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Our Debt Management Programs
Debt management is a broad consumer law term spanning numerous options for reducing and eliminating your debt. And not every debt management plan requires a lawyer. In fact, at LHA, we don’t work in the areas of debt consolidation or credit counseling, except in legal actions against unscrupulous companies who violate consumers’ rights and operate illegally.
You won’t always need a lawyer. But it’s always wise to consult a debt attorney about which plan best addresses your unique situation and helps you the most.
Credit Counseling
When appropriately done, credit counseling combines eligible debts into one manageable payment. From there, either for-profit or non-profit agencies make payments on your behalf at lower interest rates. For this, the counseling company will take a fee out of your monthly payment.
LHA doesn’t suggest credit counseling often, but legitimate organizations can help overextended individuals eliminate high-interest rates and better organize their finances. But any savings typically pay for the service.
Topics we’ll cover in the following video:
- What is credit counseling?
- How credit counseling works
- Pros and cons of credit counseling
Time: 0:55
Debt Consolidation
Like counseling, debt consolidation can be done without a lawyer. This refers to taking out a new loan to pay off other debts. The new loan, usually with a lower interest rate, payment, or both, is paid off under the new terms. Consolidation loans come in many forms, most commonly an equity line from your mortgage.
Debt consolidation can alleviate a lot of uncertainty, but they do little to address underlying problems and often complicate things by tying unsecured debts to other assets, like your home.
Attorney Jeremiah Heck explains your options with debt settlement.
Time: 3:36
Debt Settlement
A debt settlement plan is negotiated with your creditor, where they agree to forgive a portion of a debt in exchange for a lump-sum payment. This allows the creditor to recoup something, and if the terms are met, the debt is forgiven for much less than what was owed.
When done correctly, debt settlement is a good option for people struggling with payments. But there are unscrupulous settlement companies who will collect a fee, despite being unable to work out a good plan for all your debts.
Topics we’ll cover in the following video:
- Forms of debt management
- Do you need a lawyer for debt management?
- Secured vs. unsecured debt
Time: 5:26
Whether it involves settling your balance, reorganizing existing debts, assisting with a bankruptcy filing, or representing you in a lawsuit, LHA will find the right debt plan to meet your needs.
Call 888-726-3181 for free, no-risk & no-obligation consultation.
“My experience with Luftman, Heck & Associates has been very positive. They have been very professional throughout the course of the cases in which they represented me. I can’t thank LH&A enough for their services and being straight forward with me on what to expect throughout the process.”
Jason Allen
Debt Plans That Work for You
Although any one of these could be the correct course of action for your situation, each of these debt plans comes with some limitations as well as possible risks.
Are Your Debts Covered?
Most debt management plans are designed only to cover unsecured debts. Unsecured debt refers to any debt that is not collateralized by a lien or mortgage on specific assets in the case of a bankruptcy, liquidation, or failure to meet the terms for repayment.
If you default on an unsecured debt, the creditor may only bring a lawsuit for the money you owe. The creditor cannot take your car or your home.
The most common unsecured debts are:
- Credit card bills
- Utility bills
- Signature loans
- Medical bills
On the other hand, secured debts, such as mortgages and auto loans, usually don’t qualify for debt management programs, including consolidation. Therefore, it’s essential to carefully review your finances and be realistic about effectiveness.
Know What You’re Getting
No matter which debt plan you select, it’s essential to understand the process and program requirements.
You’ll want to know:
- How Long Will The Debt Plan Take? Repairing finances doesn’t happen overnight. Many debt management programs can take anywhere from 30-48 months, but there’s no penalty in paying off debts earlier.
- What’s the Cost? The cost will largely depend on the option you select. The cost for a debt settlement is usually based on the total owed. At the same time, credit counseling is a monthly fee, and loan consolidation costs are typically included in the new loan amount. Whatever you choose, these costs should be clear and discussed in advance.
- Will a Debt Plan Hurt My Credit? Taking steps to reduce and eliminate your debt is always a good thing in the long run. Most debt plans will negatively impact your credit score initially, but things will improve as payments are made, debts are paid off, and you regain a positive rating.
FAQs About Getting Debt Help
Can I Pick What Debts to Include?
All eligible unsecured debt will likely need to be accounted for depending on the program. This even includes bills that you typically have no problem making payments towards.
What Types of Debts Can I Include?
Most plans focus on unsecured debts. This includes credit cards, medical bills, utilities, rent, and other debts not secured by property.
What If A Creditor Refuses?
Despite it being in their interests to work with you, in some cases, creditors choose not to participate. Should that be the case, the original terms of the debt remain.
When Is it Time to Consider Debt Help?
There is no hard-and-fast rule for how far in debt you must be to seek assistance, but if you struggle to make payments, it’s time to consult a professional.
How to Tell if a Debt Plan Is Wrong For Me?
Everyone’s situation is different, and not every program requires an attorney’s help. Still, without speaking to a debt lawyer, it’s almost impossible to determine what will best relieve your burden. Generally, if a program does not save you money or address the root cause of your debt issue, it’s not the right plan.
What’s the Benefit of a Debt Help?
The chief benefit is eliminating or at least drastically reducing the amount of debt you’re dealing with month after month. Additionally, by working with LHA, you can benefit from consumer law professionals examining the underlying cause of your debt, offering practical steps to addressing future issues.