Debt is a problem that is all too common in the country today. Many people are facing debt, and many people are struggling to repay it. If you’ve fallen behind on your monthly payments, you probably looked into various ways to decrease your burden. Part of this process is negotiating with your creditors. Some people use a debt settlement company as an intermediary between yourself and debt collection agents. While debt settlement companies may seem convenient, they rarely have your best interests at heart. In most cases, it’s better to utilize an Ohio debt settlement attorney when negotiating potential resolutions.
Keep in mind that some debt settlement companies employ lawyers to make their services appear more reputable. These companies and their legal teams will still be more focused on their bottom lines rather than yours. So it is important that you are careful when deciding which Ohio consumer law attorney to hire.
At Luftman, Heck & Associates, we will assist you with every aspect of the debt settlement process, striving for the best possible result. The settlement process is complex. The numerous complicated laws that govern debt make it easy for your rights to be violated. Talking to the right attorney is the best way to keep that from happening. To schedule a free, initial consultation with a Columbus debt lawyer today, call (888) 366-5537 or fill out our online form.
What Is Debt Settlement?
The first thing to consider when looking for a debt attorney is how debt settlement works. Essentially, debt settlement is an agreement between you and your creditor. Such agreements are usually only entered into if it seems unlikely that you’ll be able to repay the entire amount owed. For example, if you’ve fallen significantly behind on your credit card debt, you may have trouble paying the whole balance. In that situation, a creditor may accept partial payment, rather than nothing. A successful settlement will result in you owing less than the original amount of your debt. You can pay this lower amount back as a lump sum, or work out a new payment plan.
Do I Need An Attorney for Debt Settlement?
While a lawyer is not strictly necessary for debt settlement, it may be in your best interest. Debt settlement is a negotiation, and you’ll want someone pursuing the best deal possible. With a debt settlement company, this is not always the case. The idea behind settlement companies is they have an existing relationship with debt collectors. This, in theory, will make the negotiations easier, and allow them to get you a better deal. The reality is that these companies are just as concerned about their relationship with the creditors as they are with your settlement. Furthermore, some debt settlement companies charge upfront fees. If negotiations fail, you will owe those fees in addition to still being in debt.
Consolidation is Also an Option During Debt Settlement
Debt consolidation combines debts you owe to different creditors or collection agencies. Under normal circumstances, you would pay all those different creditors separately. Under consolidation, you would combine all your outstanding debts into one payment. As with debt settlement, there are companies you can enlist to help with your debt consolidation. These consolidation companies are subject to many of the same issues as settlement companies. In many cases, it is more beneficial to hire an attorney when dealing with both debt settlement and debt consolidation.
How Will Debt Settlement or Consolidation Affect My Credit Score?
If you’re in a significant amount of debt, it usually shows up on your credit reports. When you pay a debt off, it will generally be marked on your credit as “paid in full.” If you successfully settle your debt, on the other hand, it will be classified as “settled.” Any time you don’t pay the full amount of a debt, it will count against you. This means there will most likely be some sort of negative effect on your credit after debt settlement. Your settlement attorney will be able to show you precisely how your debt is changing your credit score.
Benefits of Having a Lawyer Help With Your Debt Settlement
Talking to a lawyer before proceeding with your debt settlement can help in a variety of ways. For one thing, settlement companies are only focused on settling. This may not always be the best option for your situation. An effective lawyer will assess all your possibilities. It often makes more sense to go another route, such as filing for bankruptcy.
A lawyer will also defend you if a collection agent pursues a lawsuit. Negotiations may break down, and the creditor may decide to sue you to collect your outstanding debt. If you hired a debt settlement company, there’s nothing they can do to help you face the lawsuit. You may even be stuck with additional fees for their unsuccessful settlement efforts. However, an attorney can continue representing you should settlement negotiations turn into legal action.
A lawyer can also make sure your rights are not being violated during the settlement process. Section 4710 of the Ohio Revised Code, also known as the Debt Pooling Companies Act, governs what debt settlement companies are allowed to do. For example, there are limits on how much such companies are allowed to charge for their services. Using a lawyer rather than a settlement company will make it easier to ensure your rights are left intact.