credit card debt consolidation nyc

Do You Need To Have An Attorney To Do Debt Consolidation These Days?

Just lately I have been listening to businesses which are telling individuals who are seeking debt consolidation programs, that now use a lawyer to handle your situation. They claim that it is now illegal for businesses which are not law offices to do debt negotiation.

This isn't fully correct. The dilemma is that with businesses, such as these law offices, that charge advance fees with regard to their professional services. Most all law firms will charge their customers nearly a thousand dollars for a retainer. In addition to that they normally also charge around eighty dollars monthly for their legal services.

Let’s examine this. You are retaining the services of a lawyer. That sounds fantastic! Now what exactly have you been retaining them to do? Well if you examine their legal agreements you are retaining them for the purpose of negotiating your debt. Last time I checked there was no legal papers necessary for that, no courtroom appearances. Actually there is simply no need for a law firm or maybe a paralegal what so ever to merely negotiate your debt.

Subsequent as mentioned, you are also paying a monthly legal fee. What is 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 merely sending them a power of attorney letter. This incidentally most collection companies file inside the large circular file cabinet. Mailing this letter won't end collection phone calls. Additionally, they don't tell you this, but they don't deliver this letter to everyone of your creditors. The reason for this is that several creditors will instantly turn your file to their legal department for a prospective law suit if they receive any such correspondence.

The only way to get the phone calls to totally stop will be to give them a cease and desist letter telling them that you don't plan to pay them back the debt and that they are to stop all communications. You can imagine what this type of correspondence will result in. Should you cut off all feasible ways the collector may need to acquire the funds from you, it will most likely cause them to make use of a legal court system to get back some of their losses.
Furthermore, most of these law firms aren't even doing the negotiation for you. You'll find a number of awaiting law suits against such law offices proclaiming that every aspect of the settlement tasks are getting done by non lawyer for profit companies. That means you are spending money on assistance of a law firm but a law firm isn't actually supplying you any of those services.

At this moment let’s examine how they charge their settlement charges. Most law firms will charge you a flat fee of 15-20 % of one's total debt volume. This fee is distributed within the first year or so monthly payments you're making. That means you are paying the law firm for services that they have not really completed. Also if you're paying them a flat fee, where's their incentive to negotiate for the lowest amount?

Now based on the Federal Trade Commissions ruling set up on October 27th a lawyer can't demand any advance charges unless the consumer has a in person meeting with the attorney that will be managing the situation. This doesn't mean that you walk into an office building, shake hands with a lawyer, then have a paralegal hand you papers to sign. This meant that the actual attorney that you talked with, would review the important points of the program with you at that period. And that attorney will be the one who will be managing your case. This is just not how these settlement law firms operate.

As for the statement that only a lawyer can supply debt consolidation programs . Well that's not exactly accurate. The Ftc ruling states is the fact that a firm providing credit card debt relief can’t charge advance fees for their assistance. It also states that they need to base their costs upon their overall performance. What this means is they need to charge based upon just how much they are able to save you.

Along with this being much better for the customer, it also provides that firm a motivation to do the very best they are able to for you. The more cash they are able to save you the more cash they are able to earn. That's best for both sides. Combine that with the truth that you don't pay for the services before the settlement has been achieved. This means that you'll truly be able to save up more cash at a faster rate and get the debts paid off more rapidly.

I recommend you speak to a debt analyst that can discuss with you all your choices to determine which one is really best within your scenario.
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