Tampa Debt Settlement and Bankruptcy Attorney
Everyone needs to take on a little bit of debt at some point in their lives, but it can quickly become unmanageable. When you cannot repay your debts, creditors and debt collection companies may file a lawsuit against you to garnish your wages, levy your bank account, and more. Debt settlement and bankruptcy are two options that can help you avoid these consequences, but neither is an easy process. Below, our Tampa debt settlement and bankruptcy attorney explains further.
What is Debt Settlement?
Debt settlement is a process that can help you avoid filing for bankruptcy. During a debt settlement, you agree to pay a lump sum for a smaller amount than what is currently owed on the debt. You and the party you owe money to both sign an agreement and they cannot take legal action against you afterwards. Many creditors and debt collectors will not accept less than 75 percent of a debt during a settlement and so, you do need access to an amount equal to the lump sum. For many people, this means leveraging the equity in their home with a second mortgage or a home equity loan.
It is important to work with a debt settlement attorney when negotiating a debt settlement. Many people are not familiar with negotiations, which can make them overwhelming and intimidating. A lawyer will be well-versed in these types of negotiations and can negotiate a fair settlement on your behalf.
There are some risks associated with debt settlement. If even just one creditor refuses to settle, you could still owe them the full amount even if your other debts are reduced. Additionally, if you have taken out a home loan and cannot repay it, you may face foreclosure and the possibility of losing your home.
What is Bankruptcy?
Bankruptcy provides a way to discharge your debt or to redistribute it into a repayment plan that extends between three and five years. A Chapter 7 bankruptcy will discharge your debt so you are no longer responsible for paying it, while a repayment plan is drafted during a Chapter 13 bankruptcy.
Bankruptcy often has many benefits over debt settlement. For example, if one of your creditors does not agree to a settlement, a bankruptcy repayment plan can force them to agree to certain terms. Additionally, Florida has some of the most generous exemptions in bankruptcy, meaning that most people who file bankruptcy in the state can keep their home.
Like debt settlement, on the other hand, bankruptcy does also have some drawbacks. For example, bankruptcy will appear on your credit record and so, your credit score will drop for a period of time.
Our Debt Settlement and Bankruptcy Attorney in Tampa Can Determine which Option is Right for You
Debt settlement and bankruptcy are two options that can help you eliminate your debt. At HD Law Partners, our Tampa debt settlement and bankruptcy attorney can advise you on which process you are eligible for, and help you decide which one is right for your situation. Call or text us now at 813-964-7878 or chat with us online to schedule a meeting with one of our attorneys who will review your case for free.