and get your debts paid off quickly. And, in some cases it can actually be a good strategy for getting out of debt more quickly. Having a fuller understanding of how this type of thing works, and what potential issues with it there may be, is an important step in deciding if it is right for you.
When is Debt Settlement in NYC a Good Idea
If you have a large debt that is six or more months behind, your creditors may be willing to consider a debt settlement in NYC, Brooklyn, or the surrounding area. In most cases, this is really only an option on higher balance credit card debt and other unsecured debts. The biggest problem with debt settlements is that it requires you to have a large sum of money available to make the payoff amount.
If you owe $25,000 and the creditor says they will accept $10,000, it may seem like a perfect option. If you don’t have $10,000 laying around to pay the money, however, it isn’t even an option. Since most people with large sums of money sitting in an account aren’t behind on their bills, this is rarely a realistic option. The one exception could be if you suddenly came into a large sum of money from an inheritance or other one-time event. When this is the case, debt settlements can be a reasonable option to consider.
A Real Debt Solution for Everyone
Rather than trying to figure out a way to make a debt settlement work, you should consider a more reasonable option. Almost everyone who is significantly behind on their bills can qualify for a Chapter 7 Bankruptcy. This type of bankruptcy allows you to eliminate your debts without having to pay off the balances at all. In addition, rather than trying to negotiate the settlement with the creditors themselves, bankruptcies let the courts step in to ensure you are treated fairly.
Another benefit of Chapter 7 Bankruptcy is that you can deal with all your debts at one time. With debt settlements, you would have to negotiate a separate settlement with every one of your creditors. This is almost never possible, and even if it were, it would be so difficult to keep track of that it would be entirely unrealistic. Going through the bankruptcy courts, you don’t have to worry about that type of problem since the courts will issue their orders on your behalf.
Get Effective Bankruptcy Representation
When going through a bankruptcy, you need to make sure you have the legal representation needed to ensure you are treated fairly throughout the experience. Contact us at 1-718-646-5783 to speak with an attorney with years of experience helping people from NYC, Brooklyn, Queens, Bronx, and Staten Island through Chapter 7 Bankruptcy.