Hi there, I'm curious as to what attorneys do t

Hi there,

I'm curious as to what attorneys do to get their clients' debts reduced? To be more specific, my parents recently got a loan modification from their home by hiring an attorney. However, they still have two lines of credit (each in the amount of $200K) that they are indebted to the bank.

How can I got about helping them, without having them hire an attorney? I'm an attorney myself, but I know nothing about debt settlement b/c I've been practicing labor and employment law

2 Answers

Debt settlement is all about paying off your debt at a discount (worth 40-60% of the principal amount). The debt settlement co. expects you to pay money towards a settlement fund and negotiates with your creditor to get your loan balance reduced. Once the creditor agrees to accept the discounted amount, the debt is paid off from the settlement fund.

You should ask your parents to negotiate with the lender on their own. They should inform the lender about their financial hardship and apply for loan modification. In order to qualify for loan modification, there is no need to hire an attorney.

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