Negotiate Debt Settlement On Your Own // Insider Tips From A Lawyer

Summary

In this video, Hannah from SoloSuit discusses strategies for settling debt with consumer rights attorney John Skiba. They advise against threatening bankruptcy, as it's ineffective and expected. Instead, they suggest painting a realistic picture of one's financial situation to persuade creditors to accept a settlement. The conversation covers the roles of creditors, debt collectors, and law firms in debt settlement, emphasizing the importance of understanding the negotiation process and the various parties involved.

Takeaways

• 🤔 The best approach to negotiate debt settlement is not by threatening bankruptcy, as creditors often expect it and it's ineffective.
• 💼 When negotiating, it's crucial to help the creditor see the value in your offer by painting a realistic picture of your financial situation.
• 📊 If you have a judgment against you, emphasize the limited options creditors have in collecting from you, like being on Social Security or having wage garnishment.
• 💬 Be transparent about your financial hardships and other creditors to show that bankruptcy might be a realistic option if they don't settle.
• 🏦 If you have tax debts or liens, mention them as they take priority over private debts and can affect the creditor's ability to garnish your wages.
• 💡 Understand that negotiation is a back-and-forth process; be prepared for counteroffers and adjust your strategy accordingly.
• 📉 Don't make an offer that's too low; it should be reasonable relative to the debt amount to be taken seriously.
• 👥 Be aware of the different players involved in debt settlement, including creditors, debt collectors, and debt law firms, each with their roles and decision-making processes.
• 📚 If the debt goes to litigation, you'll typically negotiate with the debt law firm, which will then seek approval from the creditor or debt collector.
• 🚨 Before a debt is sold or charged off, you might deal with in-house collection people or collection agencies hired by the original creditor.
• 🌐 For more help on debt settlement and resources, consider visiting SoloSuit's website, which offers tools and guidance to help you navigate the process.

Q & A

What is the common question people ask about debt settlement at SoloSuit?

The common question people ask is 'how much should I offer to settle my debt?'

What is the role of a consumer rights attorney in debt settlement?

A consumer rights attorney helps to negotiate with creditors and debt collectors to settle debts for less and provides guidance on how to approach the negotiation process.

Why is threatening bankruptcy not an effective strategy in debt settlement negotiations?

Threatening bankruptcy is not effective because it is often anticipated by creditors and debt collectors, and they usually have it factored into their calculations.

What is the importance of painting a picture of the debtor's situation during negotiations?

Painting a picture of the debtor's situation helps the creditor understand the reasons to accept the proposed settlement offer, especially if the debtor is currently judgment proof or facing other financial hardships.

How does having a wage garnishment or other lawsuits affect the negotiation process?

Having a wage garnishment or other lawsuits can be used to show the creditor that the debtor is facing multiple financial obligations, which might make bankruptcy a realistic option and thus encourage the creditor to settle for less.

What is the significance of mentioning tax debts or liens during debt settlement discussions?

Mentioning tax debts or liens is significant because they take priority over other debts, which can limit the creditor's ability to garnish the debtor's wages, thus potentially leading to a more favorable settlement.

Why is it important to understand that there will be a counteroffer in debt settlement negotiations?

Understanding that there will be a counteroffer is important because it sets the expectation that the negotiation process involves give and take, and it prepares the debtor for the back-and-forth nature of the discussions.

What is the typical process for debt settlement involving multiple parties like creditors, debt collectors, and law firms?

The typical process involves negotiating with the law firm representing the creditor or debt collector. The law firm then goes back to their client for approval, which can involve multiple rounds of back-and-forth communication.

Why might a debtor not be successful in negotiating directly with the original creditor during the early stages of debt collection?

In the early stages, the original creditor might refer the debtor back to the attorney handling the case, as they are not yet in a position to negotiate settlements directly.

How does SoloSuit assist individuals in dealing with debt collection lawsuits and settling debts?

SoloSuit provides resources and products to help individuals respond to debt collection lawsuits and settle their debts outside of court, empowering them to represent themselves in resolving their debts.

What additional resources does SoloSuit offer to help individuals with debt-related issues?

SoloSuit offers a blog with resources and answers to common questions, as well as products designed to assist with debt collection lawsuits and out-of-court debt settlements.