Debt SettlementThe debt settlement process allows you to negotiate with your lenders and come up with an amount that you are required to pay back. This amount is generally lower than the original amount you owed. During negotiations with your creditors, you may be able to convince your lenders to agree to an amount that you can realistically pay back. To know how much you can afford to pay back, it is best to come up with a budget before you start negotiations.

In order to create a budget that works for you and also allows you to make payments towards your debt settlement amount:

  • Calculate Your Income and Expenses. Start by making a list of all of the bills you have to pay each month. Then, determine how much you make on a monthly basis and how much money you have left over.
  • Analyze Your Spending.  If your expenses exceed your monthly income, look at your spending habits and determine which bills can be cut or modified.
  • Look at Your Old Budget. After using the budget you’ve devised for a few weeks, go back and look at which categories can be modified. For example, if you budgeted $100 for gas but only spent half that last month, change this category in your budget for this month.

Once you have a workable budget in place, you will be better prepared to understand how much you can afford to pay back to your lenders during the debt settlement process. If you live in Asheville, Spruce Pine, Marion, Sylva, Waynesville, Hendersonville, Brevard, or Murphy, North Carolina, our attorneys at Leonard & Moore, PLLC can help you negotiate with your lenders to settle on an amount that is realistic for your personal situation.