Debt Negotiation vs Bankruptcy - Law office of Justin M.Myers
Debt Negotiation vs Bankruptcy - Salt Lake City bankruptcy attorney carry the knowledge and skill to ensure the lowest settlement amount. Call 8015059679.
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Debt Negotiation vs Bankruptcy

Posted by: admin | On Jul 13, 2017
Debt Negotiation vs Bankruptcy

Filing for bankruptcy isn’t always a viable option for every debtor’s situation. Bankruptcy has the benefit of halting all debt collection communication immediately but this also means having to rebuild credit from scratch. Debt negotiation helps to rebuild credit by paying off debts at a faster rate and for a lower amount. A Utah bankruptcy attorney can look at the entirety of the situation and determine the best option for your case.

Benefits of Debt Negotiations

There are several benefits to negotiations for both the creditor and the debtor. Creditors are more willing to negotiate debts when there is a Utah bankruptcy attorney involved. This also ensures the creditor will be repaid as opposed to a bankruptcy case in which they will never be paid. Creditors would prefer some money instead of no money. The creditor may also negotiate that once the debt is settled the account will be closed. For the debtor, the bankruptcy attorney in Utah will communicate with all creditors to reduce the total owed by 50% in some cases. The payments will be arranged over a specific time period which will alleviate the pressure of constant phone calls and will help improve your credit score. The process can be time consuming and will at first lower your credit score until an agreement has been reached. Most individuals are able to repay their negotiated debt within 24 months.

Rebuilding After Bankruptcy

Bankruptcy can stay on a credit report anywhere from seven to ten years. This can impact the ability to obtain new credit which can leave you stagnant for some time. The reason behind this is that creditors see you as more of a risk. Creditors lend out money when they know they will be repaid. When a debtor has new credit, they are taking a high risk with lending. Debtors can rebuild credit after bankruptcy by starting slow with a small credit card and working up from there. You should also make on time payments and keep balances low. A good rule of thumb is to pay off your credit card each month, on time and maintain a zero balance. Upon filing for bankruptcy once, debtors will become ineligible to file again for at least eight years.

Tips for Debt Settlement

The best option when conducting debt negotiations is to start low and aim high, take notes and start saving money. Salt Lake City bankruptcy attorney carry the knowledge and skill to ensure the lowest settlement amount. They will often start with a lower number and work their way towards that 50% goal. Even though many creditors will allow debtors to make monthly payments toward settlements, some will negotiate a lump sum. You will need to be prepared for this option by having allocated funds or begin to save the moment you begin negotiations. A bankruptcy Utah attorney will inform you of this outcome prior to negotiations. Nothing is legal or official until it is in writing. During every phone call or communication, make sure you are taking detailed notes and when possible have them send you information in writing through email or postal mail.