New York City residents with financial problems may feel cornered by debt collectors, but there are always options. Some people in this position may have a choice between Chapter 7 and Chapter 13 bankruptcy.

For others, avoiding bankruptcy entirely may be possible. With the help of an attorney, they may be able to negotiate settlements of their debts, and move on with their lives without the threats of garnishment and property seizure hanging over them anymore.

Most creditors are reluctant to hold onto a debt for very long. It is common practice for them to “sell” the debt to a third-party debt collection company, often for a small percentage of the debt’s value, and then write off the remainder on their taxes.

Thus, people in debt are often dealing with a company that only paid a small percentage of the debt’s value, but are seeking 100 percent of the debt. This may provide some room for negotiation. The debt collector could be willing to accept an amount the debtor can afford, because it would still make a profit.

Having an attorney negotiate a settlement on your behalf can save you significant money. Collection companies may be more likely to listen to an attorney’s arguments in favor of reducing the debt, and they will probably be careful not to break the law when they know a lawyer is watching them. Finally, an attorney will insist on a written agreement, rather than a verbal “handshake” deal that is difficult to enforce in court.