Debt Lawyers: Who Are They & What Do They Do?

From 2010 to 2020, Experian reported that total consumer debt in the United States rose from $11.32 trillion to $14.88 trillion. This equates to roughly a 2% annual increase during that decade. Yet much of the increase is more recent due to the coronavirus pandemic. For instance, from 2019 to 2020, consumer debt rose by 6%.

So, it’s no surprise that many people need help dealing with debt collectors or with figuring out where to find debt relief. Luckily, there are debt settlement lawyers to help borrowers manage their debts, such as credit card or student loan debt. Read on to learn more about what a debt settlement attorney can do for you and your debts.

When To Hire A Debt Lawyer 

A debt lawyer is similar to a bankruptcy attorney in that they help you manage large amounts of debt. But unlike a bankruptcy attorney, a debt lawyer will focus on helping you pay off your debts for less than what you owe. They can also help you make arrangements with your lenders and creditors to make your monthly debt payments more manageable. Hiring a debt attorney can also help in the following situations:

• A creditor is suing you to recover the debt.

• You’re getting harassed by debt collectors who won’t stop calling you or who are being abusive.

• You aren’t sure how to approach your debts to help protect your credit score, protect your home from foreclosure, or keep your car from getting repossessed. 

What To Expect From A Debt Settlement Attorney 

Hiring a debt settlement lawyer usually comes at a cost. So, before shelling out money that could otherwise go to paying off a debt or hiring a bankruptcy attorney, you’ll want to make sure you’re getting your money’s worth. 

Depending on your financial situation, having a debt collection lawyer might benefit you in the following ways:

• They have experience with debt collectors. Your attorney probably has years of experience dealing with lenders, creditors, and anyone else who tries to collect debts. They can use this knowledge to factor in all the variables. This helps them decide what your best debt relief option is for your particular situation.

• They’re equipped to handle negotiations. Even though debt collection involves concrete concepts and numbers, there’s still a human element and some wiggle room when discussing debt relief with lenders. A lawyer can help make more persuasive arguments in borderline cases. 

• They can represent you in court if needed. Thankfully, most debt collection activities don’t lead to litigation. But if yours does, you’ll already have a lawyer that is ready to represent you in court or explain your legal options, should you decide to represent yourself or hire a different lawyer.

• They can help you avoid intimidation from collection agencies. Collection agencies may be less likely to “push you around” or try to trick you after they find out you have legal representation.

• They can call out improper behavior. A lawyer can help spot a situation where your lender breaks the law or violates a rule. This can give you more leverage when negotiating your debt.

• They have experience processing the paperwork. Having a professional handle the paperwork will help reduce any confusion you might have, as well as reduce the chances of an error.

How To Hire Debt Settlement Lawyers 

To hire a debt settlement attorney, you’ll need to research your options then figure out which one is best for you to hire. There are several good places to look for a debt collection lawyer.

• Online search engines 

Just type your location and “debt settlement lawyer” into the search bar to get some prospects to consider. 

• Recommendations from family, friends, or colleagues

This is one of the best ways to find a lawyer. You’re more likely to trust the recommendation and get the best possible service from the lawyer.

• Your local or state bar association

These professional organizations for lawyers often have a lawyer referral service that can help you find the right lawyer for your needs.

After you’ve found a few lawyers to consider, you need to choose one. This is a personal decision, but there are certain things to look for when making this decision.

First, find an attorney that’s willing to meet you face-to-face. During your case, you’ll probably communicate mostly over email, letters, or telephone. But you at least want the initial free consultation to take place in person. This will help you get a better feel for whether that attorney is right for you. Having “chemistry” with your attorney is important. The more comfortable you feel talking to them, the better they can represent you.

Second, check their law license. It’s almost certain that their license will be valid (if it isn’t, hire someone else), but checking their license is a way to see if there have been any disciplinary actions taken against them.

Third, find out who will handle the bulk of your case. Will it be the attorney you have your consultation with, or will it be someone else, like a junior associate, legal secretary, or paralegal? Newer attorneys and legal staff often do much of the “grunt” work in a case. But the attorney you are hiring should still handle major portions of your case, such as the more complicated legal strategies and negotiations with debt collectors. 

Fourth, make sure the attorney you’re considering has plenty of experience handling consumer law issues. They’ll be in the best position to offer legal advice concerning improper debt collection activities, bankruptcy law, consumer protection rights, taxes, and dealing with credit card companies. A prospective attorney can have other practice areas, but you want much of the legal services they offer to focus on debt issues.

What Debt Settlement Lawyers Might Hide From You 

Despite how the media might portray them, lawyers are bound by a strict code of ethics and rules of professional responsibility. The vast majority of lawyers follow these rules, but there are a few bad apples. 

Even if your attorney isn’t violating any rules, they might still be doing things that aren’t in your best interest. For example, they may be slow to respond in their communication with you or your debt collector. Also, they might hide important information from you. This information includes the risk of your settlement offer getting rejected by the creditor, high debt settlement fees, how your debt settlement decisions may affect your credit score, and what the chances are that your debt might actually increase.

Keep in mind that you are able to fire your attorney if they are keeping information from you, or for any other reason. 

Avoiding Debt Collection: Do It Yourself 

An ounce of prevention is worth a pound of cure, as the saying goes. And that saying definitely applies to debt relief. Stopping a debt collection action or winning your debt lawsuit is great. But avoiding both is even better.

At the first sign of financial trouble, contact your bank, lender, or creditor to learn about your debt relief options. Using debt collectors or filing a lawsuit against you can be costly for lenders. That’s why lenders want to work with you to help you pay off your debt. If a debt relief arrangement isn’t possible, there are still things you can do to avoid getting hounded by debt collectors.

For example, you can file for bankruptcy. After a bankruptcy filing, you’ll be granted an automatic stay. This stops most debt collection actions and can buy you time to find a solution to deal with your debt. Even if you can’t find a solution, it still forces the debt collection agencies to leave you alone (for the most part). Having an attorney help you file for bankruptcy is ideal in many cases, but it’s not required.

If a debt is old enough, another way to avoid debt collection is to assert the statute of limitations defense. If this defense applies to your case, there’s a good chance the lender will lose the lawsuit. When the statute of limitations deadline has passed, it can also change how the debt collector interacts with you. For instance, they can’t threaten to sue you for a debt when the statute of limitations has expired.  

Let’s Summarize… 

A debt settlement lawyer can help you find the right debt relief program and apply for it. A lawyer can also represent you if you get sued. Finally, they have plenty of experience to negotiate and communicate with debt collection agencies and lenders.

There are several ways to find a debt settlement attorney, including bar associations, the internet, and word-of-mouth referrals. When deciding which attorney to hire, be sure to get a free consultation. 

Keep in mind that you don’t always have to hire an attorney to help you with debt collectors. There may be options to help you avoid debt collection altogether. It’s best to contact your lenders or creditors at the first sign of financial trouble to make sure the problem doesn’t get worse.