By: Robert J. Nahoum
If you are facing a debt collection lawsuit in New York, you may be wondering if a debt settlement plan is a viable option. Unfortunately, the answer is no. Debt settlement plans are not effective in resolving debt collection lawsuits in New York.
Here are some reasons why:
- Debt settlement plans generally require you to stop making payments to your creditors. When you enroll in a debt settlement plan, you are essentially telling your creditors that you do not intend to pay them back in full. This will likely result in your creditors taking legal action against you, including filing a lawsuit.
- Once a lawsuit has been filed, your creditors are no longer directly negotiating with you. Instead, you must now negotiate with their attorneys and in court procedures must be followed. Debt settlement companies are not attorneys and cannot represent you in court.
- Because debt settlement companies are not attorneys and do not represent you in court, relying on a debt settlement company to settle a debt in a debt collection lawsuit may result in a default judgment against you. This means that the creditor will automatically win the lawsuit and you will be ordered to pay the debt. Don’t give the creditor this easy victory.
If you are facing a debt collection lawsuit in New York, it is important to speak with a qualified attorney experienced in debt collection defense. An attorney can help you understand your legal rights and options, and can represent you in court if necessary.
Here are some additional things to keep in mind about debt settlement plans:
- Debt settlement plans can further damage your credit score. When you enroll in a debt settlement plan, your creditors will report your accounts as being in default. This will likely result in a significant drop in your credit score.
- Debt settlement plans can be expensive. Many debt settlement companies charge high fees, which can make it difficult to save money on your debt.
- Debt settlement plans are not guaranteed to work. There is no guarantee that you will be able to successfully negotiate a settlement with your creditors.
If you are considering a debt settlement plan, it is important to weigh the risks and benefits carefully. Debt settlement plans can be a risky option, and they may not be right for everyone. If you are considering a debt settlement plan, it is important to speak with an experienced debt attorney to get personalized advice.
If you need help settling or defending a debt collection lawsuit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.