There are many good benefits of legitimate business debt consolidation services. However, a debt settlement program through a law firm retained to represent the debtor with their creditors. Some of these benefits are, in fact, available through reputable debt settlement companies, but not all. It’s a fact of life that people got into debt and that handling debt when it gets overwhelming is challenging. Most people believe that they have two options for handling debt they cannot pay: to default on their debt or to declare bankruptcy. With all of that in mind, here are a few scenarios in which hiring a debt settlement lawyer could make sense.
You Are Thinking of Bankruptcy
If your debts have been reduced to the point where you are considering filing for bankruptcy, then it is a great idea to determine if a debt settlement lawyer can help you avoid this fate. Although a bankruptcy petition may seem like a straightforward answer to an otherwise embarrassing problem, it is no picnic. Once a bankruptcy petition has been filed, it can be prohibitive, if not impossible, to get a loan. If you are not sure you need it, see if any local lawyers offer free advice (many do), sit down with some, and listen carefully to what they have to say. It is a practical step to think about whether it will get you closer to getting out of the hole you fell into.
Protection of a Law Firm
A law firm can protect you from creditor harassment because creditors cannot contact you if they know that an attorney represents you. A law firm will advise your creditors that you are defined so that you are not harassed in their attempt to collect your debt. If they break this law, they can be sued, and an attorney can represent you in action for violation of fair debt collection practices.
Fees Based on Initial Balance
A law enacted in 2010 called the Telemarketing Sales Rule prohibits debt settlement companies from charging fees based on a final debt balance. The costs are based on the first balance. It is an incentive for organizations to cover the costs in advance. If a debt settlement fee depends on a contingency fee – which is a percentage of the savings – it is much better to be charged based on a portion of the initial balance than to have a new equilibrium after months or perhaps years of additional interest and penalties accrued.