Debt Settlements
Debt settlement can be a viable alternative if you have non-exempt assets or prefer not to file for bankruptcy protection. However, consulting with the lawyers experienced in bankruptcy cases can provide valuable insights into whether this route is suitable for your situation. To settle a debt, we negotiate with your creditors to reduce the balance by 20% to 90%, depending on the circumstances.
The percentage reduction of each settlement varies with each creditor, and it is dependent upon many factors, such as your employment status, the value of your non-exempt assets, and the amount of equity in your house and other real properties. Consulting an Alhambra business law lawyer can help you understand how these factors may affect your negotiations.
As a general rule, creditors won’t negotiate with consumers who are current on their bills. They usually refuse to discuss settlement unless you are at least a few months behind in your payments.
Even if a debt is settled, please be aware that your credit score will be affected each time you settle a debt.
You also need to consider the tax consequence of the settlement. Money saved in a settlement is generally considered earned income for tax purpose.
Please consult your tax professional for your particular situation. Or call Lo & Lo LLP today if you have questions, our skilled attorneys can help.
Attorney Kelvin J. Lo
Kelvin J. Lo is a partner at the firm and head of the litigation team. Having been in the legal field since 2010, Kelvin has gained significant experience and a deep knowledge of the law, which he uses to achieve favorable outcomes for his clients. He represents individuals and businesses, large and small, in commercial litigation, real estate litigation, bankruptcy litigation, personal injury litigation, and employment litigation in both state and federal courts from the inception of disputes through litigation, trial, appeals, and the enforcement and collection of judgments and debts.
