How to Decide if You Need to Hire a Debt Consolidation Attorney

29 January 2021
 Categories: Law, Blog

Being in debt is a common but overwhelming problem. It's often difficult to know where to start when you're attempting to handle the bills that you owe to multiple creditors. In some cases, a debt consolidation attorney can point you in the right direction and work to reduce the amount of money you owe. How do you know if you need to consult a trained lawyer to help you settle your debts? If any of the situations below apply to you, hiring a debt consolidation attorney may be a good decision.

1) You have a significant amount of total debt.

The first thing you need to understand is the extent of your debt, particularly all unsecured debts that you have. Unsecured debts are those that didn't call for any collateral upfront, including credit cards, medical bills, and student loans. If you have a substantial amount of these types of debts but no means to pay the outstanding bills, a debt consolidation lawyer is an ideal resource. While it's possible to settle small bills directly with the creditor, larger debts over $10,000 are best settled by a qualified professional.

Your attorney will implement a strategy to either lower the total dollar amount that you'll need to pay back or assist you in negotiating a payment plan that is mutually beneficial for both you and your creditors. Additionally, a debt consolidation lawyer can help you reduce further damage to your credit score and avoid bankruptcy. An attorney is highly skilled at bringing debt amounts down to more manageable numbers, so you may want to reach out to a lawyer if your total debt is quite significant.

2) A creditor has sued you as a result of unpaid debts.

If you have been sued by one of your creditors, then it's crucial to call a lawyer right away. A debt consolidation attorney can help you navigate the lawsuit from start to finish and represent you in court. This is a good course of action if the lawsuit is based upon an old debt that is past the statute of limitations or if the creditor is not able to provide original documents showing that you actually owe the money.

Your lawyer will know if you should file a counterclaim. For instance, you may have a counterclaim if the creditor harassed you in any way while attempting to collect the debt. No matter the reason for the lawsuit, an attorney can still evaluate your particular case and advise you about what you should do to best defend yourself against a claim that could result in a negative judgment. 

3) You think that your wages could be garnished. 

Debt can affect your earnings as well. Creditors are sometimes able to garnish your wages if your debt is outstanding for a very long period of time. This often happens with back taxes and student loans. If your salary takes a hit, your financial problem may only increase. Contacting a debt consolidation lawyer can help with this issue too. Depending on the state in which you work, there are limits on how much a creditor can take from your paycheck. Your attorney will investigate your case and let you know if the creditor is collecting more than is permitted each pay period. If your wages haven't been garnished yet, a lawyer can also help you negotiate alternative payment arrangements that allow you to keep your earnings untouched.

Hiring a debt consolidation attorney is a valuable step to take when your debt becomes too high to control on your own. Your lawyer will ensure that your interests are adequately protected while also helping you settle what you owe to your creditors in the long run.