If you are dealing with overwhelming debt but you are looking for ways to avoid bankruptcy – debt settlement may be an option for you. Debt settlement is an agreement between a lender and a borrower to pay back a portion of a loan balance, for which the remainder of the debt is forgiven. However, one of the most common questions debtors have about debt settlement negotiations is what percentage they should offer. Our New York debt relief attorneys break it down for you below.
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Debt Settlement Negotiations
When it comes to debt settlement, every case is unique. In some cases, debtors can cut their balances by as much as 50% to 70%. In other cases, debtors don’t get a debt reduction and only an extended payment period. However, it is not uncommon for creditors to settle for half of your outstanding balance. Before determining the best course of action when entering a debt settlement negotiation, you should speak with an experienced debt relief attorney.
Developing a Strategy
Debt settlement negotiations require strategic planning to ensure that you achieve a favorable outcome for both parties. Your settlement offer should be something you can reasonably afford on the outstanding debt you owe – but you should also ask yourself if it is something a creditor is willing to accept. For example, suppose you owe $14,000 to a credit card company, you might wish to offer a one-time payment of $7,000. This may be a favorable debt settlement for creditors because they would be able to collect a significant amount of the debt in a lump sum.
Get the Guidance You Need
Although negotiating with your lender may seem daunting, with the right team and knowledge, you can achieve a favorable outcome. Our team at Jacovetti Law, P.C. has helped individuals and businesses across New York, Connecticut, and Pennsylvania obtain a favorable debt settlement. We have the knowledge and experience needed to help you obtain financial freedom.
Contact our debt relief attorneys today at (516) 217-4488 to schedule a consultation!