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If you're like many consumers and small business owners, you've steadily accumulated loan and credit card debt over the years, thinking you'd be able to pay it off once economic conditions improved. But debt has a funny way of hanging around, and your situation can go from manageable to overwhelming seemingly overnight. If you're contending with thousands of dollars in outstanding loans or credit card debts and are just barely making your minimum payments each month, it's time for you to take charge of your financial future. Don't be afraid of what the cost of debt settlement might be.
You've probably seen slick ads from debt settlement lawyers online or on TV. The pitch never varies: Debt settlement lawyers can save you thousands of dollars and forestall the unpleasant side effects of being in debt, like threatening calls from creditors, repossessions, damaged credit scores and potential bankruptcy filings.
But before calling one of these attorneys and scheduling a consultation, you'll want to investigate the exact cost for a lawyer for debt settlement. You might not like what you learn.
For a group of people who say they work for the common man, debt negotiation lawyers are a surprisingly hard-to-reach bunch. Before you even walk through the door for your initial debt consultation, you may be asked to pony up a "consultancy fee" of five percent of your total outstanding debt for the privilege. If your credit card bills and loan balances total $20,000, you'll need to part with $1,000 before that initial meeting. That's a lot of money you probably don't have.
At this first consultation, your debt negotiation attorney will lay out a manageable payment plan that usually aims to have your obligations completely paid off in three or four years. Then they'll begin negotiating a favorable settlement with each of your creditors. Around 70 percent of the time, they'll be able to reach an agreement that saves you a significant amount of money--up to 50 percent of your total debt in some cases.
That kind of success doesn't come cheap, and it doesn't happen overnight. For each month your account is open over the three to four-year duration of your debt settlement program, your lawyer may charge you a $50 "maintenance fee" just for keeping your account open. This fee is fixed no matter how much you owe.
Even if your program successfully ends in 36 months, which is by no means assured, you'll be out $1,800 in these fees alone. If you're one of the 25 percent of lawyer-led debt settlement clients who, mostly out of frustration with its high costs, drop out of the program before successful completion, you'll be unable to recover these monthly payments or the aforementioned five percent consultancy fee.
Assuming you do successfully complete your repayment program, you'll be on the hook for the biggest single payment yet: a "success fee" equivalent to 25 perent of the total amount your lawyer was able to save you. That's $2,500 on $10,000 of savings.
What exactly is the cost for a lawyer for debt settlement? Let's say your attorney was able to negotiate a $10,000 settlement on an initial debt of $20,000, split between various unsecured obligations like credit card bills and personal loans. Between the $1,000 up-front consultancy fee, $1,800 in total monthly fees, and $2,500 for the final success fee, you'll be out $5,300.
That's 53 percent of your settlement. In other words, if your case is typical, your lawyer will walk away from your three to four year debt settlement program with more than half of the money that you saved in his or her pocket!
There's a way to avoid these outrageous costs: Debt settlement through consolidation, which bypasses expensive lawyers without compromising service or results and can save you 50 percent or more on your debts.
If you're considering using a lawyer, remember that creditors would rather settle your debts for a less than what you owe than watch you file for bankruptcy and get nothing at all. You don't need an attorney to negotiate for you. The credit relief professionals at NationalRelief.com can get you the same results at a far lower final cost.
Unlike debt settlement attorneys, NationalRelief.com's trained credit relief professionals don't charge any up-front fees. You won't have to pay anything out of pocket until you see real results.
Any of your unsecured debts are fair game for debt settlement negotiations. The typical program will take 24 to 48 months, meaning you'll be debt free in about the same amount of time as you would have been had you retained a lawyer, and at at a fraction of the cost. Call today or take a few minutes to fill out the convenient online form to schedule a free debt analysis and begin rebuilding your credit today!