Are you eligible for debt settlement?
Many people approach debt settlement attorney’s or debt settlement law firms, without understanding whether they are eligible for debt settlement in the first place or not.
If you are in debt and have been contemplating debt settlement as an option to debt free life, what you need to understand first is which debts can be settled and which cannot. Depending on your situation and which debts actually qualify for debt settlement you may understand whether debt settlement as a potential strategy, will work for you or not.
What kind of debt can be settled?
The type of debt that qualifies for debt settlement is unsecured debt. When you say ‘Unsecured debt’, it means a kind of debt that is not tied to an underlying asset, like a house or a car. Examples of unsecured debt are, credit card debts, unpaid medical bills, and other such personal loans which need to be settled.
An unsecured debt can be a problem for the creditors too because in case of non- payment, there is nothing that can be sold off to recover the unpaid amount. In the case of an unsecured debt, the creditor has very little recourse outside of filing a lawsuit to recover the amount owed. This is why, often creditors of unsecured debt are more willing to come to terms with debt settlement because, this allows them to get at least a part of the payment in lieu of a situation where they might get nothing at all. Also debt settlement is a far less expensive method than going to court.
Which types of debt cannot be settled and which cannot?
- In most cases of debt that is secured by an asset, does not usually qualify for a debt settlement or at least the creditor will not easily agree to a case of settling the debt. In such a case, the creditor usually does not to a settlement lesser than what is due because if they cannot recover the unpaid amount they would sell off the property/car or valuable that is mortgaged and recover their money. Home loans and auto loans are the most common kinds of secured debts for settling which you will have to have a lot of communication with your creditor and convince them why you need to have debt settlement.
- Every debtor needs to realize that loans guaranteed by state and federal governments, like the SBA loans and student loans, are not at all eligible for eligible for debt settlement. If you have a good rapport with the creditor, then you could get your student loan consolidated or forgiven, but debt settlement does not happen in this case.
- Child support and alimony cannot fall in the category of loans that can be settled. You might get a reduction in payments if you opt to go to court, but this does not still allow you to settle on amounts due from the past.
- You cannot expect to settle overdue taxes in the Federal, state or even local levels. If there is an error in calculating the tax, on the part of the Government for which you can give a proof of then you can claim the money.
You may want to talk to a debt settlement attorney before you actually opt for any debt settlement in order to figure out whether you are actually eligible for debt settlement. If you have your doubts regarding whether you are eligible for debt settlement, then you can explore other options for minimizing your burden.
In this regard you might want to get in touch with well known debt settlement attorney Shah Peerally for further advice. You can check out his website for more details on debt settlement http://yourdebtsettlementattorney.com/