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Can a Debt Settlement Lawyer be better than a Debt Consolidation Company ?
The answer to the above question might surprise you. Since the Federal Trade Commission's
regulations that were passed in October 2010, there has been a big push for companies to offer settlements using a
debt settlement lawyer.
Typically these law firms make their clients feel more at ease in having them deal with their debt
situations. Many of these settlement firms will give the impression that they will handle anything that might arise
for their clients including representing them should a creditor decide to proceed legally against them.
They also imply and sometimes out right claim that a debt settlement law firm can actually do a
better job than the typical debt consolidation company.
According to a class action law suit filed in the state of New Jersey;
"The law firm of Legal
HelpersDebt Resolution, L.L.C. and its individual members, recruits,
employs and partners with bothfront-end lead generators and back-end
service companies, financial institutions and otherattorneys in New
Jersey and other states to provide debt adjustment services creating theimpression that these services are to be performed or provided by
The suit goes on to say that in fact these services are not truly
being done by attorney's nor were they ever intended to be.
In most all instances these law firms are simply providing a name
that debt settlement companies and other back end processing companies use to lure in customers. In almost every
case the clients never have any contact with an attorney through out the entire process from sign up to
Another reason these debt settlement companies are using names of law firms is to get around the
FTC ruling. In that ruling it states that a debt settlement company can't charge any of it's fees until a
settlement has been reached. To combat this the companies join with a debt settlemet lawyer and charge their
clients retainers and monthly legal fees in advance under the reasons that the law firm is providing legal
services and representing them.
According to another law suit filed by the State's Attorney of Illinois;
least1,117Illinois consumers had signed agreements entitled attorneyretainer agreements ("agreements") with LHDR. Consumers believe they
are hiring a law firm toprovide debt resolution
services on their behalf.
22.In fact, Defendant contracts out
virtually all debt relief services to a third party operatedand staffed by non-lawyers.
charges advance fees which are unfair and in violation of the advance fee ban in the Debt Settlement Consumer
According to the Attorney General as
describes in the suit, they have been receiving numerous complaints about
Attorney based settlement companies who are supposed to be providing debt relief services when in fact all debt
relief services are provided by third parties. Many of these complaints report being charged advance fees and
having little or no contact with an attorney. Some have reported not having their debt being
settled at all.
According to one law
suit filed against a debt settlement law firm the plaintiff was sued by a creditor. The suit
states that not only did the law firm fail to answer the suit. They made no attempt what so
ever to contact them to even work out a settlement before it went to
The suit claims the
plaintiff received a communication from the debt settlement
lawyer stating that the client has not paid for the law firm to answer the lawsuit, but rather to manage
and settle debts.
So what exactly are you paying for? Well it seems you
are paying retainers and legal fees up front as well as settlement charges, to do exactly what a debt
consolidation company can do. Settle your debts.
To find out which of the debt consolidation programs might be
best for you, speak to a debt analyst for free. They can go over all of your options with