Hard Money Lenders And Debt Settlement


Debt Settlement With Hard Money Lenders

Hard money loans serve a very specific purpose and fall under alternative lending. They provide cash quickly. Typically, they are used for a real estate investment or some other investment where the investor expects a return in excess of the principal and interest charged by the hard money lender.  When the investor reaches a crossroads and can’t make the monthly payments, one option is debt settlement with the hard money lender.

In exchange for a loan without a minimum credit requirement and a quick closing time, investors can expect a hard money lender to charge high interest rates and to pursue the investor aggressively if they stop making payments. Much like a perfect storm, the conditions may align such that the lender employs an attorney to file a civil lawsuit against the investor in hopes of obtaining a judgment in favor of the lender. With the judgment in place, the lender has much greater power to collect, including wage garnishment, bank account garnishment, and attaching to assets like real property. If you receive a Notice Of Right To Claim Exemptions form or a Writ of Execution, you need to act urgently to respond to it.

Debt Settlement Attorneys And Hard Money Lenders

Our firm routinely settles debts with hard money lenders and more traditional lenders like credit unions and credit card companies. Because we are a bankruptcy law firm handling Chapter 7, Chapter 13 and Chapter 5 filings, we can assess all of your options before reaching out to the hard money lender on your behalf. This assessment will serve you well in negotiations with any lenders but particularly with hard money lenders. If a lender knows that a debtor is considering bankruptcy, their willingness to negotiate almost always increases. Debt from hard money lenders is dischargeable in bankruptcy like any other unsecured debt. When your lender is faced with the possibility of receiving nothing in a bankruptcy filing, your settlement offer often becomes more enticing to the lender.

The Debt Settlement Process

After reviewing the loan documents—if available—and the history of payments, our firm will make initial contact with any lender with which you would like to negotiate. If a lawsuit has been filed against you, we can request a routine extension for time to answer the lawsuit, which will give us time to negotiate the debt. In most cases you do not ever have to make a court appearance.

The negotiation process is different with each lender, but we keep you informed every step of the way, and the ultimate decision to settle or not is always yours. If a settlement can be reached, we assist in facilitating payment and obtaining paperwork regarding settlement of the debt. If a lawsuit has been filed in the matter and we are able to resolve it, we make sure the court system is notified of the settlement and all records are updated.

Debt Settlement And Your Credit Score

While we are not credit score experts, we can request the lender report the debt settlement in a favorable way regarding your credit score. Most lenders are bound to very specific reporting of settled debts; however, almost all of our clients understand that by taking a few simple steps to improve their credit, they can out-weight any negative ramifications of having a settled debt show on their credit report.

Speak With A Debt Negotiation Lawyer Today

If you are dealing with an aggressive hard money lender and wish to speak with an attorney regarding debt settlement, we are happy to assist. The initial consultation is free, and you will come away from the phone call with a firm understanding of your options. To schedule a consultation, click HERE, or call us at 704.749.7747. We’re here to help.