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Importance of hiring a law firm for debt settlement

Why choose a Law firm vs. a debt settlement company?

We have all seen the late night commercials or radio adds promising to cut debt by 75%. These companies and their sales representatives have only one thing in mind and that is to earn a commission. Not necessarily having your best interest in mind they are pushing one product; bottom line is you are never shown all the legal options you have. They cannot provide all options because they are not a law firm. While providing representation, most attorneys perform a financial analysis to determine and explain what legal options are in the clients’ best interest.

Settling your debt is a legal matter and should be treated as one. Debt settlement is not a “cookie cutter” process it is different for every individual and family. Only a law firm has a strict set of laws they must obey, lawyers must provide “Full Disclosure”. What this means is that it is a lawyers ethical and judicial duty to ensure that each and every client understands every aspect of the transaction. Debt settlement companies do not have to abide by these laws.

A law firm can legally reduce or cease all collection calls. The Fair Debt Collection Practices Act (FDCPA) states that if a client is represented by an attorney, 3rd party debt collectors are required to communicate with the attorney and not the debtor. If the creditor continues to contact the debtor they run the risk of being sued. Law firms can sue debt collectors who violate your rights thus make the collectors stop contacting you.

When a creditor receives a letter of representation from a law firm they think one of two things. The client is either filing a bankruptcy or they are going to come up with some money to settle. The creditors know that a law firm has the ability to file a bankruptcy and that there is a possibility they might not receive a dime. This gives creditors motivation to settle with law firms the way they see it, something is better than nothing. While with a debt settlement company the creditors know they are working with a company who just wants to settle and tend to settle at a higher percentage.

When you attempt a debt settlement process there is a chance that a creditor may attempt to sue you and take you to court to get a judgment. While this is not common it does happen, and a debt settlement company will leave you in charge hiring an attorney to deal with the court, or you end up with a judgment. If you are with a law firm and this happens you already have legal representation so they will be able to take the necessary steps to ensure that a judgment is not issued.

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