#1 Rated Bankruptcy Lawyers in San Diego

What is Debt Settlement

[fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” video_preview_image=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” padding_right=”” type=”legacy”][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ background_position=”left top” background_color=”” border_color=”” border_style=”solid” border_position=”all” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”true” min_height=”” hover_type=”none” link=”” border_sizes_top=”” border_sizes_bottom=”” border_sizes_left=”” border_sizes_right=”” first=”true”][fusion_text]

In a nutshell, Debt Settlement is a process by which our attorneys contact your lender and negotiate a settlement of your debt for pennies on the dollar. Debt settlement is a plan to renegotiate the amount of unsecured debts you owe, so that the amount paid is less than that the principal balance you owe, yet is accepted as full payment of the debt. Many individuals who are experiencing a financial hardship due to massive amounts of debt, yet they cannot or will not file a bankruptcy, debt settlement is the only debt management method available to them.

As a concept, banks have been practicing debt settlement to deal with defaulting debtors for thousands of years. However, debt settlement became widespread in the United States during the late 1980s when bank deregulation, which loosened consumer lending practices and allowed for many Americans who never before could get credit to ultimately accrue massive amounts of debt, coupled with an economic recession placed banks in financial hardships.

In general, only unsecured debt (not secured by real assets like homes or autos) can be settled for less than owed. However, our firm has had success settling out second lien mortgages on people’s homes. Although, usually this is when the property is upside down and there is zero equity (value) in the home to pay off the 2nd lien mortgage in the event of a foreclosure.

Be wary of many of these “fly by night” debt settlement firms. Many of them are old mortgage brokers who no longer can make a living in the real estate field due to a crash in the market, therefore they are moving into the field of loss mitigation and debt settlement. These debt settlement firms usually charge a client a monthly fee for a 12-60 month term. What they do is put the client’s money into a separate bank account, which the Debt Settlement firm only has technically viewing rights to. The Debt settlement firm takes the money out of the account and pays off credit cards one at a time. The reason these firms put the money into a separate third party account as opposed to a Trust Account, is due to the fact that the California Finance Code prohibits any entity without a “Prorator’s License” from putting a client’s money into a trust account for the purposes of settling out a debt. The reason these company’s use the third party account as opposed to obtaining a Prorator’s license is because in order to obtain a Prorator’s license one must have extensive experience in debt settlement (as mentioned before all of these new companies are former mortgage brokers without any experience), plus they are capped and restricted from charging fees exceeding 5-6% of the overall debt. These companies are extorting clients by charging them upwards in the range of 15-20% of their overall debt amount.

We here at the Bankruptcy Law Center typically use debt settlement only in situations in which the client either possesses too many assets to protect in a bankruptcy, or they make too much income, thus they do not qualify under the Means Test which was implemented in the 2005 Bankruptcy Reform Act. Our attorneys have a proven success rate with Debt Settlement. Our trained staff of paralegals and Lawyers have the ability to use the threat of bankruptcy to leverage the banks into negotiating a favorable settlement, send out cease and desist letters halting collections calls, and force the banks into getting rid of your debt for an amount you can afford. Call today to set up a FREE consultation, in order to sit down with one of our attorneys and see whether you qualify to settle out your debt for pennies on the dollar.


See What Our Clients Have To Say

Yelp Review

Roger C.

I reached out to BLC to help assist with a chapter 7 business bankruptcy and they provided excellent guidance, advice, and support through the entire process. In my case an adversarial action was filed by one of the creditors and attorney Ahren Tiller and his staff provided sound ...arguments which prevailed. Couldn’t have found a more experienced and supportive team to represent me in a tricky situation. I would highly recommend them to anyone making the difficult but sometime necessary decision to find financial relief. Read more
Yelp Review

Justin R.

Like many others before and during the pandemic, life happenings caused me to be in a financial situation to warrant bankruptcy. The BLC was super professional all the way through the entire process. Right after I paid for my Bankruptcy, I got sick and had to have surgery and recovery. Then we ...were in full Pandemic mode. They were gracious to delay my filing until I was recovered and ready to file. I could not ask for more. The process was over all quick and painless for a simple Bankruptcy like mine. I feel a weight has been lifted and I can rebuild. Thank you for all your arduous work and patience, Gabriel, Ahren, and their teams are knowledgeable and efficient. Read more
Google Review

Katey Huntley

Responsive, friendly, kind, extremely easy to work with! So knowledgeable and made this entire process painless. Very grateful!

Google Review

Lynn Molina

Gabriel Hanna, Esq and the staff at BLC helped me in a very difficult time. I appreciate all the help and care they gave my case.

Google Review

Linda Cramer

I can’t say enough of how much this bankruptcy law firm helped me with my financial situation. They were all so helpful, efficient and made the difficult time and process as quick and easy as possible. I would recommend them to anyone I know and am glad to give my public recommendation as well. T...hey truly deserve a five star plus rating. Read more
Yelp Review

Andrea N.

I am very happy with my experience with BLC. Bankruptcy is not something anyone wants to go through, however everyone at BLC made my experience pleasant and easy. The process was explained thoroughly and I had an easy time reaching out and connecting with my attorney. Anika Renaud-Kim was my attorney ...and she was nothing short of amazing! She was very patient and generous with her time. Ms. Renaud-Kim definitely made me feel at ease and comfortable through the entire process. Read more
Facebook Review

Lidia Paramore

they did a great job for me, helped me anytime I needed something, my Lawyer Gabriel Hanna is the best, gave lots of confidence all the time..thanks BLC I will.always recommend you, I’m very grateful for your service!!!

Yelp Review

Rachael C.

When searching for information I had called a few different firms and received consults. BLC was the only one who didn’t shy away and provided answers and information during the consult. Once I agreed to move forward, they were supportive, informative, and eased my anxiety through the whole process.... I can’t recommend them enough. Read more
Google Review

Emily Martinez

AmazingI had many questions and uncertainties and the carefully explained it all and made it easy to understand. They facilitated a fast and easy process making this scary difficult thing simple

Ready To Eliminate Your Debt?

Bankruptcy is still the best option. Other debt plans make promises, but only bankruptcy delivers.




1230 Columbia St. #1100 San Diego, CA 92101


11500 Olympic Blvd., 4th Floor Los Angeles, CA 90064


380 South Melrose Drive #308 Vista, CA 92081
© 2023 Bankruptcy Attorneys. All Right Reserved.

Legal Disclaimer: The Bankruptcy Law Center is a California Licensed law firm with attorneys licensed in the state of CA, NY. Attorney Ahren Tiller is responsible for this advertisement. Bankruptcy Law Center’s principal office is located at 1230 Columbia st. Suite 850 San Diego, CA 92101. Prior results listed on this site do not depict or in any way infer a prediction or outcome.We are a debt relief agency proudly providing options to people with financial problems. View our Privacy Policy

© 2023 All Rights Reserved.