What is Debt Settlement?

Debt Settlement occurs when a creditor agrees to allow a borrower pay a less amount than initially agreed upon. However, this action damages your credit score and makes you a less favorable future loan candidate. If you are thinking about settling a debt, do not wait until you are six months delinquent as this makes you appear completely not trustworthy. Just because a creditor marks your account as “charged- off”, it does not mean you no longer owe the creditor. This is very different from written off, where the debt is no longer important.

The only way a settlement can occur is if you, the debtor (with the help of an attorney) can prove to the creditors that you cannot possibly pay off the debt without a settlement. The creditor will acquire information regarding your income, expenses, checking accounts, savings accounts, employment, credit history, etc. Then, once the creditor determines that you in fact need a settlement otherwise they will never see their money, you will be granted a settlement. You must be aware of the fact that any time a settlement for which debt forgiveness is greater than $600, the money owed becomes taxable. Thus, do not expect a tax return if you still owe someone under a settlement.

If possible- try to manage your debt before settling, as a well thought out debt management plan will be more beneficial for you in the long run. Not only will you be able to retain your high credit score, but you will also learn a new way of managing your finances.

Fridlin & Associates, P.C.

1517 Voorhies Ave, Suite 4

Brooklyn, NY 11235

(718) 372-4400

loan forgiveness debt reduction

What is a loan modification?

A loan modification is a change made to the amount that one may have to pay monthly. It is also known as a mortgage modification, a workout plan, and “restructuring.” One may get a loan modification if the borrower is facing financial hardships or has an issue keeping up with monthly payments. A loan modification sets up payments so that the borrower can comfortably pay back what he/ she owes. The lender may let this happen in a variety of ways. Lenders can allow homeowners to pay at a lower interest rate, skip payments, and possibly even extend the term of a plan so that the monthly payments are less.

If you are having trouble keeping up with monthly payments, and want to avoid foreclosure, come in for a consultation. New York Top Attorney Elaine Fridlin may be able to help. Call (718) 372-4400 for more information or to schedule your appointment today.

mortgage modification- restructuring-workout plan

The Advantages of Chapter 7 Bankruptcy

If you, the debtor, meet the necessary criteria, filing for Chapter 7 Bankruptcy might be a wise choice. Many debtors prefer Chapter 7 over Chapter 13 because Chapter 7 Bankruptcy discharges a larger number of debts. However, there is a catch. A debtor has to qualify for Chapter 7 filing by making below a certain amount of income. The trustee of the debtor also sells some of the creditor’s property that is not exempt. The money is then used to pay creditors and debt is discharged. Although the debtor does lose some property, Chapter 7 allows the debtor to start over quickly and rebuild credit without losing all future income. Most debt can be discharged, with the exception of some tax debt, child alimony, student loans, and debts acquired via fraud/ illegal activity. Chapter 7 typically lasts a few months when compared to Chapter 13, so debts are discharged quickly.

If you cannot seem to pay off your debt- give us a call today and schedule a free consultation. We will help you achieve the financial freedom you so strongly crave.

Fridlin & Associates, P.C.

1517 Voorhies Ave. Suite 4

Brooklyn, NY 11235

(718) 372- 4400

debt discharge- debt write-off

Chapter 13 Bankruptcy and its Benefits

If you are in over your head with debt, and can’t pay your bills, filing for Chapter 13 Bankruptcy may be the solution to your problems. Although filing for bankruptcy is a scary thought at first, this tool is created to work with you and your debt instead of creating more.

Chapter 13 Bankruptcy makes way so that you and your family’s debts are adjusted according to your income. You can keep your property and have a three to five year window of time to pay back a portion of your debt without any interest or fees.

“What good is it if I’m still paying back my debt after five years?!” Chapter 13 bankruptcy allows you to pay what you can afford. You have the chance to meet with an experienced attorney who will sit down and map out what is possible to pay back with your income. It won’t be such that you’re expected to pay $2,000 dollars a month for example, and only get paid $1,500 monthly.

Secondly, your property is protected. Since you are making a working effort to pay back your debts, in most cases you won’t have to give up your car and your home won’t go into foreclosure.

Last but not least, after your three to five year time frame is up, debts you do not pay in full are discharged and forgiven. If you are considering filing for bankruptcy, hiring an experienced bankruptcy attorney is your best option. Pick someone who is knowledgeable, will let you know of your risks and who will walk you through the process with as much ease as possible. Contact Elaine Fridlin at Fridlin & Associates, P.C. to set up a free consultation today.

Fridlin & Associates, P.C.

1517 Voorhies Ave, Suite 4

Brooklyn, NY 11235

(718) 372-4400

bankruptcy-advantages