Negotiating Credit Card Debt Settlements

STAGE 1: Initial Situation Assessment and Debt Obligation Analysis

Lawyer's actions:

• Collects complete information about client's debt obligations (debt type, amount, creditors, delinquencies, collection status)
• Analyzes client's financial situation (income, expenses, assets, liabilities)
• Determines feasibility of debt settlement negotiations versus bankruptcy
• Provides written assessment and preliminary action strategy

STAGE 2: Client Preparation and Authorization for Negotiations

Lawyer's actions:

• Prepares power of attorney or representation agreement
• Identifies priority debts for settlement (e.g., credit cards, personal loans, medical debts)
• Advises on potential outcomes and options (settlement, forbearance, partial forgiveness)
• Develops negotiation strategy: target settlement amount, payment terms, agreement criteria

STAGE 3: Negotiations with Creditors and Collection Agencies

Lawyer's actions:

• Contacts creditors/collectors on client's behalf
• Conducts written and verbal negotiations regarding settlement terms (amount, payment plan, waiver of penalties/fees)
• Engages in multiple negotiation rounds if initial offers are rejected
• Documents all agreements in confirmation letters or official settlement agreements

Estimated cost: $500–$1,500 per debt (or hourly $200–$350/hr)

STAGE 4: Settlement Agreement Execution and Compliance Monitoring

Lawyer's actions:

• Legal review of settlement agreement terms
• Coordination and supervision of client's signing process with creditor
• Monitoring timely settlement payments or installment plan compliance
• Obtaining debt clearance confirmation (settlement letter, satisfaction of debt)

STAGE 5: Credit Report Cleanup Support (If Needed)

Lawyer's actions:

• Reviews credit report after debt settlement completion
• Files disputes with credit bureaus (Equifax, Experian, TransUnion) regarding inaccuracies
• Coordinates with creditor/collector to update credit reporting