Can I Represent Myself in a Debt Settlement or Workout?

You are not necessarily required to have an attorney to negotiate a debt settlement or a workout but it might be in your best interest for the following reasons:

1. An Attorney Handles the Legwork. Debt settlement negotiations can be time-consuming and stressful. You usually have to be at least 6 months in arrears (delinquent) until a creditor will discuss a settlement. During this time, the creditor will often transfer the debt to different departments or sell the debt to another creditor/ collection agency. Finding out who actually holds the debt (not to mention negotiating the settlement itself) takes a lot of time. You are often put on hold for hours and never speak to the same person. In the meantime, various collection companies might be harassing you; contacting your family or employer; and filing or threatening to file lawsuits (possibly putting your assets at risk, among many other problems). Hiring an attorney to handle the settlement would avoid you having to go through all that stress.

2. An Attorney gets the Creditor’s Attention. It seems creditors are more receptive and take a settlement more seriously when an attorney is involved. At least in our experience, creditors usually know Campbell Law Firm handles bankruptcy/ debt resolution cases. Creditors seem to be more willing to settle when we are involved because they want to avoid the possibility of receiving little to no funds in a Bankruptcy, among other reasons. They know the client is serious because they have hired an attorney to resolve to resolve the matter. Although you can tell a creditor you are considering Bankruptcy, it usually holds more weight coming from an attorney.

3. An Attorney Protects you and Handles the Paperwork. You might be opening yourself up to fraud and being taken advantage of when you are representing yourself. When you do not have an attorney, it is easy for creditors to take advantage that you might not know all of your rights and protections. There are also a lot of scammers out there pretending to be creditors/ debt settlement companies; and they can steal your identity, among other issues. Even if not a scam, different creditor collection departments/ agencies might not coordinate/ communicate with each other. You could pay a settlement only to find out later that the file was never properly marked as settled or, in the case of a judgment, the judgment was not marked satisfied. Finally, the creditor might require you to sign paperwork that is not in your best interest, such as a Confession of Judgment. An attorney would make sure you are working with the authorized creditor representative; review any settlement paperwork; advise you on any agreements or legal documents that you should sign; and make sure the settlement is final.

In addition to the above, an attorney helps advise you on whether a settlement or workout is in your best interest; the likelihood of success; the pros and cons; what to expect; the impact on your credit; the anticipated settlement amount; and which creditors you should settle vs. continue to pay, among many other benefits. Your attorney will also explain the process and procedures to you, among many other aspects of your situation.

Different firms/ attorneys handle settlement negotiations differently (and all settlements are different) but you can find more information about our process here. At our firm, we treat your money as if it were our money, meaning we work hard to try to negotiate the best settlement possible within reason for you. Our goal is to help you reach the best possible outcome given your situation. Finally, our firm works with our clients to try to stay out of financial trouble in the long-term by giving them tools to learn to live on a no-surprise budget and reestablish credit for a successful financial future. This is another benefit you might not get if you try to negotiate a settlement on your own.

Contact our office if you have any questions. Consultations are free.