Your credit may not be negatively affected by using the debt attorney. If your credit accounts are in good standing when you start using a debt settlement program then your credit scores could go down. However, you shouldn’t start a debt negotiation program with an attorney until your credit has already gone bad. By the time you have hired the attorney to settle your debt you should already be behind on your bills. Not paying your bills in general will have a negative impact on your credit score, so the damage to your credit report should have already happened prior to hiring the attorney.
The Negotiating Power Of A Debt Settlement Attorney
The good news about the debt collection industry is that the collection agency only makes money when a debt is collected. They have a lot of motivation to settle debts quickly. They know that they may not have another chance or ever. The creditor’s biggest fear is that it could be a long time before they have another chance to collect or that the debtor will file a bankruptcy and never collect on the note. Often you can get the creditor to report a “paid as agreed” as part of the debt settlement process. Remember that they want to collect from you and are afraid that you can file for bankruptcy. You actually have some negotiating power. Keep in mind that credit card companies have billions of dollars worth of debt that will never be collected. Sometimes something is better than nothing. The creditor really doesn’t want to take you to court. Going to court is expensive. Even if the creditor wins a judgment against you in court they still have to collect it. This is where it gets tricky for them. It can sometimes cost just as much to collect on the debt as it did to go to court. This is why they may take less from you. The creditor doesn’t want to have to go through the effort.
This Article is designed to be of general interest and should not be considered legal advice.The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.
