Debt Settlement – Alternative to Bankruptcy
Debt Settlement is often a helpful alternative to federal bankruptcy relief. Bankruptcy is not for everyone. If you’ve already received a bankruptcy discharge and are not yet eligible for another, or if you simply don’t wish to file for bankruptcy for personal reasons, debt settlement may be the answer to your overwhelming debt problems.
Debt Settlement involves the 1) negotiation of debt settlement terms with your creditor, 2) drafting of a settlement agreement for both parties (debtor and creditor) to sign, and 3) fulfillment of the duties outlined in the debt settlement agreement.
Because debt settlement is a voluntary arrangement, your creditors do not have agree to settle your debts. But if your debt payments are past-due more than 60 days and the debt has not be reduced to judgment, it is very possible that your creditors will be willing to negotiate a settlement of your debts.
A Bankruptcy Attorney Gives You the Leverage that You Need in Your Negotiations.
If you’re behind on your debts and are interested in settling them, your creditor will want to try to collect as much as possible from you. But this is all about perspective. As a bankruptcy attorney, I can offer that perspective by explaining the alternatives to the creditor to convince them that your debt settlement offer is the best outcome available, all things considered. When you have an attorney negotiating debt settlement on your behalf, the creditor knows that you’re serious, which may lead to a more productive negotiation.
Common Terms in Debt Settlement Agreements.
Among other terms, we need to identify the proper parties to the agreement – who is the owner of the debt with authority to negotiate the settlement? If you’re dealing with the original creditor, this is easy enough to determine. But if you’re negotiating with a subsequent debt purchaser or collection agency, we must verify the debt’s chain of title to avoid you paying the wrong party.
If the creditor agrees to forgive or waive some portion of the debt, that waiver, if in excess of $600.00, becomes cancellation of debt income which may be taxable to you. I will try to help you avoid that outcome. A bankruptcy discharge does not result in cancellation of debt income, and so this issue is important to consider when deciding whether bankruptcy or debt settlement is right for you.
Other terms that are important to a successful settlement of your debt include, without limitation:
- Recovery of your fees and costs for enforcing the settlement agreement;
- Dismissal with prejudice of any pending collection lawsuit against you;
- Proper reporting of the settlement on credit reports;
- Full and complete release of any and all claims against you; and
- Choice of law and jurisdiction for any disputes concerning the debt settlement agreement.
St. Louis Debt Settlement Attorney
To find out more about bankruptcy and debt settlement, call (314)721-2525 or contact us online to schedule a free consultation with me, Nancy Stokley Martin, a Missouri debt settlement attorney. I will be here to answer all of your questions and give you trustworthy legal advice. I offer a 30-minute initial consultation free of charge during regular business hours. The law office is located at 150 North Meramec Avenue, Suite 400, St. Louis, Missouri 63105, where we offer private and convenient parking.
I help people in St. Louis, St. Charles, Chesterfield, Ballwin, Creve Coeur, Maryland Heights, Ladue Manchester, Kirkwood, Webster Groves, Wildwood, Bridgeton, Fenton, Eureka, Ellisville, Des Peres, Clarkson Valley, O’Fallon, St. Peters, Clayton, Olivette, Warrenton, Florissant, Hazelwood, and Frontenac. This includes the municipalities within St. Louis County, St. Charles County, Jefferson County, Franklin County, Warren County and Lincoln County.