Negotiation and Settlement (Including Waivers of Deficiency)

Negotiating a Settlement

Are you in debt?  It’s not uncommon for lenders to consider negotiating a payoff with you if you have the ability to make them an offer. The benefit to you is that the settlement is typically a percentage of what you owe. At that point, your debt could be retired!

If you are able to pull funds from other avenues, this may be a great option for you. Retirement accounts, family earnings, and savings accounts are good places to pull funds from when looking to release you from debt, at a fraction of the cost.

The lenders biggest concern is that the settlement makes sense after conducting a cost/benefit analysis. In a declining market, lenders are more likely to settle. There are additional factors that a lender will consider as well, such as:

  • Ability to recoup the investment
  • Cost to pursue foreclosure, bankruptcy, or other law suits

When to Settle

Do you have additional funds available to you? If so, settlement may be a good option. Conversely, if you do not have additional funds available to you, it may not be the best idea. Settlements typically do not involve a payment plan. The banks have no reason to authorize a payment plan for a smaller pay-off amount; this is basically the same as paying your mortgage – If you can make settlement payments, why can’t you make the mortgage payments?

Your credit score may be affected in a settlement; however, there are ways around it. You may be able to negotiate, as part of the settlement; credit score not sustain any adverse affects.

If you think reaching a settlement is the way to go, it is best to include additional actions. Such actions can be used to force the hand of a lender. For this reason, it is highly recommended that you consult with an experienced attorney. Alliance Legal Group has the legal support team to help you negotiate. Your free consultation starts by calling (877) 560-4440.