what is the difference between a debt relief agency and an attorney at law

Both go through the court system where a judge, ultimately, decides the outcome. Both also become part of the public record. By contrast, debt settlement most often is a private negotiation between someone representing you — an attorney or debt settlement company — and your creditors.

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Do debt relief companies really work?

An attorney will go over all of your options with you. A good attorney will go over all of your options. The attorney can help you figure out if you really should try to settle your debts or whether you should do something else, like file for bankruptcy, for example. A debt settlement company will probably just try to convince you to hire it to settle the debts.

Do I need a lawyer to collect a debt?

Jul 29, 2009 · In sharp contrast, if the creditor retains a collection law firm, the creditor will be in constant contact with the debt collectors, his/her attorney and the support staff of the law firm working to collect his debt. 4. Results. The best result a collection agency can obtain for a creditor is a legal Judgment that orders the debtor to pay the debt.

Is it better to hire a lawyer or debt settlement company?

What is the difference between a Debt Relief Agency and how does it relate to bankruptcy cases in California?

Does the Fair Debt Collection Practices Act apply to creditors?

While many creditors work with collection agencies, the fact is that working with a law firm that focuses on debt collection can offer tangible benefits over a debt collection agency. At the Law Offices of Scott N. Bergman, LLC, we maintain a strong commercial and …

What does debt relief agency mean?

(12)(12A) The term “debt relief agency” means any person who provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration, or who is a bankruptcy petition preparer under section 110, but does not include— (A)any person who is an officer, director, employee, ...

Who can negotiate debt for me?

A credit counselor can help, and they often provide services through nonprofit organizations for free. Be wary of companies that claim they can renegotiate, settle, or change the terms of your debt. Decide on the total amount you are willing to pay to settle the entire debt.Mar 29, 2019

What should you not say to debt collectors?

3 Things You Should NEVER Say To A Debt CollectorNever Give Them Your Personal Information. A call from a debt collection agency will include a series of questions. ... Never Admit That The Debt Is Yours. Even if the debt is yours, don't admit that to the debt collector. ... Never Provide Bank Account Information.Sep 21, 2021

What happens if a debt collector won't negotiate?

If the collection agency refuses your settlement offer, consider contacting the original creditor of the debt. This is possible only if the original creditor still owns the debt and hired the collection agency to collect on its behalf.

How Debt Settlement Companies Work

Debt settlement companies often claim that they’ll be able to talk your creditors into settling your unsecured debts for pennies on the dollar. If...

Why Hiring A Lawyer Might Be A Good Idea

If you think you need help settling your debts or are unsure about whether negotiating settlements is a good idea, a skilled attorney can provide y...

You Can Settle Your Debts on Your Own

You can arrange a debt settlement yourself. If you are certain that you want to settle your debts rather than filing bankruptcy or some other optio...

What is debt collection agency?

At its core, a debt collection agency is a company that lenders and creditors hire after the individual or business has failed in its own attempts to collect a debt. Most collection agencies work on behalf of the creditor and attempt to collect their debts for a fee or percentage of the amount collected pursuant to their efforts. Collection agencies have countless clients, debtors, and collection matters at any one time, as they are usually the first line of defense for a creditor to recover a debt or an unpaid account. Methods that collection agencies use are:

Is it illegal to hire a collection agency?

Recent investigations by the FBI, the Federal Trade Commission, and the Consumer Financial Protection Bureau have revealed that debt collection agencies sometimes engage in improper and illegal debt collection methods, including falsely identifying themselves as law enforcement and making improper threats to the debtor. This type of behavior is prohibited by the Fair Debt Collection Practices Act and has even led to a number of recent arrests. As such, it is important to do your due diligence when hiring a collection agency.

What is an alternative to a debt settlement company?

An alternative to a debt settlement company is a non-profit consumer credit counseling service. These non-profits can attempt to work with you and your creditors to develop a debt management plan that you can afford, and that can help get you out of debt.

What is debt settlement?

Debt settlement companies are companies that say they can renegotiate, settle, or in some way change the terms of a person's debt to a creditor or debt collector. Dealing with debt settlement companies can be risky. Debt settlement companies, also sometimes called "debt relief" or "debt adjusting" companies, often claim they can negotiate ...

How to avoid paying credit card debt?

Avoid doing business with any company that promises to settle your debt if the company: 1 Charges any fees before it settles your debts 2 Represents that it can settle all of you debt for a promised percentage reduction 3 Touts a "new government program" to bail out personal credit card debt 4 Guarantees it can make your debt go away 5 Tells you to stop communicating with your creditors 6 Tells you it can stop all debt collection calls and lawsuits 7 Guarantees that your unsecured debts can be paid off for pennies on the dollar

Is forgiven debt taxable income?

If a portion of your debt is forgiven by the creditor, it could be counted as taxable income on your federal income taxes. You may want to consult a tax advisor or tax attorney to learn how forgiven debt affects your federal income tax. Read full answer.

Can a debt settlement company settle all your debts?

In many cases, the debt settlement company will be unable to settle all of your debts. If you do business with a debt settlement company, the company may tell you to put money in a dedicated bank account, which will be managed by a third party. You may be charged fees for using this account.

What is debt relief?

Debt relief includes various programs or plans to get you out of debt without declaring bankruptcy. Either path can be right for you, but it is important to understand debt relief's pros and cons.

What are the pros and cons of debt settlement?

Pros of debt settlement companies: You don't have to spend time consolidating or negotiating. Your credit counselor can educate you on improving personal finance. Paying back a large amount of debt can feel more achievable with support. They can handle calls or other harassment from debt collectors.

How does bankruptcy work?

Bankruptcy and debt relief have some similarities — both options have guided programs to help you get out of debt. Bankruptcy is a legal path where you file in court and work with a trustee to discharge or pay back some debts. Debt relief includes various programs or plans to get you out of debt without declaring bankruptcy.

What is debt consolidation loan?

A debt consolidation loan will pay off all your creditors at once to stop interest and harassment, and you will just have one payment going forward. This can help overwhelmed people who feel like they cannot keep their creditors and debt straight.

Should I be wary of credit card companies?

If a creditor or credit card company is offering a debt relief program, you should be wary. They are not working in your best interests and are only interested in their own debt settlement.

What happens if you miss a payment on a loan?

A loan to pay off debts can seem like a no-brainer, but there are consequences you should consider: Risking your assets and property if they are used as collateral for the loan. Missing a payment could result in your home or car being seized and sold. A debt lawsuit from the loan company if you cannot pay.

Does bankruptcy lower credit score?

Month after month of unpaid credit card debt will lower your score over time, whereas declaring bankruptcy will lower your score right away. Through bankruptcy, however, more of your debt can go away, which can lead to improvements in your credit score over time.

What to do if you think a debt collector violated the FDCPA?

If you think a debt collector has violated the FDCPA when trying to collect a debt from you, consider talking to an attorney to get advice about your options. You might be able to sue and recover money and other damages.

What is debt collector?

Under the FDCPA, a "debt collector" is generally a third party regularly engaged in the business of collecting or attempting to collect debts owed to another person. The FDCPA's definition of "debt collector" includes any person who: 1 uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts or 2 regularly collects, or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due to another.

What is the FDCPA?

Congress created the federal Fair Debt Collection Practices Act (FDCPA) to prohibit debt collectors from using unfair, deceptive, or abusive practices when collecting consumer debts. The FDCPA places numerous restrictions on what debt collectors are allowed to do when collecting debts and provides consumers with certain rights ...

What is a creditor in FDCPA?

The FDCPA defines a "creditor" as the person or entity that extended you the credit in the first place (in other words, your original lender). Because the FDCPA is designed to protect debtors against third-party debt collectors, it doesn't apply to your original creditor or its employees.

Is a process server a debt collector?

Persons not regularly engaged in the business of collecting debts. If a person or entity doesn't regularly collect debts on behalf of others, it might not be considered a debt collector under the FDCPA.

Is a debt collector a security interest?

Debts obtained as security in a commercial credit transaction with the original creditor. If the person or entity obtained the debt as a security interest in a commercial credit transaction with the original creditor, it isn't considered a debt collector.

Does FDCPA apply to corporate debt?

The FDCPA only applies to consumer debts incurred for personal or household expenses. It doesn't apply to corporate or business debts. Government employees when collecting debt in their official capacity. Federal or state employees are exempt from the FDCPA when collecting debts as part of their official duties.