In this article, you can discover:
- The eligibility and requirements for debt settlement
- What could happen if a creditor sues you
- How a debt settlement is paid
How Does The Credit Card Debt Settlement Process Work In Maryland and Virginia?
In Maryland, creditors have three years to file a lawsuit to collect on credit card debt. In Virginia the statute of limitation is five years. After that point, they lose their legal right to do so. This three-year period begins on the date when debt is incurred or on the last day of payment, when the debt first became delinquent.
Debt settlement in Maryland can involve negotiating with your credit card creditor to reduce the balance you owe. You may also reduce what you owe through a repayment plan or lump sum payment.
Would A Creditor Accept A Lower Balance?
Creditors are motivated by the prospect of actual repayment from their debtors. As such, creditors will often accept a lower balance, a repayment plan, or a lump sum payment to get their money back. As the debt gets older the amount of the settlement offered can be reduced. For example, if the debt is more than three years old in Maryland, you could offer the creditor 10 – 20% in order to settle the debt and improve your credit score. So, even though the creditor cannot collect on the debt the debt may remain on your credit report and if you settle the debt your credit score will improve.
What Types Of Debts Can Be Settled For Less?
It is possible to settle certain debts for less than the total amount owed. This can include medical debt, credit card debt, personal loans, car repossession balances, home foreclosure balances, or credit union debt.
What Are The Criteria To Be Eligible For Debt Settlement?
Debt settlement is an option for people who are behind on their credit card or loan payments. The only criteria provided is that you have delinquent payments. If you are late on payments, a debt settlement attorney can work with creditors on your behalf to negotiate a reduced amount.
Where Do People Get The Money For Settlement Purposes?
Debt settlement can be a great way to get out of debt, but how do people come up with the money for settlements? Sometimes, people may take out loans from family or friends, inherit money, or withdraw funds from retirement accounts. Others may simply use their regular income to make payments. Some people contact debt settlement companies that can charge large fees for their debt settlement services. Here’s how to works: You enroll in a settlement program through a debt settlement company.
They create a monthly payment that you pay to them, to gather the funds you need to make settlement offers. Once your “account” has enough funds, the settlement company negotiates with your creditors and collectors to agree to a settlement. As settlements are negotiated, the debt settlement company takes funds out of your “account” with them. You will end up making monthly payments, even with a settlement program. And a settlement program can take anywhere from 12 to 48 months, depending on how much you owe and how much you can set aside each month. These companies can charge large amount of fees, and they may not be responsive to your requests for information on the status of the debt settlements with your creditors. In addition, you may face lawsuits from creditors during this time that you don’t expect.
Should I Hire A Debt Settlement Attorney Or Proceed Alone?
There are many benefits to hiring a debt settlement attorney, including a lower monthly repayment and a lower balance. An attorney can also help you with the negotiation process and obtain a more favorable settlement and repayment plan. If you attempt to settle debt on your own, you may not be as successful. You may end up with a higher total settlement, and a higher monthly repayment. You may also end up disclosing information that should not be disclosed to the collector including your income amount, your place of employment and your bank account information. You may also agree to a Consent Judgment with the creditor, when that is not in your best interest. Your debt settlement attorney can make sure that any pending lawsuit be dismissed if possible. Finally, if you negotiate the debt on your own you may fail to get a written settlement letter.
Will I Receive Calls From Creditors During The Settlement Process?
Clients sign a retainer agreement and a third-party authorization form when they hire a debt settlement attorney. Your attorney will then provide the authorization to discuss the debt to the creditor. This means that the creditor is then only authorized to contact your attorney and not you directly. So, you should not be receiving calls from the creditor during the settlement process.
Can My Wages Be Garnished?
After a creditor files a lawsuit and obtains a judgment, they can request a wage or bank garnishment. 25% of your gross wages may be subject to garnishment until the debt is paid in full.
Is Credit Card Debt Settlement Legal?
Debt settlement is a legal process where you negotiate with your creditors to pay less than the total amount you owe. To do this, you should obtain a written settlement letter that details the agreed-upon amount, the monthly payment (if any), and whether the court case will be dismissed. Having a written agreement is essential to this process, as it provides documentation of the agreement.
What Type Of Documentations Do I Need To Properly Settle A Debt?
To properly settle a debt, you must obtain a written settlement letter or a settlement agreement signed by both parties.
Once A Settlement Is Reached, How Are The Funds Paid To The Creditor?
There are several ways to pay your creditors. You can do it through their website, debit card, or bank withdrawal. Just keep your documentation of payment, especially when paying through the creditor’s website.
How Do I Pay My Debt Settlement?
Two main ways to pay your debt settlement are through a bank withdrawal or check.
Paying by bank withdrawal is the most straightforward method – simply ensure that you have the correct routing number and bank account number for the payment to go through without any issues.
Writing a check is another option, which can be either a personal check or a bank check. Be careful that the check will clear your bank account; otherwise, the settlement could be voided.
For more information on Credit Card Debt Settlement Process In MD or Virginia, a free initial consultation is your next best step. Get the information and legal answers you seek by calling (240) 539-9393 today.
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