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Credit Card Debt Settlement | Second Mortgages Settlement | IRS Taxes Settlement

DEBT SETTLEMENT

Do you have severe financial issues that are causing you undue stress, sleepless nights, fights with your spouse and uncertainty about your future? For some people, filing for bankruptcy protection is either not an option or they feel philosophically opposed to it. For others, working out a debt settlement plan is a course of action that best suits their particular situation and relieves them of considerable anxiety.

What is Debt Settlement?

A debt settlement is a plan whereby we work with you and your creditors to come up with a workable solution to crushing debt. Most debt concerns substantial medical bills or credit cards with high interest rates with the debtor only able to make the interest payments with no end in sight. With our assistance, we can often reduce the interest rate or the principal and have you make a monthly payment with resolution of your debt within a reasonable time.

Large Asset Cases

Why is bankruptcy not an option for some people with considerable debt? For debtors who have a large amount of assets such as vacation or investment property, they may lose those assets in a bankruptcy. Others could lose a substantial amount of their home equity. If you face foreclosure, you have to file a Chapter 13 but you still have to make the monthly payments. In a large number of cases, our attorneys can come up with a workable debt settlement that allows you to retain your assets and get you out from under overwhelming debt and allow you to keep all your assets.

Meet the Means Test

Before you can file for Chapter 7 bankruptcy, you must meet or pass a Means Test. In other words, your average household income over the previous 6 months cannot exceed your state’s median income, though in some cases you may still qualify based on other factors that our attorneys can assess for you. Otherwise, you could still qualify for a Chapter 13 or see if we can work out a debt settlement plan for you.

Do You Have a Prior Bankruptcy?

If you filed a Chapter 7 before and your debts were discharged, you have to wait 8 years before you can file again. If you previously filed a Chapter 13 and wish to file a Chapter 7, you must wait 4 years from the date of discharge of your case to file. Discuss this situation with one of our attorneys. If you cannot file, then a debt settlement resolution may be your best option.

If You Are Opposed to Filing Bankruptcy

Some people for various reasons will not consider filing bankruptcy, feeling that they must remain responsible for their actions and are committed to repaying their debts. If you feel this way, then we will assist you in finding the best possible resolution of your financial issues. If you merely feel unsure about filing, then talk to us and we will answer all of your questions and concerns.

The Debt Settlement Process

  • Call Us

Your first step toward financial relief is picking up your phone and calling us. We will discuss the various options available to you based on your financial condition and qualifications.

  • Retain Our Firm

Your second step is to retain our law firm. Once you do, politely advise your creditors to direct all future calls to us. Meanwhile, you should begin depositing funds into a client trust account that we set up for you so we can begin the negotiating process. This may take some time but you need to have readily available funds so we can quickly settle your debt.

  • Our Skilled Negotiators Will Talk to Your Creditors

Having an attorney handle your negotiations gives you much more leverage in obtaining a lower or more reasonable settlement offer since your creditors know that we can file a bankruptcy petition for you that could wipe out their debt. Our skilled negotiators know how to approach each creditor and get them to agree to a reasonable settlement offer.

Once an amount is agreed upon and is in writing, we can use the funds you deposited in your client trust account to pay the creditor and satisfy the debt.

Types of Debt We Negotiate

  • Credit Card Debt

Most debt we deal with concerns credit cards. Most credit card companies realize that a debtor with substantial debt may not pay them anything, have any assets worth pursuing or may file for bankruptcy. Accordingly, they are mostly willing to settle for a small percentage of the debt owed. We deal so often with credit card companies that we have good working relationships with them and can often secure very favorable settlements with them.

  • Second Mortgages

We can settle second mortgages for much less than what is owed if your home is “underwater” or has negative equity. This means that the fair market value of your home is less than what you owe on your first mortgage loan. This could categorize your second mortgage as an unsecured debt. If we file a Chapter 13 bankruptcy in a case like this, we could ask the court to strip the second mortgage and relegate it to unsecured creditor status. The junior lienholder would be paid only a small fraction under your repayment plan and would be discharged after you complete the plan. In such cases, we can readily settle your second mortgage for a small amount without you having to file a Chapter 13.

  • Taxes

Only some older taxes can be discharged in a bankruptcy. There are a number of options that our attorneys can discuss with you on how to handle or settle your tax obligations. If discharging them in a bankruptcy is an option, we will advise you.

IRS TAX SETTLEMENT

The Offer in Compromise (OIC)

Taxes are a necessary evil. No one likes to pay them but if you fail to do so, you could end up in jail and still owe thousands of dollars in penalties and fines. Many people with pressing financial needs or for some other reasons fail to pay their taxes or are unable to pay the full amounts owed. For those individuals who can demonstrate an inability to meet their tax obligations, the state and federal government provides a process called an Offer in Compromise, or OIC, whereby you can settle your tax debt for much less than what you owe provided you meet certain conditions. Contact our law office to discuss whether an OIC is possible for your tax situation.

When is this a Good Option?

The Offer in Compromise program was designed for those individuals who lack the assets or financial capability to pay their taxes. To have an OIC as a possible option for you, let our lawyers obtain the necessary documentation to prove to the state or federal government that your financial condition is inadequate to meet your obligations.

The state or IRS must have significant doubts about your ability to pay your owed taxes before the statute of limitations expires for collecting your debt. Also, the taxing authority may wish to settle if you have a credible dispute with them over whether you owe the claimed amount. In other cases, you may have an unusual circumstance that would persuade the government to accept an Offer in Compromise. You will not know if an OIC is an option for you unless you talk to one of our tax attorneys.

Who Qualifies for an Offer in Compromise?

An Offer in Compromise was an option that was not commonly available or approved for most people. Since 2012, however, the IRS has offered more flexibility in determining which debtors are allowed to participate in the program. The changes include a revision of the calculation for a taxpayer’s future income, allows taxpayers to repay their student loans and expands the Allowable Living Expense allowance category and amount.

But before we charge you anything for our services, let our able team of tax attorneys review your financial and tax situation completely. We will not accept any client for an Offer in Compromise until after we fully assess your case. Our success as a law firm is dependent on giving our clients the best possible service and we will only accept you if we feel we can achieve a satisfactory result for you.

When considering your qualifications for an OIC, our team will examine your income, debts, expenses, assets and any unusual circumstances such as catastrophic illnesses or injuries, divorce, loss of employment and other extreme conditions. Call our office to see if an Offer in Compromise is a realistic alternative for you.

The Offer in Compromise Process

  • Do you Feel You Might Qualify?

The first step in the Offer in Compromise process is for you to determine if you might qualify. Have you been unemployed for a long time, sustained a serious and disabling injury or illness, or have some other circumstance that has you suffering a substantial financial hardship? If so, call our office and have our attorneys assess your situation. We will not accept you as a client unless we feel you do qualify.

  • We Will File the Application

Once we accept you as a client, we will obtain the necessary information from you that is needed to complete the application for an Offer in Compromise. Once this is accomplished, we will file the application for you and contact the authorities to confirm it has been received and is being processed. Be aware that confirming receipt of your OIC application can take up to two months but our office will continue to contact the taxing authority.

  • The Approval

Even after we receive confirmation that your application has been received and is being processed, we will remain in contact with the tax authority to ensure proper processing. Unfortunately, the approval process can take up to one year. If your OIC application is approved, you will be presented with 3 options for payment:

  • 1. Make a lump sum payment
  • 2. Pay in installments over a short time
  • 3. A deferred payment pan

Under the new rules, all offers must be fully paid within 24 months of the date the offer is accepted.

2ND MORTGAGE SETTLEMENT

What is a Second Mortgage Settlement?

Do you have a second mortgage on your house? Does your home have negative equity or is considered “underwater,” a situation where the value of your home is less than the balance owed on the first mortgage or loan? If you do and your mortgage payments are overwhelming you, then you might consider having one of our attorneys negotiate a second mortgage settlement for you.

In a settlement, the mortgage holder or lender agrees to receive less than what it is owed in return for releasing its lien. Once released, you no longer owe any money to this lender who later cannot come after you for any deficiency or outstanding loan balance.

Why Would a Lender Agree to a Settlement?

A lender will only agree to a settlement and release of its lien or security interest in your home if the alternative is receiving little or no return on its loan investment. This can happen when your home is “underwater” as described above or you are considering bankruptcy or possible foreclosure.

Negative Equity

Although our economy is showing signs of a long awaited recovery, a substantial number of homes are suffering from the economic downturn of a few years ago that saw home prices plummet and inventories soar. Record numbers of foreclosures were being processed and many people were simply walking away from their homes.

If the first mortgage holder decides to foreclose on a home with negative equity, chances are that the junior or second lien holder will receive nothing on its investment. In some areas of the country, close to a majority of the homes have negative equity. With recent signs of economic recovery however, more and more homes are beginning to recover their lost equity so now is the time to consider a second mortgage settlement.

Foreclosures

If you have missed several first mortgage payments or simply stopped paying, the first lien holder can move to foreclose on your home. Should your home have negative equity, a foreclosure sale will not even pay for the outstanding balance on the first mortgage and the second lien holder will be left with nothing.

Similarly, a Chapter 13 bankruptcy, filed to stave off foreclosure, can result in the second mortgage holder relegated to unsecured creditor status if we can demonstrate to the court that the amount owed on the first mortgage is more than the fair market value of your home. Once the Chapter 13 proceeding is over and the remaining unsecured debts, including the second mortgage is discharged, you owe that lender nothing. For this reason, a second mortgage holder will seriously consider settlement.

CREDIT CARD SETTLEMENT

Many people find themselves suddenly faced with credit card payments on an account with a huge interest rate and that seems never ending. Just making payments on the interest is difficult enough, let alone trying to make some headway on the principal. This is where our law firm could help. Let us review your finances and assets and see if we can negotiate with your creditors so you will only have to pay a small portion of what you owe.

Credit card companies are willing to do this in many instances because of the possibility you might file for bankruptcy. If that happens, they will receive nothing. By having our law firm negotiate a reasonable settlement for you, the creditors know their claims can be wiped out if they refuse to settle.

Is this an Option for Me?

A settlement is usually an option for most debtors but if you filed a previous bankruptcy less than 6 or 8 years ago, depending on the chapter you filed under, you cannot file for bankruptcy again until a certain time has passed. For other debtors, filing bankruptcy might mean relinquishing assets that you wish to retain. There may be other reasons why filing bankruptcy is not an option for you.

Maintaining Good Creditor Relationships

If you do file for bankruptcy protection, you must include all of your creditors. You are not allowed to just pick and choose which debts you wish to discharge. Also, you may not make a significant payment to one creditor and then file for bankruptcy 3 months later. This is referred to as a “preferential payment” and the bankruptcy court can demand that that payment be submitted to the court since you “preferred” one unsecured creditor over others. For some debtors, maintaining a good relationship with certain creditors is important for future transactions so a settlement with one or more creditors is more attractive to them.