Debt Negotiation Financial Program
Helping You Out from Under Your Debt
Our team of bankruptcy lawyers in Boca Raton, here at the Klein Law Group, is ready to assist individuals who are dealing with substantial debt. We specialize in helping you swiftly eliminate problematic debt without increasing your monthly payments. How do we do this? Through our debt negotiation services, which are designed to secure the best possible deal with your creditors.
This approach allows you to fully pay off your debt, rather than being stuck with never-ending minimum monthly payments or having to resort to bankruptcy. Our experienced attorneys employ a proven debt negotiation strategy that provides creditors with the motivation to agree to a mutually acceptable debt settlement arrangement.
How it Works
Imagine you owe $25,000 in credit card debt to five different creditors. Our attorneys will talk to your creditors and let them know about your financial difficulties and your plan to settle the debt. The timing of this depends on how late you are on payments and how much money you have for settling the debt. In the beginning, most banks won’t agree to settle.
This process doesn’t happen overnight. It might take 5-6 months or even longer to reach an agreement. Let’s say three more months go by, and during that time, you’ve saved $2,000 in your settlement fund (that’s $500 each month because you stopped making regular payments to your creditors).
What comes next? One of your creditors decides to accept a 50% settlement, but you have to pay the full $2,500 within 30 days. You have the $2,500 from your settlement fund, so your attorney gets a written offer from the bank, shares it with you, and you send the payment to the creditor. Everything is documented carefully for your protection.
So, what’s the result? You paid $2,500 to clear $5,000 of debt, saving $2,500. After five months, your total debt is $20,000 instead of the original $25,000. You’ve reduced 20% of your debt in just five months!
Moreover, you’ve changed from an ongoing situation to a closed one. That $5,000 debt would have kept growing, but now it’s settled for $2,500, and once you pay it, you’re free from that debt forever!
Each debt is negotiated separately, based on your budget. The other creditors are informed when it’s appropriate, encouraging them to cooperate. They’ll have to wait their turn.
Let’s do some math to see how long it would take to clear the whole $25,000 of debt this way. If we cut each debt in half (50% settlements), you’d have $12,500 left. If you have a budget of $500 per month, it would take a little over two years to become completely debt-free without paying more each month than your previous minimum payments.
Will Debt Negotiation Work for You?
The debt negotiation strategy is not for everybody. But for those who qualify, it’s a no-nonsense financial recovery program that makes good sense.
The list of questions below will help you decide whether or not you should consider debt negotiation:
1. Do you have a legitimate financial hardship condition?
This will usually take the form of loss of income, medical condition, death of a family member, divorce or separation, loss of child support payments, or some other serious event that caused a severe financial setback. It doesn’t always have to be drastic but there should be an identifiable circumstance (or set of circumstances) that got you into financial trouble.
2. Are you committed to avoiding bankruptcy?
Just about every debtor who tries to negotiate with a bank threatens bankruptcy. A proper debt negotiation strategy will take the opposite position by promising that bankruptcy will not be filed if the creditor agrees to a workable arrangement. This promise is essential to the process.
3. Do you owe more than $7,500 in unsecured debt?
If your debt level is much below that, it becomes unrealistic to apply negotiation strategies at the aggressive level we’ve outlined above. Discounts can still be obtained and favorable arrangements made but frankly, major reductions in debt are much more difficult to obtain. A level of $20,000 to $50,000 is more typical, although there is no fixed rule. It also depends on the exact nature of the debt and who the creditor is.
4. Are your debts primarily from credit cards?
Debt negotiation is particularly effective when dealing with different kinds of debts, but it works best with credit card debt. You can often get significant discounts and have the most success when negotiating with credit card companies.
Other types of debt, like store charge cards, financing agreements, and various bills, can also be negotiated, but the outcomes might not be as predictable.
When it comes to medical bills, they can often be negotiated successfully, depending on the specific situation.
However, student loans usually can’t be negotiated because they are federal loans, and the government can collect what you owe from your tax refund.
Auto loans can be refinanced to potentially get better terms, but the amount you owe typically can’t be reduced.
As for mortgages, there are ways to prevent foreclosure, but you’ll still be responsible for paying the full amount you owe on the loan.
5. Is your monthly budget up to the job?
All the best intentions in the world won’t help if you have nothing to offer your creditors. A good rule of thumb is that your monthly budget should be around $150-$200 for every $10,000 of debt. So if you owe, say, $30,000 total, then your monthly budget should be around $450-$600. However, you get the best results if you have a lump sum of cash from the start.
6. Do you have additional resources to work with?
Even if you can only manage a small monthly amount toward debt reduction, are there other resources at your disposal? Examples include cash-value insurance policies, borrowing from family, or even the sale of unneeded household items. Is there other property you could sell to raise capital?
If you’re ready to move forward with debt negotiation, we ask that you:
#1: Don’t talk to your creditors.
Only one person can negotiate your debts for you. If you only allow the attorney to handle some of the phone calls while you handle other calls yourself, the odds are high that you will say something that is not in your best interest, thereby undermining your attorney. Your attorney knows exactly what information to disclose, when to disclose it, and when to withhold information.
#2: Delay sending more money to your creditors until they settle on a mutually-agreeable sum.
Successful negotiation of your debts will require a reasonable compromise with your creditors. It’s important that you save as much money as possible each month for your attorney to work with.
If you are in a condition of financial hardship, committed to avoiding bankruptcy, owe more than $7,500 of credit card debt, and have some resources to work with, then you should definitely give serious consideration to the debt negotiation strategy.
Call Our Boca Raton Office Today
To see whether you qualify for this program, just give us a call at 561-353-2800. We offer a FREE consultation with no obligation.