Don’t You Require A Lawyer To Perform Credit Card Debt Relief These Days?

March 29th, 2011 | Posted in Debt Relief

Recently I’ve been hearing about companies which are telling people who are looking for debt consolidation programs, that you now have a lawyer to manage your case. They claim that it’s currently illegal for companies which are not law offices to perform debt consolidation.

This isn’t exactly correct. The problem is that with companies, such as these law offices, that charge advance fees for his or her assistance. Almost all lawyers will charge their clients as much as a thousand dollars for a retainer. In addition to that they usually also charge around eighty dollars a month for their legal services.

Let us look at this. You’re retaining the services of a lawyer. That seems fantastic! Now what precisely are you currently retaining them to perform? Well should you read their agreements you’re retaining them for the purpose of negotiating your credit card debt. The last time I checked there wasn’t any legalised paperwork required for that, no courtroom hearings. The truth is there is no need for a law firm or maybe a paralegal what so ever to simply negotiate your credit card debt.

2nd as I said, you’re also paying a monthly legal fee. What’s that for? Well they will tell you they are contacting your creditors telling them that they are representing you. Well what they are doing is simply mailing them a power of attorney cover letter. This by the way most collection organizations file in the huge circular file cabinet. Sending this notice will not stop collection phone calls. Also, they don’t tell you this, but they don’t send this letter to everyone of your creditors. The reason for this is that several creditors will promptly turn your file over to their legal division for a potential law suit if they obtain any such correspondence.

The only method to get the phone calls to completely stop will be to transmit them a cease and desist notice telling them that you don’t plan to pay them your debt and that they are to stop all landline calls. You can imagine what this kind of correspondence will do. In the event you cut off all possible routes the creditor needs to acquire the cash from you, it will more than likely trigger them to use the court system to recoup some of their debts.
Additionally, a large number of lawyers are not even doing the work for you. There are several pending law suits against these kinds of law offices proclaiming that every aspect of the settlement attempts are being completed by non attorney for profit businesses. Which means you’re spending money on services of an attorney but an attorney isn’t even providing you any of those services.

Right now let’s look at the way they impose their settlement charges. The majority of lawyers will charge you a flat rate of fifteen to twenty % of your total credit card debt volume. This fee is spread out throughout the initial year or so payments you make. Which means you’re paying the law firm for services that they have not really completed. In addition if you’re paying them a set amount, where’s their motivator to settle for the very least total amount?

Now in line with the FTC’s ruling demonstrated on October 27th a lawyer cannot charge any advance charges except if the customer has a face to face conference with the lawyer that will be dealing with the situation. This does not imply that you walk into an office, shake hands with an attorney, then have a paralegal hand you paperwork to sign. This meant that the exact lawyer that you talked with, would go over the important points of the program along with you at that period. And that lawyer will be the person who will be dealing with your case. This is just not how these settlement lawyers operate.

As for the declaration that only a lawyer can supply debt consolidation programs . Well that is not really true. The Federal trade commission ruling states is that a company offering credit card debt relief can’t charge advance fees for their services. It also states that they must base their costs upon their performance. What this means is they must charge based on just how much they are able to save you.

Besides this being far better for the customer, it also provides that company a motivation to do the best they are able to for you. The more money they are able to save you the more money they are able to earn. That’s best for each party. Combine that with the reality that you don’t pay for the services until the settlement has been achieved. This means that you’ll truly be able to save up more money at a faster rate and get the debts paid off more rapidly.

I would suggest you make contact with a debt analyst that can discuss with you your entire choices to determine which one is really best in your scenario.