Van Nuys Personal Loan Debt Settlement Lawyer
Aside from credit card debt, personal loans are the fastest-growing source of debt in the United States. Personal loans can be a vicious cycle. People often take them out to pay off existing debt, and are left with more debt. Personal loans have many benefits over credit cards, such as lower interest rates, but they can still become very expensive and unaffordable for borrowers to repay. This is particularly true when an unexpected event occurs, such as unemployment. If you have a personal loan that you cannot repay, the situation is not hopeless. Below, our Van Nuys personal loan debt settlement lawyer explains further.
Discharging Personal Loans Through Bankruptcy
In the majority of cases, personal loans are considered unsecured debt. This means they are not attached to any collateral, such as a home or vehicle, that can be foreclosed or repossessed if the borrower does not repay the loan. Chapter 7 and Chapter 13 bankruptcy are both methods that can help you manage unsecured debts such as personal loans.
A Chapter 7 bankruptcy can discharge, or eliminate, most if not all of your unsecured debt, including personal loans. You must qualify for Chapter 7 by passing the means test, which is not an easy thing to do. Some of your property may also be sold during the Chapter 7 process to cover a portion of your debt.
A Chapter 13 bankruptcy case will restructure your debt into a repayment plan. You will likely still be obligated to repay the personal loan, but you will have between three and five years to do so. You do not have to pass the means test in Chapter 13 and none of your property is sold. At the end of the repayment plan, you may be able to discharge the remaining debt, including any portion of the personal loan that remains.
Personal Loan Settlements
Lenders are aware that borrowers can discharge a personal loan through bankruptcy and so, they are often very willing to negotiate a settlement. A settlement allows you to reach an agreement with your lender to pay less than the original amount owed. While lenders would rather receive a portion of the debt compared to nothing at all, it is still important that you work with a debt settlement attorney.
Many people are unfamiliar with negotiating. Lenders will still also try to recover as much of the debt as possible. Our attorneys have the necessary experience negotiating favorable personal loan settlements. We will also advise you of your rights and ensure they are upheld so you obtain the best outcome possible.
Call Our Personal Loan Debt Settlement Lawyer in Van Nuys for Legal Help
Struggling with personal loan debt is very stressful. At Wadhwani & Shanfeld, our Van Nuys personal loan debt settlement lawyer can advise you of your legal options to make your debt more manageable and reduce your financial stress. Call us now at 818-658-2669 or chat with us online to schedule a consultation and to get the legal help you need.
