Debt Settlement Negotiations
Debt Negotiation/Settlement
Sometimes our clients are not eligible or have too much income and assets, such that filing a bankruptcy is not in their best interest.
For these clients, we offer the services of our experienced and successful debt negotiators.
Historically we have been successful in settling our client’s debts between 15% to 50% of the balance owed at the time of settlement.
Before the settlements are funded, we prepare the paperwork to properly formalize the terms of the settlement.
While there are possible adverse Income Tax consequences, Debt negotiation and settlements may still be an attractive alternative to the client who prefers not to file bankruptcy.
FREQUENTLY ASKED QUESTIONS
What can your debt settlement program do for me?
Our Debt Settlement Program settles debts at a significant discount with a single lump-sum payment to creditors. Our unique, methodical, and automated approach to debt negotiation usually results in the satisfaction of all concerned. The debt settlement process has proven effective in rebuilding a much brighter financial future for consumers, saving them time and money in the process.
Who can enroll in the Program?
Our Debt Settlement Program is designed for consumers who are unable or struggling to meet minimum monthly payment requirements to their creditors and desire an option other than bankruptcy. We recommend the client have at least $12,000 in unsecured debt.
How much does the Program cost?
We project the average client will complete the program paying less than fifty cents for every dollar of unsecured debt owed, including our legal fees. However, individual results may vary. We generally request a $1,000 retainer and will bill against it at the current hourly rate.
When will the negotiation process start?
Upon retaining the Law Offices of Daniel A. Higson, client and creditor information is gathered into our database. Creditors are then notified that our office is representing you and request them to direct all further communications through our office. The notification also describes the Client’s current financial situation and explains our negotiation process. As you deposit sufficient funds into our settlement / trust account, settlement offers are submitted to creditors. As such, “starting negotiation” is completely dependent upon available funds.
Should I continue communicating with my creditors?
We prefer you not speak to your creditors at all. Most creditors use abusive collection tactics designed to illicit fear, shame, and guilt when communicating directly with consumers. In the event communication is unavoidable, clients are directed to advise the creditors that they are represented by our office. Once a creditor is notified, they are expected to communicate with you through our office.
Will the Program prevent creditors or collectors from contacting me?
Yes, for the most part. Creditors are notified of this representation and directed to communicate only through our offices. While most creditors abide by this notification, some may choose to ignore it and contact you directly.
Will collectors call me at work?
Federal and State laws prohibit collectors from contacting consumers at their place of employment (if they have been notified that the employer prohibits it). Use of our telephone response card will put the collector on notice, thereby reducing or eliminating future contact.
Will I continue to get statements and other correspondence from my creditors?
Creditors are directed to communicate through our office. However, you may still receive routine billing statements.
Will the Program stop interest and late fees?
Creditors may continue exercising their rights to apply interest and late fees. However, our office settles most debts for significantly less than the balance owed at time of settlement.
Will our Program stop legal action?
We are attorneys and can provide legal advice, but cannot prevent creditors from taking whatever action, to which they are legally entitled. However, our accurate knowledge of the legal process will assist our client to make informed decisions as to what response, if any, is appropriate. In the rare case a creditor does pursue legal action; we can represent you and at the same time continue to try to negotiate a settlement.
What type of debts can be included in the Debt Settlement Program?
Usually only unsecured debts. Certain other debts are excluded from the Program such as, federal, state and municipal obligation (i.e. government-backed loans, student loans, tax liens, parking tickets, and child support and alimony obligations).
What about my credit rating?
The primary goal of debt settlement is to eliminate unsecured debt and improve the debt-to-income ratio. If you are truly in a position where you are unable to consistently pay all your creditors as required, then your credit rating may already be suffering.
Credit ratings are determined by a consumer’s repayment history. However, credit depends on more than just a consumer’s credit rating. Loan officers often reject consumers with “A” credit ratings due to high debt-to-income ratios. We consider this ratio a top priority, making clients completing the debt settlement process more attractive prospects to future creditors.
The ultimate determination to approve or deny credit, as well as the accuracy of information reported to credit bureaus, is the sole responsibility of the creditor. As part of our settlement negotiation we request that the creditor report the account “paid as agreed”.
What is your current retainer fee?
Our current retainer fee is $1,000. We bill against these funds and provide you with an itemized monthly bill. You can cancel our services at any time if you are not satisfied with our performance.
GENERAL DISCLOSURES
NO WARRANTY: The Law Offices of Daniel A. Higson does not and cannot control the actions of any creditor with whom the client has creditor claims. As such, our offices, its agents, representative or service providers, make no express or implied representation, warranty, or guarantee, either verbally or in writing, directly or indirectly, that any plan of debt negotiation or mediation will succeed or produce any specific results.
IRS CODE 605P: Any indebtedness of $600 or more which is discharged as a result of settlement may be reported by the creditor to the Internal Revenue Service as taxable income pursuant to IRS CODE 605P and related federal law. If such report is made, the creditor must report it to the taxpayer.
CLIENT RIGHT TO CANCEL: Either party may terminate this Agreement at any time without cause, upon ten (10) days written notice. All monies paid by client for deposit into the settlement account will thereafter be returned to client as hereinbefore provided, and all other charges and fees will be immediately discontinued. Client understands that the retainer and administrative fees paid are non-refundable, and the fees due The Law Offices of Daniel A. Higson for obtaining a monetary compromise and for services already performed prior to receipt by us of client’s written notice of termination shall be deemed earned by us and shall be paid by client.
LAW OFFICES OF DANIEL A. HIGSON RIGHT TO DENY, SUSPEND, OR CANCEL:
The Law Offices of Daniel A. Higson reserves the right to accept or reject an applicant’s enrollment in the Debt Negotiation Program. In the event we do not accept the applicant’s enrollment in the program, the applicant will receive a full refund of all monies paid into the program.
CLIENT RESPONSIBILITIES
While participating in the Program, client agrees to:
1. Provide us with relevant records (including billing statements) regarding creditor claims and any information regarding client’s ability or inability to pay said claims in a timely manner as requested by the Law Offices of Daniel A. Higson or its service providers.
2. Accept and/or return all telephone calls from the Law Offices of Daniel A. Higson, its agents, or representatives within 48 hours.
3. Honor all client settlements as negotiated by the Law Offices of Daniel A. Higson. Agreement to any settlement may be approved in writing or by recorded conversation with the client.
4. Limit creditor communication. This may be accomplished by referring your creditors to our office.
5. Submit accurate information. Submission of false, erroneous or fraudulent information to the Law Offices of Daniel A. Higson is cause for termination from the Program.
Call 805-642-6405 to make an appointment for a free initial debt consultation.
en español (disponible pronto)