Do I Need A Debt Relief Lawyer To Eliminate Debt Legally?
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Do I need a Debt Relief Lawyer to Eliminate Debt Legally?

The answer is; Yes and No.

The main reason for needing a lawyer is because some states do not allow debt relief companies to operate in their states. So if you live in: CT. GA. KS. ME. NH. SC. OR. VT. WA. WI. WV, you’ll defiantly need to use a debt relief lawyer to help you eliminate your debt legally. Other reasons for using a debt relief lawyer are: you’ll be able to get the hands on feeling of dealing with someone in your local area. You should be able to get a recommendation for a good debt relief lawyer from your personal attorney. I’m sure he or she will not steer you wrong and put you in touch with an attorney who specializes in only debt relief, whether it be just counseling or consolidation or more serious debt problems like debt settlement, debt relief, or finding out your options for filing for bankruptcy.

I’ve found that when I’m shopping for an item online I find it very hard to make a good decision on an item using only a photo and a description. Sure the online merchant has provided all the essential product information and has a ton of reviews stating how good the product is and how it will change my life and so on. But I’m the kind of guy who just wants to see the item in person. I want to feel it, I want to hold it and I want to look it over in order for me to make a sound assessment of the product before buying it. Now, after I have seen the item in a local store and had a chance to look it over I’ll more than likely go back to the online merchant and make the sale if his prices were better than the local stores price. The same approach should be used in finding a good law firm.

As far as pricing for services rendered, I’ve found in most cases that the debt relief lawyer will usually give you a free consultation where you and the attorney discuss all your options you have to solve your particular debt problem. After he attorney determines which avenue of help is best suited for you, he or she should be able to come up with a price for his services. For the filing for bankruptcy the law firm will have a set price they’ll charge plus fining fees and court costs. For debt settlement he or she will have a much different approach to pricing. See explanation at the bottom of this article.

Debt Settlement

Here’s the way it usually breaks down. After you have filled out the mountains of forms and paperwork that includes all the debt you want to get rid of, the firm will start working on your case. The way this works is you and the attorney agree on a monthly payment that you can live with for the life of the contract, somewhere between 2 and 4 years depending on the payments you make and the amount of debt you have.

As soon as you sign the contract you’ll be protected against debt collectors calling you, under the law they cannot harass you anymore. All you do is say that you are represented by an attorney and tell them the number of the Law Firm who is representing you and they will do the rest. Now back to the fees. You will be paying a monthly payment to the Firm who will put your money in as escrow account. Usually after 6 to 8 months of paying every month, the Law Firm will look at all of your statements (credit card) and see which balance owed falls within the range of the total payments. This is when the Law Firm starts working for you to eliminate your debt. You’ll be able to see what they are doing with your money. Up to now the Law Firm has been like a bank, just holding your money for you.

Debt Negotiation begins. The good folks at the firm will contact your creditor and explain to them that they are representing you and that you seeking protection from creditors. The law firm will point out to the creditors that you are looking at all your options of relief from this debt including filing for Chapter 7 Bankruptcy. Now in almost every case the creditor will ask. “Can we try to negotiate for a fair settlement of this debt?” At this point the law firm knows that the creditor would much rather re-coup some of the borrowed money than loose all of it through bankruptcy. So they negotiate for you to pay the very lowest percentage of the money owed to the creditor. After they agree on an amount the law firm sends the creditor the money, the creditor signs off on the loan and you no longer owe anything on this account. This process is repeated over and over for each account to be paid off until all the accounts have been signed off on.

Legal services and fees are now deducted from your escrow account. The fees are based on the percentage of savings the law firm saved you from paying the creditor. Most law firms charge you 25% of the savings for each account settled. So for an example, if you had an original debt of $1000.00 and it was settled at a 50% payback you would pay $500.00 to the creditor and 25% of the other $500.00 because it’s what you saved paying to the creditor. So you will pay the law firm $125.00 for this account.

A word of caution, some law firms keep track of hours devoted to your case, after all of your debts have been settled and everyone of the creditors have signed off on all the accounts, the law firm will add the total hours they worked on your case and deduct these hourly fees from your escrow account. All moneys left in the escrow account will be returned to you.

I hope this article has helped answer some of your questions, if you need more information on getting rid of debt, please check out my web site.

Thanks for reading and good luck.


Street Talk

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