A Straight Talk on Debt gives you the real deal on debt, straight from our employees and industry insiders. Learn more about our debt relief plans and important industry updates.
Depending on where you stood when you enrolled in a debt relief plan such as settlement affects what happens next. Know that if you were not paying your debts creditors may escalate collection activities and even file lawsuits. If you were current with your creditors when you began debt settlement, you will now be behind as the only way creditors agree to settle is if the accounts are seriously delinquent.
If allowed, creditors and collection firms may try to intimidate you into doing things that are not necessarily in your overall financial best interest by threatening lawsuits, so it's important to understand the process.
Your vulnerability to a lawsuit is based on certain factors;
* Were your accounts already delinquent when you enrolled in settlement?
* If so, how delinquent?
* How much do you owe the creditor?
* If the accounts have already been charged off then this may bring about more aggressive creditor activity sooner.
* Do you have any assets that a creditor might be able to attack?
* If so, you need to consider the likelihood that a creditor might try to use your assets for collecting their debt.
* Your attorney can help navigate the best course of action if a creditor files a lawsuit and makes threats against any of your assets.
You joined a debt settlement plan because you didn't have many other options. A debt management plan was not affordable for you, and bankruptcy is a last resort. If you're behind with payments, a lawsuit may occur, whether you are enrolled in a settlement plan or not. Two things to consider:
* By enrolling in a Debt Settlement Plan (DSP), you have a strategy for dealing with your financial situation because you are accumulating money to negotiate a settlement.
* Many creditors hold off on collection activities pending a potential settlement. Therefore, the threat of a lawsuit must be viewed in this context.
We have had great success in getting creditors to understand our clients' circumstances even after a lawsuit has been filed. With some creditors this is the most appropriate time to settle.
When you're behind on your payments, it should be no surprise that lawsuits can happen. It's important to be prepared and know what your debt relief options are.