Debt settlement

What is Debt Settlement?

Debt Settlement is an alternative to Bankruptcy.  Chapter 7 and Chapter 13 bankruptcies are Federally based legal ways to eliminate or reorganize your debt problems, however, bankruptcy is not always the right solution. Debt Settlement is often an easier and less painful step than Bankruptcy.  Saunders Law Group can handle your harassing creditor calls and stress – you focus on saving enough money to allow us to negotiate low settlements.


When Should I Consider Debt Settlement?

Debt Settlement often makes sense when bankruptcy is too expensive or too painful. The following scenarios are times to choose Debt Settlement instead of Bankruptcy:

You Have Too Many Assets: If you have equity in cars, property, cash, stocks, RV’s, motorcycles, etc…, it may be the case you have “too many assets” which we can protect (where you can keep all of your assets) in Bankruptcy.  In California you can have approximately $23,500 in assets and $75,000 – $150,000 in equity in your personal home.  If you have more assets than we can protect, the Bankruptcy Trustee can sell some of your assets and give the proceeds to pay creditors.  Let’s use Debt Settlement instead so you can keep all of your assets

You Make Too Much Income: If you make too much money you will not “qualify” to file a Chapter 7 Bankruptcy.  A Chapter 7 Bankruptcy is the type of Bankruptcy where all of your unsecured debt (credit card debt) is discharged (forgiven).  If you make too much money to qualify for a Chapter 7 Bankruptcy you may file for a Chapter 13 Bankruptcy.  A Chapter 13 Bankruptcy is the type of Bankruptcy which reorganizes and repays a percentage of your debt based upon your budget.  Such a repayment happens over 3 – 5 years.  Many prefer Debt Settlement rather than the onerous terms often associated with a Chapter 13 repayment plan.

You Are Ineligible for Bankruptcy: If you previously filed a Chapter 7 Bankruptcy you are ineligible to file an additional Chapter 7 Bankruptcy until eight years after the earlier filing.

You Are Opposed to Bankruptcy: You may not believe in the theory of the fresh start and/or forgiveness of debt within Bankruptcy and would rather settle your debts.  Debt Settlement allows us to negotiate with your creditors so your obligation to them is paid for less than the full amount owed.  Your credit report will say something to the effect of “paid” or “paid as agreed” or “settled.”


How Does Debt Settlement Work?

If you have credit card debt, medical bills, or repossessions, these debts are ideal debts for Debt Settlement.  If you pay the minimum due on credit card debt it may take decades to pay the debt down to 0.  The vast majority of your minimum payments are applied to interest, which is why your balances decrease only slightly.

We will represent you before your creditors.  When your creditors call demanding payment – you refer them to us.  We take the heat.  Your creditors will realize we are also Bankruptcy Attorneys – they will know if we file Bankruptcy for you they will get nothing.  This gives us leverage as we negotiate your debts. Having Attorney represent you brings results!


What We Can Do For You

Saunders Law Group is your partner when you need us.  We analyze what is best for you – there is no “one size fits all.”  If you are best served with Bankruptcy – we will tell you.  If you are best served with Debt Settlement – we will tell you.  We are a full service law firm that offers customized services for whatever is best for you.  We will map out a strategy for you and represent you every step of the way.  We are capable of settling many types of debts, including credit cards, Home Owners Associations, taxes, and Second Mortgages.

Credit Card Settlements

Credit Card Debt is the most common form of debt.  Once you have credit card debt it is often difficult to service the debt – or pay the debt to 0.  The reason is simple: it is very easy to get credit, but much harder pay it back.  If you pay the minimum monthly payment, depending upon the interest rates, it can take as long as 20+ years to pay your credit card debt to 0.

When you engage us to settle your debts we will use our knowledge and experience on your behalf.  Not all creditors negotiate the same – some creditors look for a quick/low settlement while others will seek longer term payments.  Some creditors sell your debt to debt buyers who may sue you for the total debt.  It helps our position in representing you that we practice Bankruptcy.  The creditors know we are also Bankruptcy Attorneys and if we file Bankruptcy for you – the creditors will most likely get 0.  This motivates them to work with us for a settlement you will agree with rather than filing Bankruptcy.

Second Mortgages

If you have a Second Mortgage you may be able to eliminate it through a Chapter 13 Bankruptcy or Debt Settlement.

If you ignore your Second Mortgage you may be personally liable for the entire amount.  It is best to hit the debt head on.  Your Second Mortgage holder will know that we may file Bankruptcy for you.  They will probably be willing to settle for something you can afford rather than forcing you to file Bankruptcy where they get 0.

Tax Settlement

Tax debt is debt that arises out of money owed to the government, and can take many forms. One common form is income tax debt, which can arise when not enough money is withheld from your paycheck, and the IRS or State tax entity comes after you for the difference. Another type is property tax, where the taxes on property you own go unpaid.

All taxes are owed to some government entity, so when you are trying to settle your tax debt, you are negotiating with the government. This is a daunting task, made even more daunting by the fact that most tax debt is not dischargeable in bankruptcy. As a result, it is hard to create that fear that you need to create to get a good settlement, or any settlement at all.

Further, government tax entities can take the same, and sometimes more, actions to get paid as common creditors, including wage garnishments and lien on your home, car and bank accounts.

There are, however, some weak spots in the government’s armor, namely that as their claim begins to age, it becomes dischargeable in bankruptcy. So, the name of the game in tax settlement is seasoning the claims to the point where bankruptcy becomes a viable threat that can be made.