Useful Information about Debt Settlement Lawyers

Many consumers who are considering debt settlement encounter law firms that offer debt negotiation services on behalf of their clients. The concept is no doubt enticing, and although some consumers have had success with this model, there are others who have not been so lucky for a variety of reasons. The purpose of this article is to clarify different issues that lead some consumers to being dissatisfied with using debt settlement lawyers.

1. Law firms are not able to stop litigation from a creditor who is pursuing a past debt that you actually owe (outside using the methods that a regular settlement company can use – mainly setting up a payment or settling the debt before it gets to this point). Ultimately, the likelihood of legal action taken largely depends on a. the creditors own internal policy toward delinquent accounts and debt settlement in general and b. factors that have to do with the client (as opposed to the company) like account activity prior to falling behind (read this article about credit card debt negotiation to learn more about whether you’re in a good position for success with debt settlement).

2. Many debt negotiation attorneys cannot give legal advice. Most debt settlement lawyers serve clients nationally, so unless they are licensed in your state, you’ll be paying extra fees for a law degree that can't be put to use.

3. Along the same lines, since they operate nationally, most debt settlement lawyers do not represent their clients if legal action is taken by the creditor.

4. Debt settlement lawyers tend to be much more expensive than other alternatives because many take a percentage of your savings. For example, let’s assume that you owe $30,000 in credit card debt, and you decide to hire a debt settlement lawyer to negotiate your accounts. He or she charges 5% of the amount that’s owed up front as a retainer fee and a monthly maintenance fee of $50 for the length of the program (36 months). So far so good, but the lawyer is also entitled to 30% of the savings. In the end, the total fee you will pay comes out to $8700 if your debt is settled for 40% of the outstanding balance. Sure, you still come out way ahead versus paying the minimums on high interest credit cards, but there are economical options available that will deliver equally satisfactory results.

5. The accounts may not be negotiated by an attorney. In light of the fact that they oftentimes charge higher fees, many consumers feel it doesn’t make sense to pay higher prices when they can receive the same level of expertise with a more cost-effective alternative.

In the end, the debt settlement lawyer model only makes sense if a) the attorney only operates on a local level and will represent you in court in the event of a lawsuit or b) they offer fees that are competitive with other companies in the industry. Even then, before you consider a debt settlement lawyer, check out whether they’re in good standing with the Better Business Bureau. Always remember: just because they passed the Bar, it doesn’t necessarily mean they have a good reputation for helping their clients.

If you would like to learn more about Franklin Debt Relief’s debt settlement program, please feel free to call (877) 274-1260 to talk to a consultant. You can also submit your contact information here.