Earlier this week the New York Times published an article citing a report from the Center for Responsible Lending. The report indicates that debt settlement companies may leave clients worse off. A co-author of the report goes as far as to say that debt settlement is just another way of taking advantage of people who are in dire straits to begin with. I have written on this topic in the past, but this article warrants revisiting the discussion.
My law practice focuses primarily on San Diego credit card debt settlement. Let me emphasize that this is a law practice, not a debt settlement company. To the consumer reading this, there is a distinction between a company and an attorney providing these services. Allow me to point out those differences:
Difference between debt settlement attorney and debt settlement companies
1. This report indicates that some creditors won’t even talk to a debt settlement company. They don’t have that choice when a consumer hires an attorney. My clients sign power of attorney, which permits and requires creditors to discuss the accounts with me.
2. The article continues to point out that creditors that don’t talk to debt settlement companies may eventually file a suit against the consumer for failing to make payments when due. I have had a number of clients retain my services after they have been sued while working with a debt settlement company. They come to me because the debt settlement company does not have attorneys on board and cannot represent them. I can.
3. Finally, the article points out that many consumers working with debt settlement companies wind up filing for bankruptcy in the end anyway. The Bankruptcy Code itself indicates that when your debts are high and your monthly income is not enough to cover the payments, the Federal Bankruptcy Code offers two solutions as the last resort. Shouldn’t you try all means possible before you file bankruptcy? And what about consumers that don’t fit neatly into a bankruptcy? If your household income exceeds a certain amount, you may not qualify for a Chapter 7 “fresh start” bankruptcy. In this situation, it makes perfect sense to consider debt settlement.
While this article may have some valid points as they relate to debt settlement companies, it fails to mention that there are credit card debt settlement law firms that have a stronger position than their company counterparts. The article wraps up the problem neatly into a suggestion that consumers talk with their creditors themselves. This can be an overwhelming process for an individual and emotions can take over. And let’s keep in mind that the creditor, despite the programs they might have to help you, have one goal in mind – to collect as much of the debt due as possible. Does it make sense to put your trust in a creditor with this motive or to hire an attorney that has ethical obligations to put his client’s interests first?
So there’s my rant for the day. It bothers me that these articles never seek to get quotes from debt settlement attorneys. I would welcome the opportunity to publicize what a San Diego credit card debt settlement law firm can do for consumers. It may not be as bad as the New York Times would have you believe.