Posted : Mar - 31 - 2010 @ : 4:51 pm | Filled under: Debt Consolidation
Can you trust a law firm that says they can settle you debt? I know debt settlement companies are not too good sounding, but what if it is a lawyer?
Written by - Settle Credit Card Debt
Tags: Debt, from, good, lawyers, promises, Settlement, true
Just get it in writing first
Yes, it is too good to be true. Whether it is with a law firm or not, you will be wasting your money with a debt settlement company. I speak from personal experience and ended up paying more then if I attempted to settle the debt myself with the collection agency. If your debt is held by a collection agency, it is much easier and cheaper to deal with them directly to settle your debt. I have attached a link to a very good article about debt settlement companies.
Yes. They are in business to make money. Get it in writing and the amount you must pay the lawyer. Just remember the old saying. How to tell when a lawyer is telling a lie, His lips are moving!
No, you cannot trust them. “Promises” mean nothing.
Most are lawyers and it depends on the debt, lenders dont look favorably at your credit report if they see you’ve settled your debt but they can be helpful in reducing your overall debt. They are a lot more intimidating because now instead of ABC collections calling you, you’ve got a lawyer but honestly its just a company doing the same thing, they might have 1 litigator on staff who they pay to use his name.
As someone already pointed out. A debt settlement company is in business they are not a non-profit organisation.
This works like this.
1) Debt settlement firm negotiates with your creditors on your behalf. Say you owe $20000, they might be able to get you a repayment deal at $17K now they will get money from the creditors for making this deal happen and also from you.
I sugges you go to a Credit counselling service which is free and should be available in your state.
Being a lawyer doesn’t change the way debt settlement companies work. They still take your money and let your debts go 90+ days past due before offering lowball settlements. This still trashes your credit and most credit card companies still will immediately sue you.
If you’re having problems keeping up with your credit card payments, consider an NFCC credit counseling service: http://www.nfcc.org/. These are legit, non-profit companies that offer debt management programs for a nominal fee. They negotiate lower interest and payments so you can pay off your debt. When you complete the program, you will have decent credit.
No one can force your creditors to settle for less…When you sign up with a debt consolidation firm, the program involves deliberately ceasing payments to all your creditors to force your accounts into default to attempt settlements for less. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator’s fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating. You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.
Many people who sign up with “debt consolidation” firms incorrectly assume that they have the power to force your creditors to accept settlements…they don’t. Your creditors have the right to refuse settlements and take you to court.
Promises from lawyers are too good to be true.
Anyone who says that they know that they definitely can settle your debt is a liar.
There is no way to know with certainty that a debt can be settled until it actually is settled.
There’s a find line between being broke and being broken. Many times financial problems weigh so heavily on our minds that it can feel as though the breaking point is right in front of you. One more step and you are finished. I sure felt that way, and it took me awhile to just get completely fed up with the situation I was in.
Here’s the problem. LAW FIRMS do not have the clout of some of the major debt settlement companies. i’ll explain why that matters in a moment.
Here’s the thing. there are several TYPES of “debt settlement” companies.
ANY company that tells you that you’re going to be saving your money into your own account is 100% of the time a scam, and that way of doing business HAS been made illegal, but it won’t take effect for another few months. credit solutions (you see a lot of spam about them here) made most of their money doing things in this way, and so did a lot of other companies. That type of program is called “self help” to those in the industry. Basically what they were doing was signing up clients, and NOT TELLING them they needed to save. they thought that the fees were going to cover the settlements. then once they reached a settlement offer, they’d try to get the money from the client, and of course they wouldn’t HAVE it because they didn’t know they were supposed to be saving it. they then get kicked out of the program, and lose all of the fee money they invested, and have creditors who are incredibly pissed at them at this point since they havent PAID for 6 months. nothing GOOD can come from that.
another type of “debt settlement” is done by lawyers. they say that they can ELIMINATE your debt legally through some loophole in the contracts etc etc.
here’s the problem with that. YES it worked a few times, but, don’t you think after maybe 20 or 30 times, they’d wise up and change things? the way they “settled” was IN court. they make you stop paying and wait until it goes into collections, then they challenge the creditor in court. if they DONT bring the original paperwork that says they own the debt, then you don’t owe it. they have to PROVE that you owe the debt. SINCE that happened a few times, collections agencies are damned sure to have the required paperwork now. that way of doing things WILL NOT be around for much longer. it’s completely legal, but, it’s one of those “fool me once” scenarios.
OTHER type of debt settlement..
LOTS of companies, ESPECIALLY laywers who do TRUE debt settlement ask for a fee up front. it can be a few hundred or few thousand dollars. IF THEY ASK YOU TO PUT THAT FEE ON A CREDIT CARD IT IS A SCAM… think about it… it’s illegal… here.. pay me 2,000 on this credit card. don’t worry about it. we’ll settle it out anyway. ILLEGAL…
USOBA is putting an end to that very quickly. that means, if you sign up with a program that does that, they may not be around long enough to settle your debt, which means you have no legal representation.
LAWYERS – there is NO TRUE benefit to having an actual lawyer settle your debt vs another company.. the truth is, depending upon which state your in ALL settlement companies have to have a lawyer back it. There are what they call “attorney” or “non attorney” states.. MOST states are attorney states, which means an attorney MUST look over your paperwork prior to signing you up for the program, to make sure you are legally able to enroll. in these states you MUST have 10k in debt or more, you MUST have a job or source of income, you MUST be in a 36 month or less program. 40 month programs are about to become illegal as well.
OK.. i said at the beginning that a lawyer doesn’t have the clout.
what did i mean by that???????
you HAVE to realize something. Bob signs up with Bill’s law firm to settle… Bill doesn’t call John at Capital One and say “hey, bob signed up for our program and wants to settle.. what will you take for his debt?”
it DOESNT work that way…
here’s how it works…
a company has 5000 clients TODAY that ALL have Capital One debt… let’s say that All of them enrolled on the same day…. 4 months down the road, ALL of them have enough to make AT LEAST a 50% settlement offer in their accounts..
Bill, the debt negotiator gets on his computer, clicks a few buttons on a website, and tells capital one that he has $1,450,972 worth of potential settlements for 5,000 clients that he can pay THIS MONTH…
then one of two things happens::::::::::
THE COMPUTER does some math on each account.. “what is the total debt owed, how much of that is interest, how much profit would we make if they DID pay this over the 50 years it would take to pay it off, how much OVER the original money borrowed has this person paid, and what is our loss”:::: calculate calculate —- offer 32% settlement for Bob…. then bill says “no.. too high… wait a few months and see if it comes down…. OR… sure.. go for it….
the other thing that happens is,
John our capital one guy talks to Bill the negotiator and says “ok, so you have 1,450,972 worth of debt for these guys….. cool…. i’ll give you a 29% offer on ALL of it SINCE YOU’RE GIVING ME SO MUCH…
you have to realize that the capital one guy gets a HUGE commission check EACH TIME a
Jimmy is absolutely right.
first of all, some people will say for you to do consumer credit counseling. those people are MORONS, or, work for the companies themselves. a TPI score is like a soft bankruptcy and stays on your credit for up to 10 years. it KILLS your credit for that time. no more loans, no more cars, no more credit, no NOTHING for 7-10 years.
the problem people have with settlement is that it “tarnishes your credit”. whatever. MOST companies have something worked out with the creditors to where they marks get taken off when the settlement is finished anyway. look. i’m not trying to spam you, but, if you want to talk about debt settlement, i’m open to talk about it. i’ve been in the business for a long time, and i know for a fact that the lawyer is going to screw you over. check out http://www.drifinancialservices.com
there’s an email link on it. send an email with RE: Mitch Berry and it will get sent to me. i’d love to talk to you more about this before you go through with it. just to give you something to compare with. like i said. i’m not trying to spam you, i’m writing this directly TO you, and i’m not holding you to anything. or… go ahead and call the number / and whichever rep answers, have them forward you to me.
Problem settling your debt? I’ve been with lawyers but they are all the same, until i stumble with the below link. hope this can help.