Using a Debt Negotiation Law Firm

When people want to pay down their debts, they often consider contacting debt negotiation law firms or debt negotiation companies. However, people should carefully consider whether debt negotiation companies are worth the risk compared to using debt negotiation law firms. Debt negotiation is an alternative to filing bankruptcy. Debt negotiation, a debt management option, occurs when creditors agree to reduce a percentage of money owed on past bills such as lawsuit judgments, medical, utility or credit card bills.

Debt Negotiation Law Firms Have More Power Then Debt Negotiation Companies

Debt negotiation law companies are just that—companies. They do not have legal power to negotiate with creditors to lower people’s debt. However, debt negotiation law firms do have the legal power to do so.

Creditors Don’t Have To Work With Debt Negotiation Process

Unlike personal bankruptcy, creditors do not have to work with any designated third party. Also, the creditors are not legally bound to agree to negotiated terms or accept any payments. So, debt negotiation laws firms and companies may not be able to negotiate with creditors.

Using Debt Negotiation Law Firms Won’t Prevent Future Lawsuits

Creditors can sue people at any time once they stop making monthly minimum payments whether they have hired debt negotiation law firms or not. The only debt management option that can prevent future lawsuits is filing personal bankruptcy. However, while debt negotiation companies may stop trying to negotiate, law firms keep trying. According to Georgia Debt Solutions, debt negotiation law firms can continue negotiating through the lawsuit process.

Beware of Using Debt Negotiation Companies

Debt negotiation companies may try to scam people. First, some debt negotiation companies may claim that they are non-profit, but charge fees. For instance, they may charge people substantial fees for their services which can include fees to establish accounts and fees for their services. Also, the companies can claim they are legitimate and typically negotiate up to 50 percent off the debt people owe, according to the U.S. Federal Trade Commission (FTC). However, they may not have the ability to keep the promise.

Seek Legal Assistance

Lawyers can assist with any attempts to negotiate lower debt payments or finding the right debt negotiation firms. They often will determine if other debt management options that are better for people. For instance, bankruptcy may be eligible to eliminate or reduce debt through bankruptcy.

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