Credit Repair Lawyers
Credit repair lawyers provide assistance to people who have incurred serious debt problems and need to find solutions to the bad credit rating incurred as a result of nonpayment of that indebtedness. These credit repair attorneys are well versed in consumer law so that every possible legal action is taken to repair the credit of a client. The client will be made aware of the rights provided under the federal Fair Debt Collection Practices Act (FDCPA), and the strict rules of conduct for debt collectors engaged by creditors under that Act. For instance, collection agencies are not allowed to call a debtor at work, before 8:00 a.m., or after 9:00 p.m. to collect a payment. What they can say to someone is limited to polite language. There can be no racial slurs, insults, or threats.
On the positive side, provided that the amount owed is legitimate, a debtor can try to negotiate with the collector for a reduction in the amount owed or a new payment arrangement. If the debt is not a legitimate one, the person being harassed should send a complaint to the creditor, and the collector should be told to cease calling. If further action is taken (such as a lawsuit), the "debtor" will engage credit repair attorneys to respond.
Persons with a bad report are sometimes the victims of events outside their control that cause them to get behind in payments. A job loss, illness or accident can create a serious loss of income. There is no dispute about the monies owed, but the funds are not there. This slow or non-pay situation will be reflected on the report until the matter is cleared up. Credit repair lawyers will talk to creditors to reduce the amount of debt by the reduction of interest and/or the principle in the interest of getting it paid off. Written proof of debt that the client can review will turn up any errors that may have taken place, so those can be erased from the record. Sometimes the reduction that results from these actions will be as much as 60% less than the original amounts owed.
One way the credit repair attorneys manage the debt of their client is to combine the debts so there is just one payment. That payment is made to the attorneys, who disburse payments to the creditors. Other times, the debtor simply pays the lesser amounts to the creditors himself. The end goal of getting the debtor out from under the burden of high payments is accomplished either way, and the only difference between the two is the amount of money the client ends up paying to the credit repair lawyers.
The least popular alternative that credit repair attorneys will propose is the filing of bankruptcy. If the situation is hopeless because the person owing the bills has been unable to get a job, or has ongoing health problems, there may be no other alternative. Filing under Chapter 7 of the bankruptcy laws will erase the debt, and under Chapter 13 a new schedule of payments and a reduction of indebtedness is the solution. The drawback of filing bankruptcy is, it stays on a person's credit report for ten years. It isn't impossible to get credit after that, but it is certainly difficult. Added to that are the legal fees incurred.
There are companies other than credit repair lawyers who claim to help a debtor clean up a bad report. Some of them claim to guarantee the erasure of a person's debt, and suggest creating a new identity to circumvent bill collectors. Companies that make such claims cannot be trusted. No one can make such a guarantee, and changing identities is illegal, and if someone goes along with a scheme like that, they are committing fraud. These companies will usually charge high fees for their services, and sometimes request a fee before they have done any work. This should be enough to make anyone run the other way.
The Federal Trade Commission suggests that self help may be the best way to accomplish repair. There is nothing magic about a credit repair lawyers calling creditors to negotiate a reduction in the amount owed, or in the interest charged. A debtor can do that as well. Also, the law allows a debtor to question any credit report entry, and request written proof. The reporting company makes note of the dispute in the persons report, and contacts the creditor. It may take a month or more for both sides to do the paper work. If the end result is proof the amount is not owed, that change must appear on the record. In the event an agreement is reached on the legitimacy of the claim, the debtor may then attempt to negotiate with the creditor for a realistic repayment plan. There was not any recorded negotiation, but the Bible tells of a creditor who seriously reduced a debt: "Then said he to another, And how much owest thou? And he said, An hundred measures of wheat. And he said unto him, Take thy bill, and write fourscore" (Luke 16:7)
Negative information will remain on a persons report for seven years. Bankruptcy will remain for ten. During that time, a strict budget should be followed, and no new debt incurred. There are free counselors that can help with this process so one is not paying credit repair attorneys along the way. The direction a person chooses to go depends largely on the amount of trust that exists in one organization or the other.
Attorney For Debt EliminationAn attorney for debt elimination has more than one tool at his disposal to help a client get out from under out-of-control debt and get his financial house in order. Legal assistance can be enlisted either before, or after, lawsuits have been filed by creditors. The first step a lawyer will take is to gather together all of the client's records showing how much is owed to what creditors. The client will also provide proof of income and probably list monthly bills outside of the indebtedness, so the attorney can get a good picture of his client's overall financial state. The next step for the attorney to take is to contact the creditors and negotiate for settlement of the finances owed, which may be a reduction of as much as sixty percent. If the lawyer for debt elimination is successful in negotiations with all the creditors, payments will be substantially reduced. The debtor must realize at this point that there is no more credit available from those creditors until the debts are paid in full. In the event that something catastrophic has happened to the debtor, such as job loss or severe health problems, the answer to the financial problems may be to file bankruptcy. A lawyer will be able to guide his client through that process as well.
Not everyone who offers to help with debt elimination is a lawyer, and there are people who will cheat a debtor out of his money by charging fees up front, and never delivering on their promises. The Federal Trade Commission advises people to watch out for claims such as: "Credit problems? No problem!", or "We can erase your bad credit--100% guaranteed," or "Create a new credit identity--legally." Consumers should save their money and shouldn't believe these claims. These companies will not properly inform debtors of their legal rights, will recommend that debtors not contact creditors themselves, and if they suggest that the debtor creates a new identity, they are leaving this person open to fraud charges. Consulting an attorney for debt elimination is the best way to work out of debt legally and properly.
One of the first steps in the process involves an attorney looking at a debtors credit report to determine if the information there matches what the debtors records. If there is a discrepancy, the lawyer for debt elimination will contact the creditor to find out why. If they are not cooperative, the attorney will file a formal complaint. The complaint will appear in the debtors credit report so anyone checking their credit will know that claim is under dispute. If they are cooperative, however, then it may be the first step in lowering the total indebtedness.
If debts have reached a point where collection agencies are calling, it is important for debtors know what their rights are. Debtors threatened with arrest, job loss, or permanently ruined credit should know that none of these things are true. Lenders can, in certain cases, garnish wages, but not without a court order. By law, they cannot call individuals at work after the person has asked not to be contacted at their place of employment, and they have to cease calling completely if the borrower writes them a letter telling them not to call anymore. The above rules apply directly to collection agencies and limits placed on the creditor who tries to call directly are somewhat different from state to state. One will need to contact the state's Attorney General or a lawyer for debt elimination to find out what the rights are in their state.
Another step a legal professional might suggest one take is debt consolidation. A lawyer for debt elimination can help those in debt find a lender who will lend enough to pay all the other debts off, resulting in one consolidated bill at one lower interest rate than the credit card rates they have been paying. The interest is fixed for the life of the loan, which is an improvement over credit cards, which can raise interest rates at any time. Sometimes an attorney for debt elimination may, after getting the debts lowered, act as a collection agent whom clients a single monthly payment, which he then distributes to the creditors. This prolongs the attorney-client relationship, however, and a monthly fee will be required for his service. The fastest way of finishing ones business with an attorney for debt elimination is to pay the creditors himself after the settlements are agreed to.
If debt seems insurmountable, it might be the time to call in the assistance of a legal professional. While borrowers can call creditors themselves and negotiate a lower interest rate or even get a settlement in the amount, some find the process less stressful and the results more beneficial when a lawyer is involved. Whatever option one pursues, it is important to find a way out of debt. "Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law." (Romans 13:8)