When you fall behind on unsecured loans or credit card payments, you face tough alternatives. One of the options to address financial issues is debt settlement, which simply means bargaining with a creditor to accept less money than you owe. While this strategy is appealing, the process is typically complex and carries risks for the unwary consumer.

Reasons a Creditor Might Accept Less Than Full Payment

If you wonder why creditors might take less money than the debtor agreed to pay back, you recognize the creditor must see a financial advantage to accepting a settlement. Some hard realities may give creditors an incentive to accept a lower repayment:

  • Debt collection is expensive whether handled internally or through a collection agency
  • Suing a debtor to obtain a judgment is also costly
  • Fear of the debtor wiping out the debt in bankruptcy makes settlement preferable

In spite of these factors, a creditor still may not reduce the debt. No law on the books compels creditors to do so.

Protections Offered by California’s Debt Settlement Law

In 2021, Gov. Newsom signed AB 1405 into law. This legislation covers debt settlement practices to make the process more transparent to debtors who sign contracts with debt settlement companies. It also gives consumers three days to review and rethink the contract before it takes effect.

Benefits of Using a Debt Settlement Attorney

While many debt settlement companies operate in California, not all of them offer competent services with knowledgeable advisers. Hiring a professional lawyer in this area offers many advantages if you are overwhelmed with financial obligations and ready to seek debt settlement with creditors.


California attorneys are licensed by the State Bar of California, and they must follow strict rules of professional conduct. Debt settlement lawyers who violate these ethics can lose their licenses to practice law, so they have a lot at stake when working with clients.


Representation by an attorney shows you are serious about resolving your financial problems and working out a debt settlement. Creditors and collection agents often take an aggressive stance with debtors to intimidate them but are less likely to speak this way with attorneys.


A debt settlement lawyer has extensive knowledge of financial law and can assess your particular situation and outline the pros and cons of possible solutions. A lawyer can also recognize any mistakes a creditor or collection agency has made in collection attempts or advise you if the statute of limitations has expired on the debt.


Debt settlement is a bargaining process, and attorneys have honed their negotiating skills. They can quickly assess the opposition and read between the lines of what is said. They know what motivates creditors and use this knowledge to their advantage. They can effectively bring up the possibility of bankruptcy. It is possible this proficiency can result in a better settlement amount or payment arrangement.

A lawyer can also competently complete all the debt settlement paperwork and make sure you are protected with everything properly documented in writing. Your lawyer can also advise you about any tax consequences on forgiven debt amounts.


Debt settlement attorneys often have many years of experience helping clients to get debt under control and to make a fresh start in their financial lives. Although these lawyers focus on working out the best possible settlement with each of your creditors, they also direct attention to improving your financial competency for the future. Handing over communications with your creditors to a debt settlement lawyer not only improves your chances for a favorable outcome but also takes a huge load of stress out of your life.

What To Look For in a Debt Settlement Lawyer

When you’re ready to take advantage of professional help with your creditors, it is important to choose a lawyer that is the right fit for your circumstances. While this involves some time on your part, it is worth the effort to check out these basic qualifications.

Free In-Person Consultation

Like most businesses today, law firms use phone calls and emails for a large percentage of their communications. To size up a prospective lawyer, however, it is necessary to meet in person initially. Come prepared with a brief outline of your situation and a few important questions to evaluate how well you can work together.

Consumer Law Experience

Ask prospective attorneys about the number of debt settlements they negotiate annually and the bankruptcies they process. Make sure they know bankruptcy law, understand tax rules and work with different credit card companies and banks. Select a lawyer with long-term experience in all areas of debt resolution.

Active Participation in Your Case

Finally, make sure the lawyer you select will personally handle the most important aspects and negotiations of your case. You can expect many attorneys to delegate some of the routine work to a paralegal or other staff member, but you want a lawyer who personally handles the critical casework.

At the Law Offices of Brent D. George, we are happy to meet with you personally for a free evaluation of your case. Contact us today to schedule your consultation.