Just lately I have been hearing about companies which are telling people who are seeking debt consolidation programs, that you now have a law firm to deal with your case. They say that it is now illegal for companies which are not law firms to perform credit card debt settlement.

This isn’t fully accurate. The issue is with companies, like these law firms, that charge upfront fees for his or her expertise. Most all law firms will charge their clients nearly a thousand dollars as a retainer. On top of that they usually also charge as much as eighty dollars monthly for their legal counsel.

Let us have a look at this. You are retaining the services of a lawyer. That sounds fantastic! Now what exactly have you been retaining them to perform? Well should you read their contracts you are retaining the firm for the purpose of settling your debt. The last time I looked there wasn’t any legal documents required for that, no courtroom hearings. The truth is there’s simply no requirement for an attorney or possibly a paralegal what so ever to just negotiate your debt.

Second like I said previously, you are also having to pay a per month legal fee. What is that for? Well they’ll tell you they’re getting in touch with your creditors informing them that they’re representing you. Well what they’re doing is just mailing them a power of attorney cover letter. This mind you most collection organizations file inside the large circular file cabinet. Sending this letter will not stop collection calls. Additionally, they do not tell you this, but they do not deliver this letter to everyone of your creditors. The reason behind this is that many creditors will instantly turn your file over to their legal division for a prospective law suit should they obtain any such correspondence.

The only way to get the telephone calls to fully stop will be to give them a cease and desist letter informing them that you do not intend to pay them back the debt and that they’re to stop virtually all messages. You can envision what this type of correspondence will do. Should you stop all potential routes the lender should receive the cash directly from you, it will almost certainly trigger them to use the legal court system to recover some of their losses.
Furthermore, many of these law firms are not even doing the work for you. You will find numerous unfinished law suits in opposition to these kinds of law firms claiming that every aspect of the settlement tasks are being accomplished by non attorney for profit companies. That means you are paying for expertise of a law firm but a law firm isn’t actually supplying you those services.

At this point let’s have a look at the way they impose their negotiation fees. Nearly all law firms will charge a flat fee of 15-20 % of your total credit debt amount. This fee is distributed throughout the initial year or so monthly payments you make. That means you are paying the law firm for services that they’ve not really performed. Also if you are paying them a flat fee, where is their motivation to settle for the lowest amount?

Now based on the Federal Trade Commissions ruling started on October 27th a lawyer cannot charge any advance fees except if the consumer has a in person conference with the lawyer that will be handling the case. This does not imply that you enter an office building, shake hands with an attorney, then have a paralegal hand you documents to sign. This meant that the exact lawyer that you spoke with, would go over the details of the program with you at that time. And that lawyer will be the one who will be handling your case. This is just not how these settlement law firms operate.

As for the declaration that only a lawyer can supply debt consolidation programs . Well that is not really accurate. What the Federal trade commission ruling says is the fact that a organization offering credit card debt help can’t charge upfront fees for their services. It also says that they must base their costs upon their overall performance. This means they must charge according to how much they’re able to help you save.

Besides this being far better for the customer, it also provides that organization a reason to do the very best they can for you. The more cash they can help you save the more cash they can make. That’s best for both parties. Combine that with the reality that you do not pay for the services prior to the settlement has been accomplished. This means that you will actually be able to save up a lot more cash at a quicker rate and get the debts paid off quicker.

I recommend you make contact with a debt analyst who can review with you all your options to see which one is really best in your situation.

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