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Debt Settlement Series: Do You Need a Lawyer to Negotiate a Debt?

Updated on June 15, 2010

At the end of every fiscal year, I go back over the work I’ve done in the last twelve months and try to determine two things in planning for marketing my business in the coming year: (1) where was I most efficient in my practice, and (2) in what cases did I really add the most value.

In a very candid review, I believe I bring the most value to my clients when I am negotiating a loan workout, debt settlement or reduction, or anything that prevents them from having a judgment taken which can later be enforced to their detriment.  I feel great satisfaction in my work from slowing down or preventing a creditor from attaching liens, garnishing wages or ruining the credit rating of a client who is and can be much more productive if the creditor is held at bay or defeated.

In most of the cases I have handled, my clients have ended up paying between five and 25 cents on the dollar (and sometimes zero) against the claims of creditors, without having a judgment taken against them and without filing bankruptcy.  By hiring an attorney, you can find out things you never learn would if you don’t – does the creditor really have a claim against you, are your defenses strong enough to overcome their claims, will the creditor pursue in place of you because of a business deal or practice that should have made him or her liable instead of you? 

This is highly valuable information, yet your chances of gleaning the information on your own are not nearly as good as they are with a debt settlement professional on retainer.  But certainly there is a cost associated with these benefits – you have to pay for the time of the attorney, or other professionals who assist you, and you will have to pay something to secure settlement of the debt through the attorney.  But if you pay an attorney a small fraction of the debt, and you pay 5-25% of the amount claimed to settle with the creditor, you stand to come out way ahead. 

You haven’t had to file bankruptcy, you are settling for an amount you can stand to part with or making payment on your own terms, without having a judgment or continuous collection proceedings hanging over your head. 

There are a few times in your life when an attorney’s help is indispensible.   When it comes to negotiating the settlement of a debt - if the amount of the debt is high, litigation is imminent if not present, and your ability to transact future business is at stake – it may be one of those times. 

Andrew J. Thompson is an attorney practicing in Indiana, and may be reached at, or toll free at (877) 365-1776.


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    • profile image

      what? 4 years ago

      can you answer me some question?