Leeds, AL—Debt settlement companies are often hired to settle a person’s debt. These companies are generally relied on by individuals who have accumulated more debt than they can repay but are looking to get their accounts settled and closed. For some, hiring a debt settlement company might be the last step they take before considering filing for bankruptcy and for others, it may just be a way for them to get out of having to pay back the full amount they owe to one or more creditors.
- Monthly payments will need to be made.
According to the FTC, if an individual hires a debt settlement company, they will likely be asked to pay a certain amount each month that will go into “an escrow-like account.” This is done to help save enough to eventually pay off a settlement once one is reached with a creditor. For example, if a debtor owes a creditor $10,000 and the debt settlement company is able to get the debt reduced to $6,000, the debtor will use the money they have accumulated in their account to satisfy this debt.
Once a debtor pays off the amount the creditor agreed to accept, the debt should no longer show up as a negative on their credit report.
- There are risks associated with hiring a debt settlement company.
According to the FTC, there are some companies that might ask a debtor to pay for an extended period of time before their debts are settled. While some may be able to successfully make all payments, others may not and in turn, don’t get all of their debts settled.
Another risk a debtor takes is not getting all of their debt settled. The FTC says creditors are not obligated to agree to a settlement and therefore, have the right to refuse a negotiation with the debt settlement company.
If an Individual in Leeds is Drowning in Debt, They Should Contact a Leeds, AL Bankruptcy Attorney
If an individual is facing a substantial amount of debt and has been warned by their creditors that a lawsuit is coming, they should contact Hill, Gossett, Kemp & Hufford, P.C. to speak with a Leeds, AL bankruptcy lawyer. An AL bankruptcy attorney can determine if an individual’s circumstances qualify them for bankruptcy and help them decide if they should file.
Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.
Hill, Gossett, Kemp & Hufford, P.C. can be reached at:
2603 Moody Parkway, Suite 200
Moody, Alabama 35004
Phone: (205) 640-2000
7900 Parkway Drive
Leeds, AL 35094
Phone: (205) 699-5500
6441 U.S. Highway 11
Springville, Alabama 35146
Phone: (205) 467-2225