DEBT SETTLEMENTS

Debt Defense Lawyer or Debt Consolidation Company: What's the Difference?

Debt Consolidation Companies

Businesses that advertise services including "Debt Consolidation" and/or "Debt Settlement" have varying business models. Some companies debt consolidation are simply lenders or their affiliates, who offer to refinance multiple outstanding debts into one loan, with a single monthly payment. The fees for this service are generally included as part of the loan transaction. Companies that solely offer debt consolidation loans include names like Lending Club, Lending Tree, Avant, Upstart, Accredited, and Americor, among many others. These companies offer financial and lending services, not legal or settlement services.

Debt Settlement Companies

In general, businesses offering "debt settlement" services charge fees that are earned by negotiating the settlement of delinquent loans and credit card accounts. These companies are regulated under state and federal laws that establish specific disclosures, limitations, and requirements regarding fees and contract terms, due to the prevalence of fraud and predatory conduct committed in the name of "debt relief." To obtain exemptions from these regulatory measures, many of these companies are operated through an affiliation with a lawyer or law firm, or as a law firm that provides "law-related services" short of actual legal representation. Regardless of whether these companies are affiliated with or operated as a law firm, they do not ordinarily file appearances in collection lawsuits as the client's attorney of record. In the event that a lawsuit is filed to collect one or more debts that are the subject of settlement negotiations, services are usually limited to legal assistance, such as forms preparation, and in some instances, hiring local "appearance attorneys" to show up on court calendars.

Carlisle Law Firm's Debt Settlement Services

The advantage of hiring an experienced debt defense lawyer to settle your outstanding debt is that they have a much bigger "toolbox" at their disposal. If a debt collector files a lawsuit on one of the debts they were hired to settle, there is usually very little a debt consolidation company can do to help you avoid the likelihood of a money judgment, garnishments, and property liens. Carlisle Law Firm can identify weaknesses in the plaintiff's case, raise appropriate defenses, and fight against the entry of a money judgment. If any of the debt collector's actions or communications have violated one or more consumer protection statutes, a debt settlement company is unlikely to take any action, even if they recognized the existence of such violations. Carlisle Law Firm will file counterclaims in lawsuits, bring separate claims, or use the claims as leverage in settlement negotiations to reduce or eliminate your debt. From our standpoint, you owe nothing more to the debt collector or its attorney than they are able to prove in court. If consumer rights violations exist, the debt collector may also owe you money. The best debt settlements take all relevant factors into account. Recognizing and understanding the factors affecting debt settlement is much easier for an attorney with substantial knowledge and experience in collection, contracts, and consumer rights law, credit card and loan financing, sales of asset backed and debt backed securities, and civil trial and post-judgment collection procedure.