LEGAL BLOG: Debt/Credit Card Settlements


It’s that time of the year when we have the Holidays and gift giving to consider; but, it is also the end of the fiscal tax year and this is also the best time to plan your financial budgeting and wealth protection right now!

Many people do not think of an attorney in budget planning; however, in this particular crazy economy it is vital. Your estate (the assets you own); large or small, must be protected at all costs to shelter you and your family against loss. Be aware that only a judge and a court order stand between the safekeeping of your home, your vehicles, boats, jewelry, clothing, job and investment income, bank accounts and the relief sought by any creditor. Credit card delinquencies are huge in this country because for the past ten historical years we all relied on the leverage we had from easy credit and now we must pay for it. Credit card balances are at their all time high and the cost of credit also is at its all time high, ranging as high as 32% interest rates for some. That simply translates into long-term debt and risk since you are encouraged by the credit card issuer to pay only your minimum balance. That is your first mistake! If you only pay minimum balance on current outstanding credit card debt it could take as long as 50 years to pay off an average credit card balance of $2,500 at 27.9% interest rate. What is even worse, and we all neglect to calculate the cost of credit when paying only minimum balances on $2,500. If you were to stop charging or adding debt to that credit card today your $2,500 debt is actually valued at over $15,000 – in other words, if you are paying the minimum payment only you will end up paying $15,000 before your $2,500 is settled. Yes, read that again!

As attorneys, Katz & Associates Law Firm has the power of debt and credit structuring whereby we can negotiate directly with your lender for possible settlement of your debts. Many people are not aware that Federal laws have been enacted to further protect each consumer and to also allow credit card issuing banks to reduce debt of credit cards (negotiated settlements), but it must be requested formally. It will NOT be offered to you voluntarily by the card issuer. At Katz & Associates we have always attempted to best represent our clients for the best possible pay off of credit card debt at the lowest cost out of pocket at reasonable terms. We are proud to have enjoyed much success over the years in credit card settlement.

So, how does settlement affect you? Many times that is a decision made by the credit card issuer. Some credit card issuers report to all 3 major credit reporting companies that the debt was settled and paid and do not report any negative filing. In other credit card issuer instances we have found some will report that the debt was paid for less than the outstanding balance and report it as a negative reflection. Either way, we are not alarmed. Typically, after at least as little as 7 months or up to 9 months from the date of the settled payoff, your credit history can be revised at your request by the credit reporting agencies and they typically either remove any reference to the delinquent credit, or they will adjust to only read that it was paid in full settlement of the credit obligation.

We have found that no two success stories are the same and no two cases reflect on the next case matter. Like in all things legal, we look at the client’s needs and look to resolve issues on a per case individualized basis. However, it is important that credit be considered in any budget for wealth management and personal protection. All too often we find that unattended credit matters can turn out to be major issues once it turns legal when the banks and credit card issuers get aggressive about collection and payment. If you have any issues about your own credit card and over extended use of credit, please contact us right away for a free consultation so we may review your situation in detail and privately with you to see if we can assist to resolve those issues before they turn ugly or damaging against you. Healthy credit is important for school, for employment, for job promotion, to get a cellphone or watch your TV and get cable or satellite services. What we do is analyze your individual case matter and create all plans toward a self management of your estate. And believe it or not, even if you have a $500 credit card, just out of high school, and earn minimum wage, you still have an “estate” that must be safe guarded and protected. It’s not just an upper income wealthy person issue.

So be very careful this Holiday time of the year. Use your credit but do not abuse it. But if you got in trouble last year or previous years and need help now; or, whenever it should come up by your family or friends, just reach out to us to meet with us confidentially to discuss how we can help build your wealth estate from tiny dollars to wealth management. Other things you may want to discuss with us in private: A) Florida Will; B) Florida Living Will; C) Trusts to safeguard property and income; D) Incorporation to veil and protect assets; D) Partnerships; E) Estate Planning; and F) Elder Care.

Are you aware that we have created an online free and live chat line? YES, now you can chat live online and in real time with a Katz & Associates attorney regarding any legal or estate matter. We have created a secure chat line on our website. Log on anytime any day of the week to chat and get answers to any legal question you may have. It is totally free and totally confidential and very secure.


Katz & Associates, PLLC



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