Wednesday, May 1, 2013

Differences Between Debt Settlement Companies And Debt Settlement Law Firms

There are hundreds of Debt Settlement Companies advertising on the Internet and Television these days. These companies help consumers settle high amount of credit cards and unsecured debts, negotiating with their creditors to cut a substantial amount of the original debt. The consumer mails the agreed monthly payment to them and they distribute the funds to their creditors. This is a fast process to get debt relief and eliminate the burden of debts. If the debtor chooses the right company, he will be able to have control of his finances again.

*They can't stop collectors from harassing the debtor.

*Collectors can still sue the debtor and take him to court.

*When the debt is settled, it shows as 'debt settled' in the credit report instead of 'full payment'.

*This will affect the consumer's ability to apply for a loan or a large purchase in the future, like a home or a car. The lender or creditor will be hesitant to give him a loan or credit once they see the credit report.

*Some of these debt relief settlement companies request their service fees up front, which takes off the company's motivation to do the best effort and get the consumer the best debt relief help available.

*Some of them request upfront fees, and will deduct them from the first payments they receive from the consumer.

*Other settlement companies, allow the consumer to make the fees payment on a monthly basis.

*Some will try to convince the consumer to let them withdraw the monthly payment from their checking account. The best practice would be to send them a check for the payment every month.

Note: If the consumer didn't research properly when he chose the debt relief company, and the company chosen is a fraudulent one, they may drain his checking account and by the time he realizes it, he'll be broke and his debt will still be there with the added high interest rate and late fees. Creditors and collectors will start harassing the consumer constantly.

Make sure that the Company has been in business for at least 5 years. Fraudulent companies usually drain their customers checking accounts and then closed the business and open it again with a different name somewhere else; making it impossible for the customer to track them.

Debt Settlement Law Firms

These are teams of experienced attorneys who offer free consultation to evaluate the consumer financial situation and help him to get debt free. They are licensed and prepared to deal with all financial situations following their State's code of professionalism and high ethical standards. These Law firms offer free consultation to analyze their clients financial needs and advise them of the best debt relief option to choose.

*The attorney will not charge any upfront fees.

*The attorney's fees are paid when the debt is settled and their fees are more affordable than the settlement company's fees.

*The consumer has attorney-client confidentiality during the process.

*The debt settlement attorney can stop collectors and creditors from harassing the debtor. He will write them a letter requesting them to stop contacting him, what ensures that the collector be bound to obey by the rules of law. A letter from a debt settlement company or a debtor will be ignored completely.

*The attorney is a mediator between the debtor and creditor or collector, so they have to contact the lawyer with related issues.

*The attorney will inform the debtor about the laws and regulations implemented by the Federal and State Law governing bodies, so the debtor can be aware of the availability of protection and fairness he is entitled to, including, the Fair Debt Collection Practice Act that allows debtors to sue a creditor who is on violation of the above stated Act.

*If a creditor or collector harasses the debtor after being told by the attorney to stop, he will becomes subject to a potential lawsuit from the debtor.

*The debtor has extra protection with the Bar Association. The attorney is less likely to risk his license knowing that he cannot just get another and start again somewhere else, he is better off doing the best he can for his client to get debt free.

*The attorney can arrange for a settlement out of the court, so the debtor doesn't have to go through the court process.

I hope this article provides you with helpful credit information to start dealing with your financial problems and find the debt relief help you need. Feel free to check the top three reviewed debt settlement companies that can help you find the best help option available to straighten out your debt problems.

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