Credit Card Reductions – Debt Reduction Lawyer for Credit Cards

• Bankruptcy Solutions
• Foreclosure Solutions
• Modification & Negotiation
• Credit Card Debt Relief

Approach – Warning of Potential Bankruptcy / Litigation Options –  

In every negotiation we need to inform a creditor why we think an offer is to their advantage. Given our concentrations in bankruptcy and litigation defense, it is realistic for us to inform creditors of these more drastic options and why they will potentially help our client and hurt the creditor. It is reasonable for us to avoid these more drastic measures as long as the creditor agrees to a fair negotiated settlement.

Other Hardship Factors We Want to Incorporate into Our Negotiations –

 In approaching creditors we need to advocate any hardships that our clients have encountered, reduction of income, health issues, marital problems, business failures, job loss and/or large necessary expenditures to explain our clients situation and need for a negotiated settlement. We also want to stress our clients limited income and lack of equity in their assets. The goal is to sell the creditor on the settlement offer as their best chance to recover part of their debt.

Techniques of a Settlement- 

We can make several different offers where the variables are: 1) the amount down (a full partial payment is a lump sum); 2) the amount of installments,  3) the amount of  time to pay the debt, 4) the amount due at the end and 5) the amount of interest or late fees factored in with payments. These factors affect the terms of the negotiations and the ultimate settlement. Our agreements typically entail no interest or late fees going forward and a reduced principal balance; typically there is no large payment at the end and the main factors that are bargained over are the amounts of the partial principal that are paid and over how much time they are paid.  Below are the various agreements:

          a. Lump Sum Agreements – The more the client can pay upfront the better the discount. Therefore the largest discounts are typically when the client can pay the entire discounted offer to pay the debt at once in one larger lump sum payment.

          b. Installment Agreement – Where the client does not have the ability to pay upfront, we need to negotiate over how much time they have to pay the discounted principal of the debt and over how many payments. Typically the shorter the period of the installment agreement, the better the discount. Most creditor prefer payment plans that go for 1-3 years, but this is a term that can vary greatly based on the creditor involved. 

          c. Hybrid Agreement – Here, there is an incomplete lump sum payment and the rest of the partial payment is made over time. The idea of the larger first payment is to make the creditor comfortable with entering an agreement where the installments will take time to pay.

          d. Several Alternative Offers May be Sought and Evaluated  – Typically we go back and forth and make and/or receive up to three offers which we evaluate for resolution. There are diminishing returns when one does not act on offers after several have been made and/or received. There is a need to seize on potentially good offers after they are made since they are typically retracted if they are not finalized. Sometimes an offer is less than ideal but is the best option under the circumstances. We will evaluate all offers with our clients to assess them in relation to the client’s goals  and circumstances and alternatives.

Finalizing the Debt Negotiation with a Settlement Agreement and Other Final Documents –

         a. Settlement Agreements – When we have settled with a creditor on the terms of an agreement we would need to draft and/or review a settlement agreement that lays out these terms with precise detail, including what would happen if the agreement does not go as planned and if the client is late with payments. Typically we also negotiate noticing provisions, default warnings and situations where it may be difficult or impossible to comply.  The settlement agreement when it is finalized needs to be signed by all parties in front of a notary.

         b. Satisfactions – Especially where there is a judgment, a satisfaction of judgment document needs to be prepared when the client has fully satisfied the settlement agreement. The satisfaction document is filed with the court to show that the judgment is fully paid and needs to be vacated.

         c. Lien Release – Where the creditor has a lien agains the client’s property, which can be a judgment lien, or a voluntary secured lien or a mechanics lien, a settlement agreement should also reference and entail a lien release document being prepared and filed to release the lien against the client’s property.

Why Use Our Office for Credit Card Debt Reduction?

Our broad range of tools to resolve debt allow us to have leverage in negotiations that most companies, accountants, consultants and lawyers negotiating debt do not have. Because we can also litigate debt and file a bankruptcy case to deal with debt, in case negotiations do not work for us, we have fallback options and therefore we have negotiating advantages in case the negotiated option does not work. However because of these options it is more likely that the negotiations to reduce the debt would work much better than without them. Besides the above our negotiators sharp and experienced and have either completed or are in the process of completing higher level education and/or law school. Finally, because we are a law office we can resolve matters in a legally binding manner, where the creditors don’t later renege or unilaterally alter or breach a settlement agreement.