How to Pay for Legal Bills
- 1). Call the attorney you owe and offer to make monthly payments. When you make your payments directly to the party you owe, you should be able to avoid interest charges. Make sure your payments fit into your budget. These types of debt are not usually reported to credit agencies unless you fail to pay. If for some reason you cannot pay the established amount, always call and advise the attorney of your situation.
- 2). Pay off legal bills with one of your credit cards. You can call a credit card company and have the money transferred into your checking account. You can then issue a personal check to pay legal bills. Many credit cards offer low promotional or introductory rates for a certain amount of time. When the introductory rate expires, any remaining balance is subject to the standard rate. If you can pay off your balance by the time the promotional rate expires, you will save some money. There is a fee to do a balance transfer.
- 3). Use the equity in your home. Your legal debt can be $10,000 or $20,000, or more. If this is the case you may want to borrow against the equity in your home. Of course, your home will be pledged as security for the loan. If you don't pay the loan, your home could be foreclosed upon. Equity loans have finance charges. Sometimes home equity lines of credit have low rates.
- 4). Consolidate your legal debts with other debts. Consider refinancing your mortgage with a cash-out option. This provides the opportunity to consolidate all of your debt into one loan. This also makes use of the equity in your home, which puts your home at risk if you fail to pay. Usually there are closing costs when you refinance, but you should be able to get them rolled into the total amount of the loan. This will keep you from incurring any out-of-pocket expenses.
- 5). Pay your legal bills with cash. You may be able to settle your legal bills for a smaller amount if you pay cash. This could save you a significant amount of money. An account of this sort won't show up on your credit report as a settled debt, provided it has not already been turned over to a collection agency and reported to a credit agency.
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