Debt Help, Options

Generally speaking you have 6 basic options in tackling your debt.  The 5th and 6th options are for clients who owe back taxes or require assistance with student loan debt. 

The options listed here do not include debt consolidation loans or taking on any new debt.


A tax lawyer in California writes intently.1. Better Money Management -This is the most preferable way to deal with your debts. This option involves creating a realistic budget and sticking to it.

a. Identify your fixed expenses (Rent/Mortgage, car payments, insurance etc.).  Fixed expenses are bills you must pay and the amount generally does not change.

b. Indentify your variable expenses.  Expenses in this category vary from month to month and may include ATM withdrawals and discretionary items.

c. Identify how you’re currently spending your money.  Many people are not aware or have not watched their expenses.  The best way to see exactly what your spending is to look at your bank statements for the past 2 months.

d. Create a budget and stick to it.  Your first priority should be food, shelter and transportation.

e. Contact your creditors.   Most creditors offer hardship programs.  These may include temporarily lowering interest or reducing your payment for a period of time to help you back on your feet.

f. Reduce expenses.

g. Look for ways to save money.

Check out these money saving tips.

If you discover that your budget is very tight or slightly negative, below are a few other options:

2. Debt Management Plan- or DMP is suitable for clients who can afford their current (or a slightly higher) monthly credit card payments.  In a DMP you make one monthly payment to a licensed qualified DMP provider or credit counseling organization.  The provider makes proposals to your creditors who may agree to offer you a lower interest rate or other concessions to assist you in paying off your debt.  Fees for this service are generally governed by state law.  As a general rule the set up cost is around $50 and $50 per month for the length of time you’re in the program. Terms average 36-60 months.  These fees are included in your monthly payment.  Qualifying parameters for DMPs are established by the creditors and guidelines may be strict.  Not all applicants or debts will qualify.



3. Debt Settlement Plan- or DSP.  A DSP may be suitable for clients who do not qualify for a DMP, do not qualify for bankruptcy (or want to avoid bankruptcy) and cannot afford the current monthly minimum payments on their credit cards or other debts.  You make monthly deposits into an FDIC insured bank account.  Deposits are based on your budget, the estimated settlement amount and the amount of your debt.  As funds accumulate in the account and opportunities present themselves with your creditors, the provider will attempt to negotiate settlements with your creditors for something less than what you owe.  Fees for this service are based on the amount of money saved on the original enrolled debt amount.  If you do not save money off the original balance of an enrolled account, you do not pay any legal fees. Not all debts or applicants will qualify and this service is not suitable for everyone.The risks of this program include a severe negative effect on your credit history and score, you may be sued by your creditors, your balances will increase due to interest and penalties until the debt is settled with the creditor, and not all creditors are willing to negotiate.4. Bankruptcy– Is generally considered a last resort.  Bankruptcy may remain on your credit report for 7-10 years.  However, bankruptcy stops all collection activities including foreclosure, eviction, repossession, judgments, most garnishments and bank levies.  The Firm offers 2 types of personal bankruptcies, liquidation (normally thought of as “fresh start” bankruptcies and reorganization (where you repay your creditors over time) bankruptcies.  Depending on your circumstance Bankruptcy may be a good option for you if you have a limited income or an overwhelming amount of debt.  The only way to determine if you qualify is to call or visit us for a free, confidential, no obligation consultation. To schedule your consultation call us at 800-987-4165.   For more information about bankruptcy click here.

5. Tax Representation and Preparation- This service is available by itself or in conjunction with other debt relief options.  Taxing authorities have vast collection powers and can be very aggressive in their collection efforts.  If you owe federal and/or state taxes or have not filed taxes, it is very important you deal with them as soon as possible.  Interest and penalties can add up quickly making it more difficult to pay off later.  The IRS and most state agencies can file liens against your property, levy your bank account and garnish your wages without going to court.  Fortunately there’s help.  Mr. Zimmerman has a Master’s degree in Tax Law.  In addition to Mr. Zimmerman’s expertise, our Tax Division is spearheaded by a former IRS Agent.  Our team is expert in representing you before the IRS on your behalf.  This includes payment plans, interest and penalty abatement, lien releases, lifting garnishments and bank levies and if you qualify an offer in compromise.  We can also help you prepare and file your current or past due tax returns.  For more information help with back taxes click here.(go to tax service overview)

6. Student Loans- This service is available for clients with federally guaranteed or private student loans. To properly evaluate your case we need to review your loan documents. After our review we will schedule a consultation to review your options. Click here for complete details.

This page is designed to provide you with potential options that may be available to you.   It is not intended to recommend any option as there are advantages and consequences to each course of action.   The Firm will only assist you with Bankruptcy, Tax Representation and Preparation, and Student Loan Assistance.  As part of these services, we are also happy to discuss better money management assistance when requested.

The Federal Trade Commission has produced an informative brochure on these and other debt relief options.