Debt Settlement

The fastest growing trend in debt resolution is Debt Settlement. It is a proven and effective bankruptcy alternative. It is most effective for unsecured creditors, which include credit cards, medical bills, and collection accounts of all types. There are, however, some concerning trends regarding non-attorney debt settlement companies which over-market and misrepresent this alternative to individuals and families who, understandably, are desperately seeking an alternative to bankruptcy.

Statements on radio commercials such as “new bankruptcy laws make you pay back all of your debt” are false and amplify that debt settlement companies are focused on making sure you buy what they are selling – not on having you understand your situation and helping you find the best way to make your life better.

For information about non-attorney companies that exclusively handle debt settlement, see these recent news articles. From the New York Times, “THE NEW POOR: Peddling Relief, Firms Put Debtors in Deeper Hole” and in USA Today, "Thinking of Debt Settlement? New FTC Rule Can Help."

So, what is Debt Settlement? Basically, it is paying your creditors less than what is owed as an alternative to filing bankruptcy. The attorneys in our law firm have a long track record of success in this area. Typically, the debt must be settled within a relatively small time frame and in a lump sum. This is an alternative for the small percentage of people who have the lump sum funds available to settle and have fully reviewed the tax ramifications associated with settling debt outside of bankruptcy. Specifically, in many cases, if you settle for less than what is owed, the amount forgiven may be imputed to you as income tax.

The evaluation of Debt Settlement as a workable option requires an attorney experienced in both Bankruptcy and Debt Settlement cases. If you are discussing Debt Settlement with a non-attorney firm (who cannot fully explain and compare bankruptcy options), you should be very hesitant to enroll in their program. The focus should be on your situation and finding the best solultion for you. It is impossible to find this solution if you cannot freely discuss and explore all your options. To schedule a free consultation with an experienced attorney at one of our Columbus, Ohio area offices, please call our office. We also have Central Ohio locations in Columbus, Lancaster, Delaware, and Zanesville.

Frequently Asked Questions about Debt Settlement

How will a debt settlement arrangement affect my credit rating?

Both Debt Settlement and Bankruptcy will negatively affect your credit rating. We will discuss this with you as part of your initial consultation and share with you what your experiences as been with each strategy.

It is important to note that neither bankruptcy nor debt settlement will permanently ruin your credit. Credit is always repairable and your credit rating depends on a number of factors.

After a debt settlement agreement is reached and paid, can those same creditors continue to ask me for money?

No. Your Jump Legal attorney will demand from your creditor and review the legal and binding agreement stating that after you pay the agreed upon amount, you no longer owe the debt. Should you be contacted by the same creditor after your debt has been paid, refer the creditor to your Jump Legal attorney.

I know that I need to resolve my debt problems, but how do I know if I should file bankruptcy or if I should choose debt settlement?

We are here to help. During your free initial consultation, an attorney will evaluate your case, explain all your options, and make recommendations on how he/she thinks you should proceed. For your convenience, we have offices in Columbus, Lancaster, Delaware, and Zanesville and we have consultations Monday through Saturday.

Would I be better off going to a company that only handles debt settlement rather than a law firm?

No. If you choose to have Jump Legal represent you, and debt settlement is the solution to your debt problems, you will have an experienced attorney working on your behalf.

We want what is in our clients’ best interest. Sometimes it is debt settlement and sometimes it is bankruptcy, and in some cases it is neither. We are not biased toward one solution or another. We take the time to understand our clients’ cases and their needs and we spend the time that is necessary to make certain that each client understands his/her options. If at any time we feel that you would be better served by an option that we do not provide, we will refer you to a local specialist in that field.

Read faqs on debt settlement, bankruptcy, credit, mortgage loan modifications, and more on our FAQ page.