- 4 min read
- Debt is essentially a financial problem and work with experts in the field.
- However, if needed, consult a debt consolidation lawyer for a bankruptcy consultation.
- Learn about legal issues relating to debt, but for legal advice consult an experienced lawyer.
Debt Consolidation Lawyers - Isn't Debt a Financial Problem?
Debt and debt management is fundamentally a financial issue. Good financial management helps you decide when to take out debt and how to pay it back.
However, debt involves a contract between you and your creditor. The contract spells out your obligations and the terms of the loan, as well as the lender’s rights if you do not meet your obligations. Whenever there is a breach in the contract, then a potential legal issue arises.
Debt problems can have serious consequences. Delinquent bills can lead to court summons and public judgments with dire consequences including wage garnishments, bank levies, and liens on your personal property.
Debt Consolidation Lawyers: For Legal Problems
Many times, you can solve your debt problems by directly contacting your lender or creditor and working out a payment plan with their customer representative. Sometimes you need the aid of a professional. There are firms that specialize in financial advice and negotiations, including debt counseling and debt settlement firms. These firms specialize in setting up and negotiating payment plans or settlements. They do not specialize or generally offer legal advice.
When it comes to legal problems, seek the advice of a lawyer that specializes in consumer law and litigation. Debt consolidation lawyers are essential if you contemplate a bankruptcy, which is a complex, technical legal process.
Quick tip #1
It is important to understand your financial situation and get an opinion from experts in the debt consolidation field. Get a free consultation from one of Bills.com's pre-screened debt providers.
Questions to ask Debt Consolidation Lawyer
When it comes to legal questions, your best line of action is to consult with an experienced lawyer. Before you seek legal help, shop around, for a lawyer experienced in the particular field that your problem relates to, whether it is personal bankruptcy, consumer law, or divorce law. To choose a lawyer or find low cost legal aid, read the Bills.com article finding a lawyer.
Here are questions relating to a debt consolidation lawyer, in the areas of bankruptcy and collection laws.
There are two types of bankruptcy, Chapter 7, which discharges all qualifying debt, and Chapter 13, which is a court-supervised plan to pay off debts and stop collectors’ lawsuits.
Here are some questions for a bankruptcy lawyer:
- Should I proceed with bankruptcy? Do I have other options?
- What is the difference between Chapter 7 and Chapter 13?
- What are the consequences of bankruptcy?
- What happens if I don’t make my payments?
- What happens if the creditor continues to harass me?
- How much do you charge? Do I have to pay upfront fees?
- What happens if the bankruptcy is not successful, do I still pay?
Quick tip #2:
I recommend that you seek legal advice whenever facing lawsuit, court summons, or trouble with a creditor you feel is incorrectly pursuing a debt. Some issues that are complex include statute of limitations, collection laws, and debt responsibility in case of death or divorce. Here are some examples that a debt consolidation lawyer can help with:
- Is this debt past the statute of limitations? Do I have to pay it back?
- What should I do if I receive a court summons?
- What can I do about a collector who is harassing me and will not stop, even though I have sent them requests to do so?
- My relative left a will, but has more debts than assets? Do I have to pay for his debts? Am I responsible for his debts because I am the executor of the will?
- My ex won’t refinance the house, stopped payments, and my credit is going down. How do I get out of the loan? (It is best to ask that before finalizing the divorce).
- Can a creditor garnish my wages if I leave in one State and the creditor is another State?
Struggling with debt?
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q3 2023 was $17.291 trillion. Housing debt totaled $12.489 trillion and non-housing debt was $4.802 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
The amount of debt and debt in collections vary by state. For example, in Nebraska, 18% have any kind of debt in collections and the median debt in collections is $1972. Medical debt is common and 6% have that in collections. The median medical debt in collections is $653.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.