Today I had a reader ask me if she needed to hire a bankruptcy attorney to pursue negotiated settlements on her credit card debt. I thought it might be helpful for me to post the answer for everyone.
A bankruptcy attorney is not required to call your creditors and discuss a negotiated settlement, however, every person’s financial picture is different and debt settlement is just one option among many. I found that the attorney, if only for a one hour consultation, was very helpful in taking me through all of my options so that I could make the best choice for me. Also, in the settlement process itself, though I did most of the negotiating, I found it helpful to be able to say on the phone that I had a bankruptcy attorney, it seemed to make them take me more seriously, and I did like having someone to look over my settlement agreements since I had never done that before. While The Do-It-Yourself Bailout does give a very detailed picture of what the settlement process looked like from my perspective, I still say there is no substitute for professional advice. Many bankruptcy attorney will consult with you for an hour or two at a very reasonable fee.
Tags: bankruptcy, credit card debt, debt negotiation, debt settlement
I have basic question. Does settlement always mean an upfront payment? At this point, we have a load of debt due to my husband’s long term disability of 3 years in addition to trying to finance a business and my own day job’s 25% paycut. Pretty much a nightmare like everyone else (not to mention supporting children and paying a large mortgage in CA). I would go down this route if I could settle but I do not have enough money saved to make a lump sum payment. Thanks for your response.
Hi. Many readers are asking your very question. I just posted a new entry to my blog to discuss it. “Can you settle your credit cards even if you don’t have any money? http://settleyourcreditcards.com/blog/?p=38
All the best, Kenny
Finally, someone else who has done this. I have been reading your blog and wishing that you had been around when I started my settlement journey. One of the things that I am reading and agreeing with you on is the many benefits of having a bankruptcy lawyer on retainer while traveling down the road of debt settlement. I too had a Bankruptcy lawyer on retainer when I started debt settlement. Although for me, it was a bit different as I had every intention of filing (a dreaded chapter 13, darn the means test) until the wife and I realized that we could possibly find another option.
Best of luck with this site and your book,
EarnIt
Hi, thanks so much for writing in. Feel free to share stories and insights here any time. Everyone’s stories are unique and they all help others with their own debt settlement process. All the best, Kenny