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A Debt attorney is a specialist professional that many debt help organizations use when they are working to get people out of serious debt problems. Some entire law firms specialize in debt settlement, whereas other companies employ debt attorneys as part of their team of staff. There is a need for legal professionals who understand all the particular laws relating to the settlement of debt, as this is a complex and constantly changing field. It also adds weight when dealing with your creditors for them to know that they are dealing with an experienced attorney.
It is very easy to get into debt, either through changes in your personal circumstances, or just a gradual reliance on credit that builds up over a period of time until it is unmanageable. This is what happens to thousands of people, so it is important to understand that you are not the only one and that you should not feel bad about it. For many people, the situation is unavoidable, but the main thing is to recognize when you are in that position and seek professional help as quickly as possible. Delaying action where debt is concerned is never a good thing, because debts tend to grow if the problem is left unchecked.
Your first of all need to understand a bit about the types of debt help that are available and which route may be the most appropriate for your situation. If you have a steady income and enough money to spare to make a reasonable monthly payment towards your debts after paying your essential household bills, you may well be suited to a debt management plan. This is also known as debt consolidation, but should not be confused with consolidation loans, which are rarely a good idea. If your situation is more drastic and you cannot afford enough for realistic repayments, you may need to look at debt settlement. This is the alternative to your only other option, which is bankruptcy. Let us first take a look at how debt management and debt settlement work.
A debt management plan is set up by a specialist debt advisor, who will approach all of the people you owe money to, with the intention of coming to new arrangements for repaying what you owe them. This means they will try to get agreement to reducing your interest rates and hopefully writing off or reducing any other charges or penalty payments that have been applied to your account. By doing this with all your creditors they can propose a payment plan for you which will involve you making a single monthly payment to the debt company, instead of lots of payments to all your creditors. This payment will also be for a smaller amount than you were paying for your combined debts.
Debt management therefore gives you the benefit of paying out less each month, as well as the simplicity of having to keep track of only one payment. For this to work you need to have unsecured debts to a few different creditors and a steady source of income.
Debt settlement is intended for more serious situations, where you only other option would be bankruptcy. People who use this option are typically struggling to make the repayments due, have probably missed some payments and do not have enough income for a debt management plan to be viable. They are usually looking at bankruptcy as an option too. What debt settlement does is seek to write off a large part of your debt, so that you can repay only a fraction of what you owe and be forgiven the rest.
This is a very specialist area, hence the use of debt attorneys in this field of work. The general process is that you stop making payments to your creditors and the settlement negotiators start to work at reaching settlements with them. The intention is to write off at least half of your debts and the incentive for creditors in agreeing to this is that they normally get paid the remainder in a lump sum, or at least fairly quickly.
Do not worry if you do not have a pile of cash stored away, most people obviously do not. The main way around this are that instead of paying anything back to your creditors you keep making payments into a holding account instead, where you money is saved up ready for when settlements are reached. The other option is for the settlement company to advance the money and you repay them over a period of time.
It is important to choose carefully when looking for a company to help you get out of debt, as not all organizations advertising their services can be trusted to be honest or to do a good job. You should always apply to more than one, and you should take care to avoid the less reputable ones by approaching only those that are known to be well established and effective companies. You can apply quickly online and they will then contact you to go through your situation in a bit more depth.
You can find a list of some of the best organizations for debt management and debt settlement on the main Debt Programs page of this site.
Your home may be repossessed if you do not keep up repayments on a mortgage, loan or any other debt secured on it. Think carefully before securing other debts against your home.