Attorney vs. Debt Settlement Services: Which One Protects Your Interests?

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If you’re one of the millions of Americans facing a large amount of personal debt, you may have been tempted by the numerous ads you’ve seen for debt settlement companies. Debt relief sounds like a miraculous shortcut to a fresh financial start, but is it too good to be true?

In a word? Yes.

Like the deadly Venus fly trap plant, debt relief companies and consolidation services put up a beautiful, welcoming front, but once you’ve given them your trust and access to your finances, they’ll slowly devour you. This article will show you the truth about debt settlement services and outline the reasons a personal attorney will protect YOUR long-term financial wellbeing at every opportunity rather than using your troubling financial circumstances to endanger you even further.

 

First, let’s take a look at the methods debt settlement services will use to lure you in and subsequently destroy you financially.

 

Emotionally Manipulating Advertising

Debt settlement services rely on their aggressive advertisements to attract individuals who have poor financial literacy and are in dire straits regarding their current personal debt. They know that people who are paying attention to their ads are desperate for help and feel like they have no one else to turn to.

Dishonest Sales Pitches

Once they entice you to make contact, they’ll bombard you with an emotional sales pitch that will purposefully attempt to break down any critical thinking you might be using to analyze whether or not their services are a good match for you. Just when you’re at your most vulnerable, they’ll present a sales contract that seems to promise that they will arrange for you to be able to pay off your debt quickly.

Usually, these debt settlement companies will require money upfront. Alternatively, you may be asked to open a new bank account that you will be required to funnel money into. This money is supposed to pay off your debts.

No one in the financial world trusts or respects debt settlement service companies.

These companies are viewed with distain because they are for-profit. While it’s true that everyone needs to make a living, debt settlement services usually aim to siphon as much money from you as they can without actually helping you resolve your debts. This reprehensible approach is known far and wide in the financial world, so unfortunately for their customers, most creditors refuse to work with these scam services.

Worse yet, debt settlement companies won’t tell you about this huge barrier to success until you have already signed their contract. Once you’ve signed up, they have what they need. You will be left with a plan that won’t help you at all. Your creditors won’t have a good working relationship (or any kind of working relationship) with your debt settlement company, so your chances of being able to successfully get out from under your debts is actually worse once you’ve signed up.

We aren’t blaming consumers for getting tangled up with this awful companies.

Debt relief scams like this are highly skilled at spinning half-truths that we fully understand why people get sucked in. They cherry-pick information about their results and research; they might present evidence that their program helps clients at the 3-month mark. What they DON’T say is that their clients will be drowning in interest for years afterward. This unethical practice further demonstrates that debt relief services exist just to take your hard-earned money out of your hand when you need it most.

Your interest rates and credit score will be destroyed.

The first thing these companies will do is tell you not to make your minimum payments. They will instruct you to ignore any overdue notices or letters you will certainly receive. They’ll tell you that it’s all part of the plan, and that they have everything well under control.

While it’s true that after a long, hard-ball fight with your creditors, they MAY give up and reduce or write off your debts, but only at a great cost to your financial reputation. Your creditors will inform the credit bureaus that your debt has been negotiated, which will damage your credit score. A poor credit rating will raise your interest rates when you apply for credit cards, a mortgage, or a car loan. In some career fields, having a damaged credit score can even prevent you from being hired at all!

Creditors will still come after you directly, and debt settlement services can’t stop them.

The debt settlement company version of debt reduction will drag on for such a long time that creditors might decide to pursue legal action against you. Even if you do everything your debt settlement company has directed you to do, your creditor can gain a court order to seize your home, your vehicle, valuable belongings, and even garnish your wages directly.

If this happens, a debt settlement company cannot defend you in court, or help you with any legal proceedings. They aren’t lawyers. They don’t provide access to legal counsel, and they are not on your side.

Hire a consumer debt relief attorney to represent you.

Debt settlement companies, credit counseling and debt consolidation businesses cannot represent you in court when you are sued by creditors, they can’t give you legal advice, and they can’t represent you in court when you have the opportunity to sue creditors and collectors for violating your rights — ONLY lawyers can do so.

Why Should I Avoid Debt Settlement Companies?

Non-attorney companies that offer debt settlement services have a poor reputation in the U.S., particularly with the very creditors with whom you need to negotiate and who may sue you. And the industry is, unfortunately, plagued by scams.

A debt settlement company may commit to contacting your creditors on your behalf, but fail to do so. They may even succeed in having the debt frozen, but actually fail to negotiate the debt to an amount you can afford and then just withdraw money to pay themselves.

Assuming the debt negotiation company does as promised, they will still face many obstacles that affect you. To begin with, a creditor, most of whom are represented by a large team of attorneys, may up their game when they discover you are working with a debt settlement company instead of a law firm. This means the creditor could accelerate their collections process and file a lawsuit against you more quickly.

What makes an attorney different?

An attorney will represent you in court if your debt negotiations escalate. Your attorney will be able to give you accurate information about your legal options, your rights, and the risks you face during litigation.

Your attorney’s entire focus will be protecting YOU. Your attorney only cares about your immediate and long-term financial well-being.

Furthermore, your attorney will guarantee total confidentiality. Every communication with your attorney, their firm, and any member of their staff is protected. Only attorneys are bound by this confidentiality ethos.

Veitengruber Law can help you resolve your debt. Come in and meet with us at zero cost to you. Let us analyze and assess your current financial situation. We’ll give you the truth about whether hiring an attorney is in your best interest. If we aren’t sure that you need us, or if we aren’t sure we can help you, we will tell you up-front.

If we think there’s a high likelihood that we CAN help, then we will begin to protect you immediately. We will do everything we can to prevent your creditors from dragging you into court. We will carefully and skillfully negotiate and document each settlement to stop creditors from suing you.

In the event that you are sued, we will be prepared to ferociously defend your interests in court. You will not be alone at any stage of negotiation, litigation, or settlement.

Give us a call today to set up an appointment. The stress of mounting debt can start to take over your life; before you lose any more sleep or waste another hour fretting, allow us to step in and take action on your behalf. We can turn the tide and start taking back your life one negotiation at a time.

Image: “Broke” by Christian Schnettelker – licensed under CC 2.0

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How to Respond to a Frivolous Lawsuit

Unless you’ve had your head in the sand, you’ve probably heard reports of at least one frivolous lawsuit in your lifetime. Some people today are quick to sue, even when a lawsuit is not warranted. If you have found yourself on the receiving end of a frivolous lawsuit and/or a litigious friend – you’re not the first. It has happened to many people before you. Although this may not bring you great comfort, just know that you are not alone, and you are not the first to be wrongfully sued.

If you have been sued for something that you ultimately didn’t do or aren’t responsible for, your first reaction may be to panic. Luckily, you can relax. It can be shocking and upsetting at first, especially if the plaintiff is (was?) a friend of yours. Once the initial shock wears off, you probably want to know what you should do.

First things first: It’s important for you to understand that if you’ve only been threatened with a lawsuit, the majority of these type of threats go unfounded and it’s likely that you will not end up being sued. If a lawsuit has been brought against you, it does not mean that you’re guilty of doing anything wrong.

What is a Litigious Person?

Litigious people react to situations that make them mad or upset by taking the offensive position. They are more likely to initiate lawsuits than the average person. Oftentimes, these people are found to be insecure and unsure of themselves. They may feel easily wronged or targeted. Conversely, some litigious people are full-grown versions of the bully that we all knew and avoided in elementary school.

As long as it remains simply a threat, you have nothing to worry about (legally), and the best advice would be to steer clear of this person indefinitely (if not permanently). However, if they have taken action and filed a lawsuit against you, it’s time for you to do something about it.

Again, remember to remain calm, especially if this is a lawsuit that you know developed out of frustration or desperation. Remind yourself that the person you’re dealing with is likely lonely and possibly deserves your sympathy. Make an attempt to settle out of court (if there is anything to settle); show this person that you regret any misunderstanding. That may be all it takes for them to drop the case.

What are my Options? I’ve Done Nothing Wrong!

On the other hand, if the person you’re dealing with is acting out in anger, aggression or vindication, it is probably a good idea to consult with a local attorney. If you know a NJ attorney who can give you some advice, ask to drop by his office one day soon for a consultation. Most NJ lawyers will give you a free one-time consultation.

If you don’t know any lawyers in New Jersey personally, perhaps a friend can refer you to an attorney they trust. Run the details of the lawsuit by the lawyer you decide to meet with. It is almost certain that you’ll be advised that this is a frivolous lawsuit. This means that it has no legal merit. Believe us when we say that no New Jersey court likes or caters to frivolous litigation.

Your attorney can help you get the case settled (with the help of mediation) or dismissed (via Motion to Dismiss). If the lawsuit truly has no legal basis, it will more than likely be dismissed by the court without the need for you to even file an Answer.