Articles Posted in Settlements

I recently had to answer a law suit filed by Chase on behalf of my client that we are doing debt negotiations on. The answering of the suit will likely buy us 3-4 months to make any payment and hopefully come up with a better offer then what they had initially proposed. I’m wondering if the reason they sued my client so quickly is because they pulled her husbands credit report and saw that he had settled all of his accounts within the last 18 months. I settled 200,000 dollars worth of debt to about 55,000 with him and had just started to work on his wifes account. Chase sued her within 2 months of me starting on her case. Unfortunately this was the biggest account at around 20k of the 50k she had in debt. What we’ve now done is worked out 30% settlements on 2 other cards which saved her 14,000 dollars and we will pay off one other card next month when she has money. This will now leave only Chase to deal with and hopefully after my affirmative defenses and denial that I wrote to their complaint, they will come down to something more reasonable than the 65% over 3 months they tried to get which was not doable. We’ll see if fighting the case against them and making them spend resources and time instead of the typical default judgment that they get will ruffle their feather enough to come down to 40%. It will at least buy us some time so she can come up with larger payments. Sometimes you have to fight these things and that is why having an attorney by your side instead of a debt settlement company is the way to go. The crazy thing is I charge less than most of the debt settlement companies out there. Talk to a riverside county bankruptcy/debt settlement attorney if you have been sued or need financial representation in dealing with your creditors

According to the new FTC Telemarketing Sales Rule debt relief companies who receive inbound calls are also now prevented from receiving up front fees until a debt is settled. Many debt settlement companies charge upwards of 15% and charge this before anything is paid to your creditors. Meanwhile your interest rates are rising, late payments are accumulating, and other fees are being asessed. Essentially there will be no frontloading payments only to have you sued by creditors inevitably unless you can pay quick enough on a settlement and depending on your assets a company might not want to settle. Unfortunately many companies do not truly look into whether debt settlement is the right option and consumers are constantly bombarded by advertisments of promises to settle at 50% of what is owed and saving their credit. Typically by not paying your credit cards for months on end you will be offered a settlement to pay as a lump sum, you end up with late payments and settled for less than amount owed on your credit report for 7 years. While its true that bankruptcy stays on your credit report for 10 years, by the time you settle all your credit cards if you have a lot of debt it will take 2-3 years and then it will be reported for 10 which is virtually the same thing.

Fortunately debt negotiations will still be a viable alternative for a bankruptcy attorney to review since attorneys aren’t making telemarketing calls or receving inbound calls from advertising. Clients that meet with a debt relief agent in person are not subject to the rule but some will still try to charge up front fees that are egregious fees, this at least stops the deceptive phone campaigns that are being waged across the country. I do believe in debt settlement for some people which is not a popular position amongst bankruptcy attorneys as many have seen the perils that it has had on clients who have wasted their money only to end up in the same situation but with much less of a fresh start. I understand that but also see it as a tool for people who have access to quick funds through a new business or have the ability to get a loan from family and who might otherwise pay more over a long Chapter13 plan.

The new rules ensures that companies disclose tax consequences associated with debt settlement, stops them from using bad statitstical data on past successes by not including drop outs and other important considerations, and makes sure they explain the time it will take based on current payments and other important disclosures. These are all things that I have been doing and assessing with any client that considers having me negotiate with their creditors. Debt settlement can be a risky venture to take although it can be very worthwhile if done right and should come with a list of disclosures and verifable statitics that can be enforced through fines and penalties assessed by the FTC. It is a good day for consumers and hopefully this will direct some of the people who really should be considering filing for bankruptcy instead of being lured into a false illusion of debt settlement based on small savings and 3 years plans that often fail. Talk to a qualified riverside bankruptcy attorney to see if debt settlement is a viable option and then learn about bankruptcy.

Hunt and Henriques seems very trigger happy to sue but not so diligent in taking care of their lawsuits. If you have been sued by Hunt and Henriques or recently received a summons, there are several options available. You can file a chapter 7 or chapter 13 bankruptcy. You can try to negotiate with them before they get a judgment and most likely can get 70% settlement on what you owe. You can fight the lawsuit and hope they don’t follow the local court rules which isn’t as unlikely as you’d imagine. This is a major debt collector structured as a law firm, but one that is hard to get a hold of and one that doesn’t necessarily show up with the right documents to court.

A chapter 7 bankruptcy if you qualify will wipe out the debt completely. A chapter 13 will allow you to pay pennies on the dollar or if you have a lot of assets or money at least stretch your payments over 3-5 years depending on your income level. Hunt and Henriques is the biggest collector for Citi and if you spend any time trying to get a hold of them you will see why I believe optimism should prevail in the fact that you’ve been sued by a debt collector who doesn’t follow through with all their cases.

free_606999.jpgAdvising a debtor on who to settle with first can be a daunting task, but with the right advice from an experienced attorney, I can make the choices easier for you.

I find that Bank of America is a good creditor to take care of first, once you are 90-120 days behind as they usually give one of the better settlement offers from the beginning. I have settled many accounts with BofA with settlements of 20-35% and will usually not advise a client to pay any more with them.

Other accounts such as Discover, Capital one, Target can be higher amounts and I see settlements in the range of 50% more often than not. I also know who is likely to sue and when and am able to give you a clear timeline as to how much you’ll need to save to make this work. Debt settlement companies are loathe to explain all of this to clients and would rather take your money and have you drop out and file bankruptcy with no regard to the position that it leaves you in. I will be clear with you from the start and if you cannot afford debt settlement or I don’t believe that it will work for you based on your assets, ability to pay in a reasonable time etc., then I will give you other options and am always willing to allow $500 dollars that you pay towards debt settlement to go as a credit toward filing bankruptcy.

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