When to Hire an Attorney to Negotiate Your Debt

Debt negotiation is a highly individualized process, meaning that what will aid one individual may not prove beneficial to another. In practice, debt negotiation will go much more smoothly with the intervention of an attorney, but in reality, an attorney may not be able to provide the results that warrant the cost of hiring the attorney in the first place. The following article outlines certain scenarios, which may be applicable to certain debtors, when hiring an attorney to negotiate outstanding debt obligations may prove beneficial.

When an Attorney Can Help

• If outstanding debt obligations, in general, are causing a debtor to lose control of his or her financial standing, he or she should contact an attorney about debt negotiation or reduction. What amounts to financial instability is a highly personal decision, but in certain cases, such as outstanding debt obligations related to homeownership or vehicle ownership in jeopardy of foreclosure or repossession, a debtor most likely will want to seek outside help. While secured debts such as home loans and auto loans are less likely to involve drastic renegotiations, the reality is that slight alterations or modifications with the lender may alleviate financial pressures placed on the borrower.

• If outstanding debt obligations are related to medical expenses, a debtor may consider consulting with an attorney to negotiate these debts. While medical treatment expenses are notoriously expensive, the reality is that the average American would be financially ruined by any form of emergency or prolonged medical treatments. The reality of medical treatment debts is that these debts are unsecured; meaning if push came to shove, a debtor could declare bankruptcy and the entire amount would likely be discharged. In turn, settling unsecured medical debts through using a lawyer will likely result in drastic reductions in the amount owed.

• Similar to the category above, unsecured debts related to consumer spending, such as credit cards and other revolving credit lending instruments, are a good candidate for negotiation through using legal counsel. These debts are also unsecured, and if past due long enough, may already be held by other debt collection companies with incentive to negotiate a settlement for drastically reduced amounts.

• Another thought for debtors: If a creditor has employed illegal tactics in attempts to collect a debt, using legal counsel may prove highly effective. Not only will it  stop illegal collection actions in their tracks, but in certain cases, may influence the right of a given company to take any further collection actions at all. Without legal counsel though, the average consumer loses the leverage illegal collection actions may provide during a debt settlement negotiation.

Getting Legal Help with Debt Negotiation

In reality, debt settlement may not necessarily provide the results a given debtor desires. Having legal counsel to inform a given debtor about the reality of his or her debt situation, versus their initial expectations, is important. While most debts can be drastically reduce through negotiations, the reality is that the credit history and financial implications of a given debt settlement scenario may prove less than ideal. Furthermore, certain debts are likely non-negotiable, depending on the circumstance. For these and other reasons, such as the long and short-term implications of any attempt to settle a debt obligation, a debtor should consult with a debt negotiation lawyer.