Arizona Lawyers Offering Debt Relief Guidance
Hiring a consumer credit counseling, debt consolidation or debt management service can be an effective way to deal with debts that have gotten out of control. The debt management service will contact each of your creditors and ask them to participate in the program, which may or may not entail lowering interest rates. The debt management service will then collect payments from you and disburse the money to creditors on your behalf.
Debt management can be a good option if you can make payments on the principal debt but are struggling to keep up with interest charges. One word of caution: you will need to ensure that the due dates of your credit card bills or other unsecured debt payments are adjusted to match the dates on which the debt management service makes payment. Too many times we have seen people fail to take this relatively simple step, only to rack up hundreds or thousands of dollars in late fees.
The Debt Settlement Process
Debt settlement is a slightly different process. Debt settlement companies will collect monthly payments from you — for example, $500 per month for a period of three to five years. During that time the company will attempt to negotiate a settlement with your creditors on your behalf. The advantage is that you may end up paying only 20, 30 or 40 cents on the dollar. The disadvantage is that debt settlement takes a long time, and there is no guarantee of success.
One of the risks inherent in any of these alternatives to bankruptcy is that creditors will have to be patient. A creditor could technically decide to sue you at any point during the credit counseling, debt consolidation, debt management or debt settlement process.
At Clark Law Offices in Phoenix and Mesa, you can discuss all your options with an experienced attorney in a free, no obligation and no pressure consultation. Contact us today to schedule an appointment.
Our offices are conveniently located in Phoenix, just south of the Biltmore, minutes from Hwy 51, and in downtown Mesa.
