Near Christmas Eve, 2012 the headlines in the ‘Americanbanker’ announced about a Florida debt settlement firm which had been taken to task for illegally charging upfront fees for services that they had never actually never rendered to their customers! A federal district court, Payday Loan Debt Solution Inc. directed the company to refund up to $100,000 to their consumers in New Mexico, Hawaii, North Carolina, Wisconsin and North Dakota. The settlement also made it clear that the company had to pay a $5,000 fine to the Consumer Financial Protection Bureau’s Civil Penalty Fund, which was seen as a part of the “CFPB’s comprehensive effort to prevent consumer harm in the debt-relief industry,”
In recent times the American economy already reeling with diverse complications has seen a rise in fraud practices as far as debt settlement is concerned. Statistics show that, about one in every 10 consumers who enroll in debt settlement plans are actually rid of the debt in the promised time frame. And all this thanks to debt settlement companies which have often swindled people who are already in debt by promising them unrealistic dreams. NACBA’s Ed Boltz said in an interview, once, “People pay $6,000 to $8,000 to these companies before they get any results, by the time they realize, they are deeper in debt, and their credit’s ruined.” Perhaps one of the major reasons why consulting a lawyer is a better option than a debt settlement company?
Under these circumstances, where debt settlement companies acquire such a bad name, it often makes sense to look at other options for settling your debt and one such great option is to opt for a debt settlement lawyer instead of a debt settlement company.
The benefits of hiring a debt settlement attorney instead of a company are many; let’s discuss them in detail-
- A major benefit of hiring an attorney instead of a simple debt settlement company is that supposing, you were to get sued by your creditor, an attorney has the legal right to contact the collectors’ opposing attorney and negotiate a settlement on your behalf. This is something that a debt settlement company might not be able to do since they don’t have access to direct legal recourse by themselves. For that they would have to hire a lawyer, which would mean higher overall fees for the customer that is you!
- A debt settlement attorney is a trained professional. With degrees in law and experience in handling hundreds of cases like yours. In most cases of debt settlement, there is a fear factor which plays in the mid of the debtor, with an attorney by your side, you are far safer.
- Choose a local attorney who not only has the law backing them up but also knows the laws in your area and what pertains to you better.
- In many such cases a good attorney can actually avoid their client’s even attending a court room session and get a settlement worked out from outside of the courtroom, amicably with the creditor. This actually benefits both the parties involved, and is often an easier way of working out a settlement.
- Hiring a respectable attorney makes a creditor also confident of receiving some kind of compensation for the debt. This makes them believe that it is better to reach a settlement rather than spend money in taking you to court with the chance of not receiving the said amount eventually.
- Unlike many debt settlement companies, an attorney usually makes a “full disclosure” in explaining the little nitty gritties before they get into the actual debt settlement process. This is because most attorneys are answerable to the State Bar and cannot mislead their clients, without explaining to them in full details how the entire process works.
- Moreover with a debt settlement attorney you are more likely to get a customized solution and debt settlement plan rather than make your case fall into a general standard plan that works for all. This ensures that you get services that are unique to your financial situation resulting in the best possible debt relief solution.
- There are plenty of unscrupulous debt settlement companies who will simply preach the benefits of debt settlement without fully disclosing or explaining the process of tackling it. This is something most good attorneys would avoid.
- Unlike a lawyer, a debt settlement company has no legal authority to stop preventing calls made to the debtor from either the creditor or collection agencies. If any debt settlement company promises that, then it should immediately be a warning to you about their authenticity!
- A lawyer has an optimum leverage while dealing with creditors. There are many credit card companies besides other unsecured creditors might not work with debt settlement companies, but will only work with a lawyer. Also all licensed attorneys are regulated by Federal law, State Law and State Bar Associations, and are hence mostly governed by a set of stringent code of ethics, that they would normally not violate.
Instead of worrying about the honesty of debt settlement companies, hiring a debt settlement lawyer is not only a safe but a sensible option too. This way you get professional help from a licensed, attorney who has a legal and ethical obligation to represent you honestly and fairly.
Such an attorney can also negotiate your debt settlements and give you legal protection from third party debt collectors who violate Federal FDCPA laws. It is only an attorney who can trigger such Federal rights.