Your Free Report from:
www.YourHoustonConsumerAttorney.com
"Five Things You Need To Know Before
Settling Your Debts"
1) Why now is a great
time to settle your debts
2) Why Texas is a good state for protecting debtor rights
3) How debt settlement, consolidation, and bankruptcy compare as debt relief options
4) How a debt settlement lawyer can help you escape debt and save money
5) How debt settlement will affect your credit and future
Now is a great time to settle your debts
New laws and guidelines have been enacted under the Obama administration to
help debtors overwhelmed by debt. The Credit Card Accountability Responsibility and Disclosure Act of 2009 was designed to
correct certain questionable business practices of the credit card issuers. This law prohibits retroactive rate increases,
confusing billing practices, and the practice called universal default where creditors could raise all your card interest
rates if you got behind on your payments for just one. These changes may help new borrowers stay out of trouble more than in
the past, but they offer little help to debtors who are currently in danger of default.
To help these consumers as part of the 2010 stimulus bill funds were made
available to many companies that were facing large amounts of unpaid revenue from debtors and, in addition, the bill included
attractive tax breaks for credit card companies. Because of these tax breaks, many companies are willing to negotiate down
debt with their customers because their losses have been cut by the Federal Stimulus Plans. This “window of opportunity” for
consumers may not last too long so now, 2011, may be your best chance ever to negotiate a favorable settlement with your
creditors. With the economy still reeling, foreclosures and bankruptcies at near record level, and creditors badly needing all
the money they can get, now is an excellent time to get out of debt through negotiation and settlement, preferably with the
help of an experienced debt settlement lawyer.
Why Texas is a good state for protecting debtor rights
Texas was founded by debtors and Texas law has tried in many ways to
protect consumers from losing all their assets and from losing their ability to rebuild their lives after a catastrophic
financial loss.
In Texas creditors holding unsecured debt cannot take away or put a lien on
your house if it is your Homestead. Also certain property such as your car and tools of your trade are protected. Other states
have rules that are much tougher on debtors, but in Texas you are protected greatly by both state and federal laws. This puts
you and your debt settlement lawyer in a better bargaining position in dealing with your debts.
Because of this, some debtors feel that they can “go it alone” against
their creditors even in court. Unfortunately this seldom works, and often results in judgments and lost lawsuits. With a good
lawyer, however, your odds are more evenly matched and you will be more likely to ward off lawsuits, avoid judgments, or
negotiate a settlement that you can live with. Creditors prefer to deal with professionals rather than with nervous debtors,
and they are often willing to offer better deals knowing that you have good legal representation. No creditor looks forward to
tough and expensive court cases, and they will often jump at the chance to get an easy, even if low, settlement.
How debt settlement, consolidation, and bankruptcy compare as debt
relief options
Basically, there are three (actually four) different approaches to dealing
with unsustainable debt… debt consolidation, debt settlement and bankruptcy. And the fourth option is to do nothing, and for
some folks this might be okay. However, this last option will only work if you are truly “judgment-proof,” with very few
assets, little income and no need of credit. If this is not your situation you should carefully consider the pros and cons of
the other three.
Debt Consolidation: This is
a process in which the financial lenders will issue one single consolidated loan in order to pay back all the accumulated
small loans. This method is good for all those people are under the deeply stressed by paying bills to many different
creditors at the same time, and who need a workable debt management plan. If the amount of all liabilities is less than ten
thousand dollars then a debt consolidation loan may be the right choice. The danger here lies in the situations in which your
new loan is secured by your home. You are essentially trading your unsecured loans for a secured one, thus risking your home
if things go wrong. This is a bad idea. Especially this is true if you are already in financial trouble. Rather than just
“hope for the best” and gamble with your home, this might be time to consider the other two options- settlement or
bankruptcy.
Bankruptcy: this is
considered as the most traditional way for credit card debt relief. In this process the court has the right to declare the
person bankrupt. This method is only good as a last resort. This approach may be right for debtors depending on the kinds and
amounts of debt owed, assets, income, and plans for the future. A bankruptcy will follow you and hurt your financial life for
at least ten years so it is not something to enter into lightly. It may help protect your home or buy you time, but not
always. It comes down to a question of whether or not the costs outweigh the benefits.
Debt Settlement: In the debt settlement process, a skilled negotiator
talks with lender and makes them agree on allowing a reduction in the amount which the borrower actually has to pay. The
process is purely legitimate and is best performed with the assistance of an experienced lawyer. If the accumulated amount
of debt is more than or equal to ten thousand dollars then debt settlement may well be the best choice for getting out of
the debt trap. This method for credit card debt relief is mutually beneficial for both lenders and borrowers since the goal
of all creditors, collection companies and the credit card companies is to receive some kind of money from you. A partial
payment is far better than none, which is what they will get if a debtor chooses bankruptcy.
Of course, debt negotiation is not right for everyone, even if ones debt is
large enough to warrant it. Some folks are more suited for bankruptcy. For settlement to work a debtor must be into default
first in order to begin the process of
negotiations with the credit card companies, etc., and this will mean that
you will get collection calls may even be unlawfully harassed by debt collectors who will knowingly violate laws in attempting
to threaten and scare you into making the payments they demand.
Once you are in default you must be prepared to deal with debt collectors
whether they choose to “play fair” or not. Part of this is to know your rights and be ready to defend them. But be aware that
these creditors and collectors are not just going to leave you alone, even if you hire a lawyer to represent you. You will
have to have a thick skin to weather the abuse and intimidation that is often used against debtors, law or no law.
According to the Fair Debts Collections Practices Act (FDCPA) a
creditor
cannot threaten to have you arrested and threats of violence are certainly
not acceptable, but creditors will use all kinds of illegal mean if they think they can get away with it. Violations of these
laws should be documented and ultimately may be used by ones lawyer if necessary. If debt collectors start threatening
garnishments, lawsuits or repossession, it needs to be within their legal rights and it needs to be done through the legal
process. To protect your rights, defend against possible lawsuits, and to get the best settlement if that is your goal- these
are some of ways that having a lawyer will aid you in this fight to protect your assets and future.
I'm certainly not advocating that someone who is perfectly capable of
paying their bills not do so. Debt settlement, like bankruptcy, is a serious matter and will definitely lower your credit
score for a period of at least two years. Paying your bills on time is the only way to maintain your credit score. Debt
settlement is same as paying your bills late, but it will not hurt ones credit and future in the same way that bankruptcy
can.
Also be aware that though technically you owe a debt until it is paid, that
in practice once the debt collection statute of limitations expires, no debt collector has the right to legally sue you.
Unfortunately, this sometimes won’t keep a collector from trying. A statute of limitations exists for each state regarding how
long a collection agency has to file a lawsuit against you. This time period is an average of 3-5 years, but can be as short
as 2 years or as long as 15 years, depending on where you live. Having these so-called “zombie lawsuits” dismissed is another
service in which a settlement lawyer can help you.
Debt Settlement and your future
Million of Americans are facing debt. Millions have faced debt, and
millions have overcome it. Ignoring your problems will only make them worse. You can be sure of that. If, however, you can
face your situation and take action now, you can be debt-free within a reasonable amount of time, not the 30 year trap that
you are now in. The debt settlement process may at times be difficult and will probably hurt your credit scores in the short
run, but in the long run you will be debt-free and in charge of your financial future again.
The bottom line: The decision is yours
As was mentioned at the beginning of this report, now is a great time to
settle your debts in a way that you can live with. Neither you nor your creditors want to see you go down the drain
financially and be forced into bankruptcy. Though painful, debt settlement is much less painful than enduring many more years
or even decades of crippling debt.
Don't fall into the trap of thinking that you can forever get by only
paying off the minimum amount on your credit cards or loans. This is a prescription for thirty years of misery, because that
is how long it will take you to pay them off. Some creditors actually want you to just pay the minimums, so you'll stay in
debt to them for the longest time, and so they will get the most possible money out of you. Don’t let this happen to
you.
What to do now?
Are you a Texas resident? Do you have more than $15,000 in unsecured debts?
Do you want to get debt-free while the time is right for settling your debt, often for much less than your creditors claim you
owe? Do you have some assets and income? Do you want a tough negotiator and skilled defending of your interests and rights as
you work your way out of debt while you still can?
If you answered yes, I suggest you contact Houston consumer lawyer,
David Fernandez.
You may contact him
through his website at:
www.YourHoustonConsumerAttorney.com
or call:
713-513-4895
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