Lancaster Credit Card Debt Lawyers
Credit cards offer consumers access to money in exchange for high interest rates and potentially crippling late charges and penalties if any payments are missed. With these terms, it is easy for consumers to quickly become overwhelmed with credit card debt. And while filing for bankruptcy may seem like the only option if you find yourself in this situation, there are other alternatives to consider.
The Lancaster credit card debt lawyers at Wadhwani & Shanfeld can sit down with you, review your current financial situation, and advise you on the best course of action moving forward. Attorneys Raj Wadhwani and Greg Shanfeld are Board-certified bankruptcy specialists who have helped thousands of clients get out from under their credit card debts. They can assist you in negotiating a potential settlement of your debt for less than you owe the credit card company–and if that proves impossible, they can guide you through the process of filing for bankruptcy to discharge those debts.
What Is Credit Card Debt Settlement?
When we talk about “settlement” in the context of credit card debt, what we mean is the credit card company agrees to forgive some of the money owed on your balance. In exchange, you must pay the non-forgiven amount. To give a simple example, say you currently owe $20,000 on your credit card. You might be able to reach a settlement whereby the credit card company accepts a payment from you for $10,000, either upfront or over time, and forgives the remaining $10,000.
You might wonder why any credit card company would agree to a settlement. There are a few reasons. First, if a debtor files for bankruptcy, the credit card company often receives just pennies on the dollar if anything from the debtor. This is because most credit card debt is unsecured by collateral and considered a low priority for repayment in the bankruptcy process.
Second, many delinquent credit card accounts are actually sold to third-party collection agencies, again for pennies on the dollar. The collection agency is often willing to negotiate a settlement just so they can turn a quick profit. After all, it costs them time and money to go to court to obtain–and then enforce–a civil judgment.
At the same time, you need to be aware of the potential drawbacks of credit card debt settlement. The IRS generally considers any form of consumer debt forgiveness taxable income. And a settlement can still negatively affect your credit report and credit score. Finally, if you end up agreeing to a bad settlement deal–which can easily happen if you do not negotiate through a qualified debt settlement attorney–you may end up paying even more debt and fees than you anticipated.
Contact Wadhwani & Shanfeld Today
If you are struggling with credit card debt, the first thing you should do is seek out qualified legal advice. The Lancaster credit card debt attorneys at Wadhwani & Shanfeld can review your situation and help you in developing an effective strategy for dealing with your creditors. Contact us today to schedule an initial consultation.