Being Realistic About Debt Settlement Situations

Debt settlement, although portrayed as a highly beneficial and easily obtained outcome by certain advertisers both on television and online, is not as easy or effective of a process as some companies may lead consumers to believe. The reality of debt settlement is that the nature of the debts owed, rather than the actual amount owed, will play a large role in whether a given consumer can actually settle. Furthermore, debt settlement is never a catchall process, where one size fits all. Rather, the debt settlement process is a highly individualized task, often requiring the insight and representation of a lawyer to be truly effective.

Unsecured versus Secured Debts in Debt Settlement

In reality, a debtor has limited options for debt settlement based on the nature of the debts owed. In certain cases, consumer debts that are unsecured can be relatively easily negotiated and settled. These debts include credit card debt, medical bills, and merchant accounts in most cases. However, the settlement often fails to address the issues involving credit scores and credit reporting and more often than not, results in a delinquent or bad account in a credit history.

On the other hand, certain debts that are secured can rarely be renegotiated and settled without the return of the property securing the underlying loan agreement. These debts often include home loans, auto loans, and certain personal loans with a specifically outlined asset used as collateral. Other notable debt issues, including tax, student loan, and other government liens or debts, are rarely resolved via settlement. 

Getting Legal Help with Debt Settlement Situations

In practice, the only reliable method of determining whether one’s current debt situation can be resolved through settlement, or any other method for that matter, is through consulting with a debt settlement lawyer. For consumers facing debt issues, there are numerous entities and companies advertising the ability to reduce debts and perform other tasks for consumers, but in reality, only a lawyer with experience in debt issues can actually inform and represent the specific and highly individual interests of a debtor effectively.