When it comes to debt settlement, many debt collectors are willing and ready to enter into debt settlement agreements with consumers who owe their clients’ money. It does not matter if your debt is in collections, or whether you are being actively sued for the debt.
In certain situations, some debt collectors have been willing to settle with consumers whose wages or bank accounts are already being garnished. These situations are rare and are typically only available to consumers that are working with an attorney on their financial situation.
In cases involving wage or bank garnishments, the Law Office of Brent M. Myer, PLLC advises working with an experienced attorney as these cases can become very complex. Brent M. Myer, PLLC will ensure you are exercising all of your rights available under Florida and Federal Law.
A majority of large creditors have dedicated collections departments, or they may outsource these functions to another third-party collection agency and possibly an attorney’s office. These agencies are responsible for the constant phone calls, emails, lawsuits and other means possible to initiate contact and to collect the outstanding debt for their companies.
The Law Office of Brent M. Myer, PLLC has negotiated a number of settlement agreements on behalf of debtors in Florida. Below you will find his thoughts and concepts to consider when it comes to debt settlement on the Treasure Coast of Florida. Here is what you should know about debt settlement!
Items to Consider Prior To Signing Your Debt Settlement Agreement
- Review your agreement. Settlement agreements drafted by the creditor or their attorney will generally be most favorable to the creditor as opposed to the consumer.
- Be sure to ask questions regarding the potential tax implications.
- Under a debt settlement agreement, you will be admitting to the legitimacy as well as the amount of the debt being collected. Most unrepresented consumers run into problems surrounding this statement.
- A debt settlement agreement may re-start the clock on the stature of limitations for collecting on the debt.
- The debt settlement agreement may include a Waiver of any claims you may have against the creditor as well as their collectors and attorneys. These claims typically involve illegal collection practices. You will be waiving your right to bring about any future lawsuits against them for these violations associated with your case.
- Often debt settlement agreements do not address how the debt settlement will be reported to the credit bureaus.
- A debt settlement agreement also may include a Waiver of exemptions. Exemptions are rights to protect certain types and amounts of property under state and/or Federal law. The Law Office of Brent M. Myer, PLLC does not recommend signing such a waiver prior to consulting a lawyer.
- The Head of Household exemption pursuant to Florida Statute 222.11(2)(b) is an exemption which the Law Office of Brent M. Myer, PLLC does not recommend waiving unless upon the advice of an attorney.
Debt Settlement is not something to take lightly. If you are just seeing the above information for the first time, the Law Office of Brent M. Myer, PLLC recommends seeking a consultation with an attorney prior to entering your debt settlement agreement on the Treasure Coast of Florida.
Debt Settlement Red Flags & "No-Nos"
- No debt settlement agreement should be a verbal contract. The Law Office of Brent M. Myer, PLLC recommends having everything in writing. When an agreement is in writing, you can review and make any corrections prior to signing the agreement.
- Do not sign a partial agreement. It is not recommended to individually piece together multiple sections, amendments or revisions as separate documents.
- When referring to the contract, it is recommended to have the debt referred to as “disputed” wherever possible rather than admitting to the full terms of the debt.
- Remember to ask for and obtain the specific representations of tax implications as well as the credit reporting implications. While this information may be difficult to obtain without legal representation, it is important to try to receive this information.
- Do not sign a General Liability Release regarding the prior conduct of the debt collector.
- Many debt collectors will attempt to have you sign the Florida Statute 222.11(2)(b) Waiver as part of any debt settlement agreement option they offer you. This Waiver is a specific form for an individual to waive his/her right to claim the head of household exemption to wage garnishment in Florida. Do not sign this Waiver.
- If you do not feel comfortable with the agreement, DO NOT SIGN IT and consult an attorney.
- Many creditors will use the fire sale urgency tactic to have consumers agree to an offer such as “today only” or “right now only”. Creditors use this tactic to convince consumers to agree to unpopular terms against your best interest.
For the above-mentioned reasons as well as countless others, the Law Office of Brent M. Myer, PLLC highly recommends that individuals strongly consider seeking professional help to negotiate any settlement agreement. Many individuals, intending to do right by following through with their financial obligations enter into debt settlement agreements only to realize they have been taken advantage of by use of terms which they did not fully comprehend.
Debt Settlement Stuart, FL
Brent M. Myer can help you formulate a fair and comprehensive agreement.
Most importantly, the Law Office of Brent M. Myer, PLLC is here to help you consider all terms and conditions for the debt settlement agreement in which you are about to sign. Give yourself the opportunity to receive a settlement agreement that benefits both you and your creditor.
The Law Office of Brent M. Myer, PLLC provides services all along the Treasure Coast. Call today to book your free consultation (772) 873-7794.
Debt Settlement: Pros & Cons To Consider
While negotiation of a settlement that is less than what you may owe may sound great, it does come with both pros and cons. Here are the main advantages and disadvantages of this strategy:
Advantages of debt settlement:
- Repay less than you owe on your debts including the current principal, interest and fees.The most popular benefit is that you will likely pay less than when you owe, and once your debts are settled they are gone for good.
- If you work with a debt settlement company, they will take care of many of the tasks involved in this process for you.Debt settlement companies will make phone calls, negotiate with creditors and deal with the details of your debt settlement on your behalf.
Disadvantages of debt settlement:
- Not all debts qualify for debt settlement.Debts such as car loans, home loans, and federal student loans do not qualify for debt settlement. However, most types of unsecured debt can qualify. Other debts that do not qualify are child support, gambling debts, and back taxes.
- Debt settlement can result in damage to your credit score.Due to the fact you will most likely be asked to stop making payments, you may see some damage to your credit score. In addition, settled debts will be reported to the credit bureaus as “settled” rather than “paid in full.”
- It may result in tax consequences.Some settled debts may be considered taxable income unless you are “insolvent.” The FTC notes that insolvency typically describes a situation where your total debts are worth more than your assets. This may sound clear-cut, but they report that insolvency is difficult to determine and prove.
- Creditors are not required to settle with you.Unfortunately, creditors are not required to settle your debts. Creditors may sue you while attempting to negotiate a settlement of the debt.
- Debt collectors may continue pursuing you. Unlike bankruptcy proceedings, debt collectors are not legally bound to stop collection calls during debt settlement processing.