You may not want to file personal bankruptcy on a debt. You may owe just a single debt, or just a few. In some cases, it makes more sense to consider debt settlement over bankruptcy. Consider hiring an experienced debt settlement attorney in Washington D.C. and Virginia to engage in debt settlement on your behalf.
A creditor may consider settling a debt for less than what you owe if you are able to convince the creditor that settlement is in their best interests. But creditors take you more seriously when you are represented by counsel. And an attorney will be able to obtain more satisfactory results. Lee Legal represents debt settlement clients in Washington, D.C. and Virginia.
Debt Settlement and the Bankruptcy Threat
Most debts are unsecured debts and can be discharged in bankruptcy. This makes debt settlement easier, because your attorney can employ the bankruptcy threat in negotiations. Your income affects how effective this threat will be because your household income determines which chapter of bankruptcy you will qualify for.
Chapter 7 Bankruptcy. If your income is less than the median income for your jurisdiction, in most cases you qualify for a Chapter 7 bankruptcy. If you qualify for Chapter 7, then debt settlement negotiations are more effective. This is so because the creditor will receive nothing in a Chapter 7. Instead, the Chapter 7 will discharge your debt and you will have no further legal obligation to repay the debt.
Chapter 13 Bankruptcy. If you make more than the median income for your jurisdiction, in most cases you cannot file a Chapter 7 bankruptcy. Instead, you must file a Chapter 13 bankruptcy, which entails a repayment plan. This threat may be less effective in debt settlement negotiations because the creditor will be repaid something in the Chapter 13. The amount you must pay each month under the terms of the repayment plan will vary depending upon your income and the total debts you owe. At the end of the repayment plan, any remaining balance on your personal loan will be discharged.
Debt Settlement Attorney in Washington D.C. and Virginia
Even without the threat of bankruptcy, your attorney usually can effectively reduce the amount you owe by analyzing your financial picture and your ability to repay. After all, you would not be in debt collections if you could simply write the creditor a check. Using numbers that the creditor can evaluate efficiently tends to generate better results for my creditors. The more difficult it is to obtain this information, the less likely it is that the creditor will agree to debt settlement.
Do not hire a “debt settlement” company to handle your debt settlement. In most cases, they are a complete rip-off. Instead, consider hiring a reputable debt settlement attorney in Washington D.C. and Virginia to handle the negotiations for you. Your attorney works for you and you alone, not some corporate bottom line. Lee Legal can help you assess your debt settlement options.