Debt Settlement

We are experienced in settling debts. We analyze for all legal leverage from specifics of your personal judgment, how hard it would be to garnish you, whether all of your assets are protected, bankruptcy options, counterclaims, and other possibilities. We offer flat fee services with legal contingency plans should the creditor refuse to settle at a rate that makes sense for you.

Debt Settlement

Successful debt settlement is about leverage. Without leverage, there is little reason for a creditor to settle with you and if they do settle, it will be for a much higher amount. With leverage, you will likely settle for a much lower amount. While every debt can also be solved via litigation, bankruptcy, and out of court options, sometimes debt settlement is the right option..

Our focus, when we take your case, is to analyze your situation for the following factors to determine your points of leverage and determine a reasonable range of settlement based upon the unique interaction of the facts of your case and your personal situation:

Are your assets (home, car, savings, etc.) protected or are they exposed? If not, can we move them into a protected status prior to negotiation beginning?
Is your income protected or is it easily exposed? Can we protect it prior to negotiation beginning?
Can we protect any cosigners? This usually only applies to car or student loans and tenant scenarios.
Is there a litigation option such as objecting to evidence, asserting common law defenses, or filing counter claims or plaintiff suits? As they say, the best defense is a good offense.
Are there cost effective techniques to where it is more expensive to pursue you in court than to take a settlement? Typically yes.
Are you bankruptcy qualified and could discharge the debt? This does not mean you have to file, it just means could you file? Creditors always do this analysis (whether you would file or not) so we need to as well.
Is there an appeal or report to authority that might resolve? This could be a complaint to a medical board, the police, or to the attorney general.
Is there a social media or social pressure angle that might resolve?
Is there a charity or forgiveness program that might apply? Medical debts can be discharged or reduced via charity care, Gofundme might be an option, applying for loan forgiveness, etc.
Are there other out of the box options that might apply? Examples would be moving out of country, going into an all cash profession, structuring your personal life so as to avoid partner liability, etc.

Once we establish your leverage points, we look to see who your opposition is to understand their investment in your case, their potential loss, and their potential gain:

Original creditors are facing a total loss on the file but know they can only sell the debts for around .05 to .10 on the dollar on the secondary market and can also get a tax write off
Debt buyers usually pay only .05 to .10 on the dollar to purchase debt but must also pay a certain amount of overhead to service and pursue the debt
Collection agencies only care about their fees and whether they collect on a contingent or flat/hourly basis impacts their decisions along with any advancement of costs. They may be limited by agreement on what they can accept as a minimum amount of settlement based upon their client (the debt owner).
Law firms are focused on their fees, not getting sued for consumer protection violations, avoiding malpractice suits, and not angering their clients (so as to lose a whole book of business). Legitimate counter claims are their worst nightmares, particularly if their actions are in part the basis of the counter claim.

Once we understand each party’s motivations (the debt owner, the collection agency if applicable, and any law firm that is involved) and we understand the leverage points we need to use, we create a reasonable range of settlement and also a comparative analysis of what resolution would look like under a litigation, a bankruptcy, an outside of court model. That way you can compare the numbers of each solution and let the numbers help you make your decision.

Settlement range really depends upon leverage. If there are legitimate counter claims, rather than a settlement meaning you pay them it becomes them paying you. If there are not counter claims but you have good leverage, it could be anywhere from .10 to .40 on the dollar. If you have little to no leverage settlements are often in the .60 to .80 range. Most settlements fall somewhere in the middle with a reasonable assumption of .50 on the dollar. There are many stories on the internet where everything can be settled for .10 on the dollar. That simply is not the mathematics of the industry. We will do our best to find every leverage point and bring in any settlement for the lowest possible amount and provide contingency options in case a settlement cannot be reached. We will explain in plain English from a return on investment perspective with realistic scenarios.

If you would like to settle one or more debts or to understand how other options to resolve would work, call us for a free phone consultation. 206-535-2559.