In practice, trying to settle a debt or going to court is not an “either/or” situation. In many cases, it’s best to do BOTH. If the creditor has already filed a debt collection lawsuit, there is no choice about “going to court”. But, that doesn’t mean you should stop trying to negotiate. In addition, while negotiations are often aimed at avoiding going to court, sometimes, litigating is the only way to fight for a debtor’s rights. This is one reason to hire experienced debtor-focused attorneys — like those at Guardian Litigation Group — who have deep success as BOTH debt settlement attorneys and debt collection defense litigators. One thing to remember: just because you have been sued does NOT mean the creditor “wins.” Debtors have their “day in court” too and, often, can present formidable defenses.
Why Debt Settlement is Worth Considering
The first benefit of hiring debt settlement attorneys is that communications with your creditor now go through your attorney. So, no more calls or letters, which can be stressful to deal with, even if the letters and calls are not threatening and/or harassing. Second, your lawyers — having deep experience with debtor’s rights — can offer legal advice on ways to defend against the debt collector’s efforts. For example, a creditor cannot make efforts to collect or file a lawsuit if the debt is more than four years old in California. This is a legal defense called the “statute of limitations.” A good debt settlement negotiation lawyer can identify this defense and use it during negotiations. Other defenses may be available, too, depending on the facts of your case.
Ultimately, the goal of debt settlement is to resolve the debt problem. Some creditors may agree to a reduced lump sum payment to settle the debt entirely, while others might prefer a manageable monthly payment plan. In some cases, it may become evident that a settlement isn’t possible, and alternative solutions—such as bankruptcy—should be considered.
Why Would Creditors Settle for Less Than the Full Amount?
Many debt collectors are NOT the original creditors. Rather, they are companies that buy debt for pennies on a dollar. For those types of creditors, the “economics” favor a settlement that is for less than the full amount. As an example, assume the original debt was $1,000 for medical services. For the medical facility, it is “easier” to bundle a bunch of “bad” debt files and sell them all for 10% of the total and then continue doing what they do best — which is to provide medical services. Now, one debt file in our hypothetical bundle of files, the debt collection company has spent only $100 for what is $1,000 worth of debt. So, the “profit/loss” of the debt file is that the debt collection company makes a profit by accepting any settlement higher than $100. Of course, they are not going to accept $101, but they might take $200. Obtaining an accurate assessment of what kind of debt collection company is involved is another important reason for hiring a debt settlement attorney.
Contact an Experienced Debt Settlement Negotiator Today
For more information, contact the Debt Settlement Attorneys at Guardian Litigation Group to schedule a consultation today. We can help if you think debt settlement negotiations are the right option. Our mission is to provide unparalleled legal services and support for those being crushed by their debts and harassed by their creditors. We also have the tools and experience you need to help defend a debt collection lawsuit and if you need assistance with bankruptcy. We can be reached via our contact page or by phone at (949) 444-5474.
