Do You Really Need a Debt Settlement Attorney?

With so many debt settlement attorneys out there and each of them promises you to help you pay off debt by slashing your debt by 50%, 40% and sometimes even pennies on a dollar, it is really tempting to just sign the debt settlement program with them, get out of debt fast and start your debt free living.

However, the reality is it is not always that easy to pay off debt and the debt settlement attorney exists for one reason only – making money out of the credit card debt mess you created.

Every debt settlement attorney sets his own service fee on settling debt. For example, one of the debt settlement attorneys I know require you to pay upfront fee of $3500 and 10% of the total amount settled. And there’s also one debt settlement attorney that charges 4% of your total debt amount as his fee as well as the money for settling with your creditors.

Wow, a lot of fees involved, right? So, the question is do you really need a debt settlement attorney to settle your debt?

Before we get into that, let’s take a look at how the debt settlement works.

How does Debt Settlement work?

When you’re in huge credit card debts, can’t afford to pay off your debts in full, credit card companies may agree to settle your credit card debt, forgive or reduce your total debt by 50% or, in some cases, even much more, especially if you have already fallen behind on payments for months and you have 5-figure debt balance.

Why would credit card companies want to settle debt with you? If they feel there is a possibility that they will collect little or nothing at all if you file for bankruptcy, they are relatively willing to work with you, consider your financial circumstances and offer you debt relief by agreeing to receive only a fraction of what you owe on your credit card debt.

As a matter of fact, if the credit card company decides to sell your debt to a third-party debt buyer, such as a collection agency or junk debt buyers, they may receive as little as ten percent of the original amount owed. Therefore, it’s an obvious reason that your credit card company is willing to consider a reasonable offer to settle debt with you or your debt settlement.

With debt settlement, you do not pay what you owe, if you have $10,000 in credit card debt, you might get an offer of $5,000 or even $3,000 to settle the debt, depending on how long you have been on default. The longer your debt is, the more power you have in terms of settling your debt.

However, unless you are a professional negotiator or have enough knowledge on debt settlement and know how to negotiate and response to your creditor’s offer, you might be better of hiring a debt settlement attorney to settle your debt once for all.

The main thing you need to consider is the time and cost. If you have enough time to settle debt yourself, you can settle debt yourself. But, if you don’t have time and you see yourself facing a judgment against you, you need to hire a debt settlement attorney to take care of this before you realize your bank accounts being levied or wage being garnished.