If you are unable to manage your debts and you want to negotiate with your lenders to settle for less than the full balance, then you may be considering working with either a debt management program or with debt settlement lawyers. If you find yourself in this situation, it can be hard to know who to trust to get you out of the situation you are in. It is important to consider this decision carefully, and to weigh the pros and cons of a debt settlement lawyer versus a debt management program.
Choosing Debt Settlement Lawyers or Debt Management
To choose between debt settlement lawyers or debt management programs, it is important to understand some key similarities and differences:
- Both debt settlement lawyers and debt management programs can assist you in negotiating a deal with your creditors wherein you create a payment plan or make a lump sum payment for less than the total debt that you owe. Creditors will often agree to this because they don't want you to go bankrupt, and they'd rather get you to pay something than nothing at all. Both debt settlement lawyers and debt management programs have established relationships with many creditors and both can help you to properly negotiate a lower payment for your debt.
- Debt settlement lawyers, like all lawyers, must pass the bar exam and must adhere to a professional code of ethics that binds attorneys. According to this ethical code, lawyers have a fiduciary duty to their clients. This means they can be disbarred and lose their license to practice law if they do not act in their clients best interests at all times. Lawyers are also bound by this same code to charge fair fees and to be up front about all costs associated with representation. Debt management programs, on the other hand, aren't bound by any such code. Unfortunately, this means some companies are dishonest and will either charge unfair fees, stock a contract with hidden fees, or do things that may not be in your best interest.
While debt settlement lawyers and debt management companies offer similar services and options to help you deal with debt, you are usually better off going with a debt settlement lawyer since you will know exactly what you are getting. The right legal help can get you out of financial trouble, without putting you at risk of ending up in a worse situation due to the actions of an unethical company.