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How to Settle Debt Due to Covid-19

Author Yuriy Moshes

With the recent COVID-19 outbreak affecting the health of every city and community worldwide, many people throughout the country are also struggling financially. Many have lost their jobs entirely or have suffered loss of income. Many businesses have lost their client-base and are struggling to stay afloat. Accordingly, even with the federal stimulus, debt is slowly creeping up on every single American in this country. This is especially true for New York and New York City, which is especially affected by the pandemic. Unfortunately, there are no magic or easy answers in solving this debt.

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By hiring an experienced debt settlement lawyer and working with a debt settlement attorney, you will learn the difference between debt settlement vs bankruptcy, debt settlement vs. debt maintenance, the debt settlement pros and cons, the debt settlement process, or debt settlement taxes. A New York debt settlement attorney can help with a well-crafted debt settlement agreement letter, giving rise to better chances to reach a Bank of America credit card debt settlement, American Express debt settlement, mortgage debt settlement, and even a private student loan debt settlement. Just because COVID-19 is wrecking the New York City economy, does not mean all is lost. By hiring a debt settlement New York attorney you will increase your chances of resolving your debt instead of having to declare bankruptcy.

How to Stop Paying Credit Cards Legally? How to Win a Credit Card Lawsuit?

With mobs of people being laid off from work every day, being forced to stay indoors and not work, and with wages decreasing more and more due to a lack of business activity, many New Yorkers have been forced to try to live their lives using credit cards. Although it is not ideal, nothing about this coronavirus is ideal either, forcing many people to use their credit cards to pay for such essential expenses as groceries, utilities, health insurance, and auto insurance premiums.

How to Settle Debt Due to Covid-19

These credit card bills keep piling up, becoming higher and higher, forcing many people to only be able to pay the minimum balance, all the while, their debt balance keeps climbing. As a result, New Yorkers find themselves trapped in a downward spiral, never being able to get out of the debt that they were forced into due to the coronavirus, with their credit scores becoming lower and lower.

What is Debt Settlement?

Debt settlement is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. The debtor hires a debt settlement attorney on their behalf who then negotiates a reduced payment to the creditors. Does debt settlement hurt your credit? The debtor’s credit rating can go down significantly due to a default. However, even though the accounts are “settled,” the default appears on the debtor’s credit record for seven years.

How Do I Know If I Need a Debt Settlement Attorney? When You Should Hire a Debt Settlement Lawyer?

Only by hiring a debt settlement attorney can an experienced debt settlement lawyer explain the debt settlement pros and cons to you, explain to you the difference between debt management vs debt settlement and debt settlement vs. bankruptcy, but more importantly, determine if a debt settlement New York is your best option. Accordingly, you should contact an experienced debt settlement lawyer as early as possible.

How Does Debt Settlement Work During a Pandemic in NYC?

With all of NYC being affected by the COVID-19 pandemic, the entire city is on the brink of financial ruin. Accordingly, how does COVID affect debt settlement? And more importantly, can I reduce the interest on debt thanks to the coronavirus?

Luckily, the answer to this is a resounding “YES.” As the COVID-19 pandemic continues, many lenders are putting policies in place to help customers who may need extra time to pay their bills. Lenders may be able to temporarily lower your interest rate or payment amount, or pause your payments for a period of time.

You may be asking yourself, “I got coronavirus or my relatives got infected and this prevents me from working because of that I can not close my debt on time – what should I do?”

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You need to contact an experienced debt settlement lawyer to discuss with you the debt settlement pros and cons. They will analyze your individual situation and determine your financial situation as it applies to debt management vs debt settlement and debt settlement vs bankruptcy.

What is Better Bankruptcy or Debt Settlement?

What do I do during a pandemic if my business stopped working and I have my debts? Specifically, what is the difference between debt settlement vs bankruptcy?

Bankruptcy generally falls into two categories: straight liquidation of assets (Chapter 7) and reorganization (Chapter 13). Both go through the court system where a judge, ultimately, decides the outcome. Both also become part of the public record.

By contrast, debt settlement most often is a private negotiation between the debt settlement attorney you hire and your creditors. Debt settlement is a private transaction and not a public record.

Accordingly, an attorney for debt settlement will be able to analyze your situation and determine what is best. Generally, if the debt is manageable or the amount it would take to settle the debt is less than the amount you would pay in Chapter 7 or 13 bankruptcy, debt settlement may be the right fit.

Which is Better? Debt Consolidation or Debt Settlement?

You consolidate your debts through a consolidation loan, which is a single loan that combines and replaces all of your prior debts into one monthly payment with one interest rate. Consolidation loans are offered through financial institutions, generally banks or credit unions, and all of your debt payments are then made to the new lender.

Which Is Better Debt Consolidation or Debt Settlement?

In contrast, a debt settlement strategy does not seek to replace existing debt with a new loan. Instead, debt settlement is a series of negotiations between your creditors and your experienced debt settlement attorney, in which they seek to reach an agreement that allows you to pay less than you currently owe, usually in a lump-sum payment.

What Are The Pros and Cons of Debt Settlement During Pandemic? What is a Debt Settlement Program?

A debt settlement program is a debt resolution strategy that allows debtors to reduce the amount they owe in exchange for a lump-sum payment.

Will a Pandemic Smooth Out My Debt to Financial Institutions?

Although creditors are under no obligation to enter negotiations or accept your offer, since the COVID-19 is now universally worldwide, financial institutions will more often than not be willing to work with you, making it often possible to pay much less than what you currently owe if the creditor believes your offer represents its best chance to recoup at least a portion of the loan. In addition, advanced debt-collection techniques and accounts-receivable processes can be expensive, and fighting through a bankruptcy proceeding is unattractive to most lenders.

How Long Does Debt Settlement Stay On Your Credit Report?

A settled debt with no delinquent payments will stay on your credit report for seven years from the date it was settled according to the Fair Credit Reporting Act (FCRA). However, if you do make a late payment, it will stay on your report starting on the date it became a delinquent account and was never current again.

How Long Does It Take to Improve Credit Score After Debt Settlement?

If you have a poor and/or thin credit history, it could take 12 to 24 months from the time you settled your last debt for your credit score to recover. Either way, you’ll benefit from debt settlement if that means you’re no longer missing payments.

What Percentage of a Debt is Typically Accepted in a Settlement?

Before the CORONA-19 pandemic, the standard percentage to settle a debt for was 40 to 60 percent of the original debt amount. However, during this CORONA-19 crisis, the percentage could be even greater now.

How to Write a Debt Settlement Proposal Letter?

It is not recommended that you do debt settlement yourself. Only an experienced debt settlement lawyer familiar with debt settlement taxes and debt settlement New York can draft an effective debt settlement agreement letter on your behalf.

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How to Negotiate Debt Settlement With Bank of America During the Covid-19 Crisis? How to Negotiate With Debt Collectors for a Lower Settlement? How to Negotiate With Creditors for Debt Settlement? What Happens After Debt Settlement?

Since COVID-19 has affected all of NYC, causing the entire population to not be able to pay their bills and turn to credit cards to survive, negotiating with debt collectors and creditors has become much easier, assuming you have the right debt settlement attorney who is familiar with the process and can draft an effective debt settlement agreement letter.

Once the debts are settled, your credit rating will lower. However, there are still some consequences. Even though the accounts are “settled,” the default appears on the debtor’s credit record for seven years. However, you are still able to keep your property and can avoid bankruptcy.

Accordingly, having an experienced debt settlement lawyer familiar with debt management vs debt settlement, debt settlement vs bankruptcy, debt settlement taxes, and a debt settlement agreement letter is extremely important.

Law Office of Yuriy Moshes

The Law Office of Yuriy Moshes PC represents all types of people and businesses in debt settlement in the greater New York City area including all its boroughs, including Manhattan, Brooklyn, Queens, the Bronx, and Staten Island, as well as Northern New Jersey, Long Island, and Upstate New York. If you’re struggling with debt, you need to consult with an experienced debt settlement lawyer for a free consultation.

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