Negotiating is a strategy used in almost every aspect of life. Kids negotiate with their parents for extra curfew time. Spouses negotiate with their partners over trash and dog walking duties. Workers negotiate with their bosses for a better office and higher wages. And everyone negotiates with a higher power for a longer life.

Credit card companies are no different.

They can be our best friend (offering cash back rewards when that hi-def TV goes on special at Best Buy) and our worst enemy (when the bill for that hi-def TV comes due). If a credit card customer is inclined to only pay a minimum monthly balance, then debt can become a sisyphus experience where pushing a boulder uphill just keeps crashing back down before ever reaching the payoff summit.

That’s when negotiating with a credit card company can seem like a financial ally. But it’s not always easy especially when you try to negotiate on your own. As household debt in the U.S. has jumped 11 per cent over the last decade, hiring a credit card debt legal expert like the GM Law Firm can quickly help you understand the ways of negotiating with debt collectors and gaining protection from a lawsuit at gmlawfirmllc.com.

“Negotiating with credit card companies can be very tricky, especially when it comes to lawsuits,” according to Chantel Grant of GM Law Firm. “You have to understand the laws that govern credit card debt collection practices that protect consumers from harassment and thus negotiate from a position of strength instead of weakness.”

Why Hiring a Debt Lawyer Can Help Resolve Your Debt

A professional debt attorney embodies the knowledge, credentials and expertise to help debtors understand their specific situation when it comes to financial upheaval. In the case of consumer law, debt defense lawyers like those at GM Law Firm can protect citizens against illicit or unfair credit and collection practices as well as lawsuits regarding debt from a leading firm in Florida.

In short, a consumer unaware or intimidated by the seriousness of debt collection can turn to a debt attorney to negotiate deals with creditors.

Understand the difference between a debt attorney and a debt settlement agency. A debt settlement agency may appear to be sympathetic to your plight, but they really don’t care about your ultimate financial well-being. They exist to make a buck with upfront and often hidden fees.

You’ll hear debt settlement companies say on the one hand they can reduce your debt by as much as 50 per cent or more within a year or two. While that may be true in theory consider the devil in the details. Yes, the debt itself may be cut down by a percentage margin, however a huge fee will be tacked on to pay the agency for the service. Suddenly, what was depicted as a 50 per cent reduction to the debt’s bottom line still leaves you on the hook for an additional 25 per cent or more just to pay agency.

Additionally, debt settlement agencies rarely underscore the negative impact settlements can have on your long-term credit score. Most importantly, they cannot defend you against a debt lawsuit if the settlement agreement is defaulted upon or mismanaged in any way.

If your debt is spiraling out of control and you fear collections or, worse, an impending debt lawsuit, then hiring a debt defense attorney may be your clearest, least expensive path to gaining debt resolution.

A consumer defense lawyer will have your best interests in mind to protect you against the credit perils and hidden fees of negotiating with the debt collection agency yourself.

In addition, a debt defense law firm can explain defense strategies pertaining to federal laws against harassing collection means such as violations of the Fair Debt Collection Practices Act. And, in the very worst case scenario, a debt defense attorney can defend you if a creditor sues over negligent payment.

Is Negotiating a Debt Settlement Worth the Downside?

If your credit card debt is still within your state’s statute of limitations you can still attempt to negotiate a settlement. A debt lawyer can assist in using the negotiation process to deal directly with the creditor and attempt to resolve the debt before being sent to collectors or at least show creditors that a settlement effort is in place.

But negotiating with credit card companies can be a perilous strategy. Simply put, credit card companies are in business to make money and sometimes they are often unwilling to bend on what’s owed.

In some cases, a credit card company may agree on a lump sum settlement in exchange for waiving the balance of the debt. The lump sum settlement, however, has drastic repercussions on your credit score which will likely remain a dark cloud hanging over your financial future forever. That’s why it’s important to understand your defense options and know your rights.

There’s another negotiation scenario, where the creditor may be willing to accept a structured repayment plan or hardship repayment plan, based on your current income and financial situation. There are credit score repercussions in this scenario as well and attention must be paid to interest rates or other hidden fees.

You should also know that most forgiven debt is considered income by the IRS. So, if you had $15,000 in debt that you settled for $8,000, the IRS may consider that extra $7,000 to be taxable income.

Negotiating a debt settlement is a perilous opportunity. You may think you’re getting the better end of the deal when the long-term ramifications can affect the way you purchase goods, cars and homes for the rest of your life. The goal is to avoid a debt lawsuit and be as proactive as possible.