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What Does a Credit Lawyer Do?

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Scales with time and moneyPersonal debt in the US has been steadily rising and many Americans are now saddled with debilitating credit incurred from unpaid student loans, house mortgage and monthly insurance premiums. Problems arise as interests and surcharges pile up, rendering one incapable of paying off maturing obligations. To improve an individual’s credit score and enter into a sound debt settlement, one needs the services of a credit lawyer.

A credit lawyer offers procedural knowledge and technical expertise in the field of credit repair and debt management. While a layman can do some of these things without the charter of practicing law, a credit attorney offers his or her long years of experience and expertise to ensure that goals are met efficiently and effectively.

With economic difficulties, many working individuals are now relying more on credit cards to augment their income. Rising costs have tremendously affected the credit spending of many people, resulting in burgeoning debts and higher percentage of earnings allotted to credit servicing.

But the road to financial emancipation and freedom from debts can actually be smooth with the help of a dynamic and experienced credit lawyer. The debt attorney can present an individual with effective plans and payment schemes that would ultimately lead to overcoming financial struggles. A credit lawyer offers a wide array of services with his or her skills and knowledge honed through years of practice.

Debt Settlement

This is an approach where the end is to reduce the debt or obligation of the debtor at an agreed balance that will be regarded as full payment. This is a form of debt relief but is regarded by financial experts to be extremely dangerous.

Apparently, many cases of debt settlement have resulted in debtors’ credit score being heavily damaged. Thus, consulting with a trusted and reputable credit attorney is very important to make the debtor’s debt settlement efforts fruitful.

In debt settlement, a debtor pays off a creditor after mutually agreeing on a much lower lump sum amount that what was owed. Usually, only unsecured debts such as credit cards and medical bills are eligible for debt settlement.

After being engaged by the debtor, the credit lawyer has two goals in mind: one is to make the client’s financial situation plain and set a large lump sum of money to ensure approval on the part of the creditor. The debt settlement plan of a debt attorney would depend on the debtor’s current income level, ability to repay the debts and the total amount owed to the creditor.

As such, hiring a credit lawyer would be a better choice than engaging the services of a credit settlement company. The debt attorney can help you, the client, explore options and choose which would best fit to the situation. Moreover, should the debt settlement efforts would lead to creditors suing the debtor, the credit lawyer can surely be to the rescue and defend the client in court.

Debt Consolidation

In cases of several unsecured debts, there could one debt having higher interest rates than the other. To optimize the borrowing cost incurred in outstanding loans, a debtor would get a new loan which would cover all other unsecured debts.

This is especially true if a debtor can secure a bigger loan with a lower interest rate than the rates being imposed on existing and maturing debts. But there are several pitfalls that debtor should consider before deciding to push for a debt consolidation program.

In debt consolidation, debt terms are being extended and sometimes would require home equity, thereby endangering and exposing an individual’s home to risks. Thus, it is important that the debtor should engage the services of a debt attorney who can give sound advice on the desirability of debt consolidation on specific situations.

Understanding the nature and scope of one’s debt, as well as various applicable finance laws, would a very difficult task. A credit lawyer necessarily possesses the experience on dealing with creditors in debt consolidation and the legal mind to ensure proper settlement of unsecured debts in lieu of a single new obligation.

Credit Repair

Nowadays, having a good credit score would mean ability to incur higher loans for lower rates. Also, an individual’s credit score can mean being able to buy own house through mortgage. It is for these reasons that individuals should aggressively challenge questionable negative entries on one’s credit report.

The goal of credit repair is to clean up a person’s credit reports and improve the total credit score. The services of a credit lawyer can be availed of to perform a number of services with the aim of improving the debtor’s credit standing, to wit:

  • Review credit reports for potential errors or ways to improve your score;
  • Negotiate with credit reporting agencies to remove negative items from credit report;
  • Negotiate the settlement of amounts with the creditors; and
  • Represent client in court if a creditor decides to sue.

 

While a normal person can actually do the above-mentioned tasks, it does not mean that they can be carried out without much difficulty. An experienced credit attorney has already attained a level of expertise by his continuous dealing with credit bureaus and understanding consumer rights.

A debt attorney can then use that expertise on the debtor’s behalf, resulting to convenience and better results. Moreover, a credit lawyer is a strong alternative for credit repair services that are most likely are scams. One must bear in mind that you may still be held liable for taking any illegal actions, even if they were done on your behalf by a shady credit company.

What Does a Credit Lawyer Do? was last modified: July 27th, 2017 by Kevin Fallon McCarthy
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Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.
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