Finding help when you’re struggling with debt can be difficult. One option is to hire a debt relief lawyer. These lawyers can help you negotiate with your creditors and get your debt under control. You can also get the bankruptcy filed if that’s your best option.
But how do you know if hiring a debt relief lawyer is right for you? And how do you go about finding and hiring the right lawyer?
This guide will cover everything you need to know about debt relief lawyers. We will discuss the different types of lawyers, process of finding a lawyer and the pros and cons of hiring a debt relief lawyer.
When To Consider Hiring A Debt Relief Lawyer
If you are considering hiring a debt relief lawyer, there are a few things you need to know.
First, consulting with a lawyer as soon as possible is essential. The longer you wait, the more difficult it will be to get your debt under control.
Second, not all lawyers are created equal. You need to find a lawyer specializing in debt relief with a good track record of helping clients get out of debt.
The Different Types Of Debt Relief Lawyers
When hiring a debt relief lawyer, it is essential to understand the different types of lawyers available:
- Consumer bankruptcy lawyers
- Debt settlement lawyers
- Credit counseling lawyers
Each type of lawyer has its specialty and approach to debt relief. Debt settlement lawyers are experts in helping people negotiate settlements with their creditors. On the other hand, credit counseling lawyers provide education and counseling to help people manage their debt load.
Every individual’s needs are different, therefore, your lawyer might check every single detail of your finances from daily life to lifestyle expenses. These expenses are necessary to be tracked since your lawyer has to find a way to avoid you from declaring bankruptcy.
How To Find The Right Debt Relief Lawyer
Here are a few tips for finding the right debt relief lawyer to help you get your life back on track.
1. Do Your Research
Before you start your search for a debt relief lawyer, it’s important to do your research. Your lawyer must be reputable and qualified to help you with your specific situation.
When narrowing down your search for a debt relief lawyer, you should know the following:
- Make sure the lawyer has experience in the debt relief field.
- Ask for referrals from past clients.
- Take the time to interview potential candidates to ensure they are a good fit for you.
It’s important to remember that you are hiring this lawyer to help you get out of debt—so be sure to pick someone you feel comfortable working with and who has your best interests at heart.
You need to find someone with a lot of experience in the field who knows the law’s ins and outs. You also need to find someone you can trust who will be honest with you and provide assistance in getting out of debt quickly.
For instance, if you’re stuck in debt because of an Amazon business, you might need a lawyer with the related experience to help you through it.
Talk to your friends and family and see if they have any recommendations. Once you have a few options ready, you can physically visit them for an initial consultation. Once you’ve narrowed down your list, take the time to interview each. Ask them about their experience, their fees, and what they think your best options are.
You can easily find everything custom made for yourself. For instance, whether its something intangible like software or a tangible product like business cards. Why shouldn’t you find a lawyer who can provide you with bespoke services for your needs?
Remember, hiring a debt relief lawyer is important, so take your time and make sure you don’t choose poorly.
2. Consider Your Options
You must remember a few things as you consider your debt relief options. First, think about what you’re hoping to achieve with the legal services. Are you looking for someone to do debt negotiations with your creditors? Do you wish to file for bankruptcy?
Once you know what you’re looking for, it’s time to start doing your research. Select a few potential lawyers, then set up free consultations with each.
Here, you want to ask as many questions as possible to check the lawyer’s capabilities. Ensure that whoever you choose is the right fit for you. A good lawyer can help you catch a break and get you out of debt problems.
Finally, you should have basic knowledge about statute of limitations, legal practice areas, and bankruptcy law (just so you don’t go in without any information).
3. Check Credentials
Checking a lawyer’s credentials is one of the most important things you can do when hiring a debt relief lawyer.
Find out about the total years of experience of the lawyer and get references from past clients. You can also check with the Better Business Bureau or your state’s bar association to check for the lawyer’s background and whether there are any complaints on his/her record (confidentiality of attorney-client relationship is a good area to start background research on)
Most importantly, trust your gut feeling. If something about the lawyer doesn’t feel right, it’s probably best to move on and find someone else.
4. Consider The Costs
So, you’ve decided to hire a debt relief lawyer. Before you make your final decision, there are a few things you need to keep in mind.
First of all, you need to consider the costs. If you want to get a rough estimate, consider using a debt relief calculator. Lawyers can be expensive, and you want to ensure you get good value for your money. Ask your lawyer for an estimate upfront to know what you’re getting into.
Also, make sure you choose a lawyer licensed in your state. Not all lawyers are licensed to practice in every state, so it’s important to do your research before selecting. The best practice here is to look for a professional law firm.
5. Get A Referral
Ask around for referrals. Chances are, you’ll find someone who has been through a similar situation and can recommend a good lawyer. Your best bet is to make phone calls and ask around to find good lawyers.
But don’t stop there. You can also look online for reviews or recommendations. Just do your homework and research any lawyer before hiring them. You should find out whether the lawyer has a history of dealing with credit card debts, student loans, or medical bills debt.
6. Check Reviews
When you’re looking to hire a debt relief lawyer, it’s essential to check reviews. You want to ensure you’re hiring someone with a good reputation for helping their clients get out of debt.
You can read reviews on Yelp, Google, or the lawyer’s website. It’s a good idea to ask your friends and family if they know of any good lawyers, and then do your research to see which is the best fit for you.
The Process Of Working With A Debt Relief Lawyer
When you’re ready to hire a debt relief lawyer, there are a few things you need to keep in mind. First, you should be prepared to provide as much information as possible about your debt. This includes the amount of debt you have, the creditors you owe money to, and any documentation related to your debts.
In many cases, debt relief lawyers require lump sum payments or monthly payments. You might need to set up a repayment plan that is less than the total amount of your debt. But remember, these are usually temporary sacrifices to get out of debt for good.
The Advantages Of Working With A Debt Relief Lawyer
Let’s look at the advantages of hiring a debt relief lawyer.
I. Debt Relief Lawyer Offers Professional Help
You can leverage the professional expertise of a debt relief lawyer. You can find it overwhelming if you have to take on the entire process yourself. It’s better to hire a professional instead.
Debt relief lawyers know the laws inside and out, so they will learn how to represent you and offer legal advice. A competent attorney will keep your safety and interests in mind while dealing with the case.
II. Stress Reduction
Dealing with a creditor directly is likely to be stressful for you. The primary goal of their campaign is for you to repay your debt. Your ability to pay them is not their concern; they want to get paid somehow.
You can simplify things by hiring a bankruptcy filing lawyer or debt relief lawyer. The lawyer will do all the heavy lifting to resolve the situation and negotiate on your behalf.
III. Avoid Wage Garnishment
In addition to understanding the law, attorneys will strive to minimize the risk of litigation on your behalf. Creditor negotiation is their area of expertise, and they know when to negotiate with your creditors.
For instance, if your state allows wage garnishment, you may be more likely to be sued. A similar situation would apply if you could not resolve the debt independently. You could be sued and need to retain counsel to answer the suit or face a default judgment.
The court may rule in favor of the creditor, leaving you liable for the entire debt amount plus interest, penalties, fees for legal representation, and your own.
The skills and experience of a debt relief lawyer can be invaluable if you are threatened with wage garnishments. If you seek debt relief or bankruptcy protection, it might be beneficial to speak with a lawyer.
IV. End Calls From Creditors
It is stressful to receive calls from creditors. Receiving such a call can completely ruin your day. When you hire a debt relief attorney, you can end those annoying and infuriating calls.
Your lawyer is responsible for advising you on how to get the calls to stop coming in. In some cases, filing for bankruptcy may be an option.
V. Achieve Financial Stability
An experienced debt relief lawyer can assist you in restoring order to your life. It can be challenging to deal with a heavy debt load when you struggle to pay it off. However, an excellent legal representative can make all the difference. Alternatively, they may be able to negotiate with your creditors and reduce your debt or lower the amount you owe.
A debt relief lawyer will recommend ways to organize your finances and build a solid financial strategy that will serve you well going forward.
The Disadvantages Of Working With A Debt Relief Lawyer
Even though debt settlement attorneys can be a huge help, they also have some disadvantages. Let’s take a look:
A. Creditors May Not Agree To Negotiate
It is difficult to reach a debt settlement with all debt collectors because they may disagree. It is not uncommon for some people to flat-out refuse. A repayment plan will help you address your debts, and you’ll need to explore other options.
If you qualify for a debt consolidation loan, you might be able to reduce your debt. Paying off your older loans might be possible with a new loan. Veterans and people going through hardships may be offered other debt relief programs and debt repayment plans by some credit card companies.
B. Additional Late Fees
Your total debt valuation can grow while you are working on debt settlement. Generally speaking, your lender is unlikely to offer a debt settlement if you have only missed one or two payments. Many people stop making payments entirely to get their creditors to negotiate if they are making timely payments.
In addition, while you aren’t making payments, interest and late fees will continue accumulating, resulting in a rise in your debt. It is difficult to manage more debt as you attempt to pay off old ones.
C. Impact On Your Credit Score
There are several ways in which debt settlement affects your credit score. Your credit score will be impacted if you lag behind on your debt payments to qualify for a debt settlement. Accounts that are settled are also closed. Credit availability and the length of open accounts affect two factors of your credit score.
Settlements are often reported as “partial payments” to the credit bureaus. This can negatively impact your credit score as well. In addition to the debt amount you’re negotiating with the creditor, you might also be able to negotiate this. Make sure the creditor reports the settlement as “paid in full.”
It will stay on your credit report for seven years regardless of its appearance. Over the next seven years, you can work on rebuilding your credit to mitigate the negative effects of the debt settlement.
D. Tax Consequences And Expenses
It is also possible to incur tax consequences when you settle your debt. Cancellation of debt refers to the earnings you make during a debt settlement. According to the IRS, this income is taxable. Taxes are generally triggered when you save $600 or more and report it as income. It’s impossible to hide this because the IRS will keep a settlement record.
A large retainer may be required initially, and you’ll be responsible for ongoing fees, depending on your situation. If you’re working with a lawyer handling many other cases, getting your file moved to the top of the pile may take a while.
It is still better to give this tough task to a professional than to do it yourself. Like what you would when you need to create a professional website, you outsource to expert developers.
But despite these disadvantages, debt relief lawyers offer a lot of value and can help you out of a tough spot. So it’s crucial to weigh the pros and cons before deciding.
What To Expect When Working With A Debt Relief Lawyer
Your lawyer will sit down with you and review your entire financial situation. This includes reviewing all of your debts, assets, and monthly budget. They will then create a financial plan specifically tailored to your needs.
Further, the lawyer will negotiate with your creditors on your behalf. This includes working out a payment plan you can afford and trying to get your interest rates lowered or waived.
They will also help you through the entire process. From filing for bankruptcy to completing your repayment plan, they will be there with you every step of the way.
With professional help, you can repay debt faster than you could on your own. They have the knowledge and experience to navigate the complex legal system, and they can help you negotiate better terms with your creditors.
On the other hand, debt relief lawyers can be expensive. And not all of them are the same – you need to find someone knowledgeable and trustworthy.
By following these guidelines, you’ll be able to find the right lawyer for your unique needs and get started on your path to debt relief.
If you want accurate debt management estimates and calculations, we can help you with our Debt Payoff Planner.
Burkhard Berger is the founder of Novum™. Follow Burkhard on his journey from $0 to $100,000 per month. He’s sharing everything he learned in his income reports on Novum™ so you can pick up on his mistakes and wins.