Filing bankruptcy does serious damage to your credit report and limits your ability to get credit with reasonable terms for several years. While many people who file for bankruptcy protection have already damaged their credit by not paying their bills, those who are still able to make minimum payments on their credit cards may hope to avoid the consequences of bankruptcy by hiring Debt Negotiation Attorneys instead.
Debt negotiation involves working directly with creditors to lower interest rates, reduce fees or decrease the principal balance in exchange for a lump sum payment. Some people try to do this on their own and are often quickly turned down by credit card companies that would rather charge late fees and penalties to a customer who is struggling to make their payment than to negotiate a settlement with them. An attorney can advocate on your behalf.
Debt Negotiation Attorneys are often familiar with the credit card companies’ policies and may even know the best person to speak to in order to negotiate a settlement. Without that inside knowledge, you may never get to talk to the person who has the authority to approve your offer. By allowing someone who is an expert negotiator to work with your creditors for you, you are more likely to see a favorable outcome.
While there are obvious advantages to settling your debts, there may also be disadvantages to debt negotiation. If you intend to settle your debts for less than your principal balance, the creditor may note the arrangement on your credit report. Credit card companies that lower the interest rate for customers may require them to close their account in exchange for the lower interest rate on their outstanding balance.
Taking action to lower your debt is always better than doing nothing and allowing your accounts to accumulate late fees and interest penalties. In addition to debt negotiation, there may be other options available to you to improve your financial state. An experienced debt negotiation attorney such as Ledford & Wu can explain your options and help you make the best decision for your unique financial situation. Follow us on Twitter for our latest updates!
