Tired of creditors calling you every single day? Past due notices stacking up? Thinking about the settlement of your debt?
That ball of debt spikes, hanging over your head, is forcing you to contact a lawyer. Isn’t it?
You may feel all confused right now, but you should keep in mind that “Haste makes Waste”. So before landing on a decision of hiring an attorney, you should explore other available options for a dependable solution.
In this post, we will discuss two main contenders of the game – Debt Relief Agencies and Debt Settlement Lawyers. We will try to enlighten you about the difference between both of the options that will help you choose an ideal one according to your needs.
Here’s the list of 6 things you need to know about these two debt relief service providers.
Often, lawyers offer debt settlement packages, but they may also provide a la carte service. For instance, they may ask for a fee to create a settlement statement, even though you are just giving it a thought to engage with them for the actual settlement service.
What they do, hardly shares any importance with what they don’t do. Lawyers simply handle debt settlement and filing bankruptcy and this means they only specialize in bankruptcy and settlement.
This clearly states that if your goal is to opt for credit counseling or a debt management plan, then choosing an attorney can probably be a step in the opposite direction.
More often or not, companies advertise themselves in such a way that it seems they are “attorney-backed”, which can easily make you dip into the false assurance of the fact that you are working with a genuine lawyer.
Or, you schedule a meeting with a lawyer, only to discover that your case will be handled by an assistant or a paralegal. You should keep your distance from such kind of firms at all costs.
Usually, the level of attention that you would get from an actual attorney or a debt relief company is far more enhanced than that of such firms.
Lawyers can be expensive. Their fee system is anything but all-inclusive, and it’s also critical to know the upfront fee and the charging process.
The following are the ways in which they may charge you:
Here, the fee structure is a flat rate procedure that works according to the creditors, which are needed to be settled with. For instance, if you have only one creditor, then no big issue, but in case there are more than two, things may get costly fast.
Some lawyers’ fees depend on the amount saved as a result of the settlement process. For example, if you are $25,000 in debt and your lawyer settles it for only $10,000, then your fee would be calculated based on the $15,000 savings.
In this fee structure, a lawyer takes a closer look at the debt and charge the fee accordingly, taking into account the time and resources it will fetch to reach the settlement.
Another type of fee structure includes hourly charges, which can prove to be costly, depending on how deep you are stuck in debt and how much time is needed to settle it once and for all.
This is something a debt relief agency falls short of. A debt relief lawyer can help if you get sued by your creditors.
In case you become a frequent offender for your debt, particularly when attempts for collections have been made, there are strong chances that a credit firm will take you to court over your outstanding debt.
Lawyers specializing in debt settlement cases ensure that even if you get sued, there is still hope to fight for the rest, and creditors won’t take the best of you.
A credit counseling firm can’t help you in this situation but surely can offer you the assistance to avoid getting sued.
As most of the debt settlement lawyers specialize in the bankruptcy law, the chances are that they may pull you away from the option of settlements, instead announce bankruptcy.
While this can be a sigh of relief for some, it isn’t an ideal move for everybody. So if you are dealing with an attorney who is being excessively pushy about bankruptcy, it might be wise of you to hire the one who guides you in the right direction. Another option is to search for a debt settlement or a credit counseling firm.
The well-known secret of debt settlement is that if your debt is considerably small, then you can handle it without any outside help.
A myriad of people has a belief that credit companies will conduct settlement deals only with professionals. But the reality is the exact opposite, especially in the case of a small debt.
But there is one catch to it. You need to gather your debt related documentation and the credit score report to start the settlement conversation with your creditors/lenders.
Focus on the debt negotiation tactics and practice with a friend or by yourself, in front of a mirror. You may find yourself settling your debts on your own.
When it comes to debt settlement and bankruptcy, they can have long-term negative impacts on a credit score.
So before you consider contacting a lawyer or even hiring a debt settlement agency, take a hard look into debt management and credit counseling. Maybe you’ll find the missing resources that would help you pay off your debt.
Remember, your key financial goal in life should be to avoid getting into debt, rather than getting out of it.
Feel free to share your thoughts on this down in the comment section.