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Debt Resolution 101: What’s the Deal?

Luff Strenfel LLP Oct. 24, 2018


Debt Resolution 101: What’s the Deal? Many of my clients find themselves in a precarious position regarding an outstanding debt. In order to avoid a situation where you are forced to file for bankruptcy in order to avoid a sheriff sale, let me explain the basic process of how most consumer debts or handled.

One of the most common deaths to incur is the consumer debt. Typically, this step involves a credit card. If you have a credit card debt and cannot meet your financial obligation the creditor Will usually let the matter go for only a limited period of time. It is at this moment in time where the consumer should do their best to work with the creditor to see if they can come up with a solution. And, if a solution can be reached between the creditor and consumer the matter will not escalate as long as both parties abide by the solution. While this solution could result in a negative impact on the consumers credit score it is the least damaging to the consumers credit score in most situations.

If the creditor and consumer cannot come to terms, the next step is usually the creditor assigning the debt to a third-party debt collector. This debt collector will follow up by phone and by United States male frequently and it causes stress up on the consumer. Since the creditor could not work out terms with the consumer, the creditor and consumer will almost certainly have their relationship cease. At this point the consumer needs to come to terms with the collector In order to stop communication and to have the matter marked as settled.

If this cannot be accomplished, the collector will hire an attorney and file suit in the appropriate court. It is at this moment in time when the consumer finds them self in imminent legal jeopardy Because they are forced to now deal with the collectors attorney and the court system and its inherently confusing procedures. Additionally, the consumer is faced with losing time from their job in order to attend it to legal matters and possibly finding themselves in the position of hiring an attorney at additional cost.

During the period where the lawsuit is pending the consumer is faced with a Hobson’s choice: liquidating some or all of their property in order to avoid further legal proceedings or, if the matter has gone to judgment, to satisfy the judgment and discontinue collection proceedings and enforcement through the court such as a sheriff’s sale; or, to file for bankruptcy and face liquidation through the bankruptcy court in order to get a fresh start and to stay further enforcement by the state court.

If you were a consumer and have debt that is unmanageable, we at LHS law firm can help you. Time is not on your side. Contact us and schedule a time to talk about your situation so that you don’t find yourself having to file for bankruptcy to save your home.