Should I Go Bankrupt?

If you qualify for a fresh start bankruptcy, our advice is to bankrupt assuming your debts are significant. Because one can only go bankrupt once every ten years, we don’t recommend going bankrupt (absent extraordinary circumstances) with less than $35,000 in debt because BK costs 2-3,000 and workout costs $21,000. The right to bankrupt down the road is worth more than $18,000.

Why Do You Charge Fees?

We do all of our work based on a flat fee as a percentage of the debt so to eliminate arguments and surprises. Our fees are reasonable. We are not aware of any law firm in the state focused as we are on assisting folks with high unsecured debt outside bankruptcy. Some firms charge by the hour instead of a flat fee, but we are not aware of anyone who offers a better quality of service for less money.

Debt Relief FAQ

Looking for answers about debt relief? Give us a call or review the answers to our most common questions.

How much does it cost?
Our firm negotiates large reductions in our clients’ unsecured debts outside of bankruptcy. We offer our services on a flat fee basis calculated as a percentage of debt. We typically, work a plan to settle our clients’ debts for 55-60 cents on the dollar. Typical debts we negotiate: credit card debt, private student loans, personal loans, car loan deficiencies post-repossession, 2nd mortgages subject to deficiency, judgments, medical debt, trade debt If our clients are sued, we represent them in the lawsuit thru trial for $500 plus the cost of filing the answer.
Why shouldn’t I just do this myself?
We can get a better result with a higher likelihood of success. There are a number of reasons why we can typically obtain a better result than a debtor can obtain on their own behalf. First, as lawyers, a creditor knows that there is no quick way to bully us into giving in for an unreasonable number. If they sue an unrepresented party, it gets very tough for the debtor to handle it themselves. Second, because of experience with the creditors and our ongoing settlement negotiations with them on behalf of other clients, we have a lot more information on what the best settlement looks like. Third, the emotional and time investment required by someone working on their own behalf is huge. For us, it’s what we do every day. We can do it effectively and efficiently. The other thing to keep in mind is that the creditor is using professional debt collectors to collect money from the debtor. Before doing it themselves, debtors need to know how to handle situations they don’t know how to handle: should they provide financial information, how should they document hardship, should they disclose employment information, etc. I often suggest (with a wry smile) that I guess I could cut my own hair, drill my own teeth, prepare my own taxes, but I don’t. I use a professional because I do not possess the necessary skills to get the results that I need to have for peace of mind.
Can they sue me?
Yes. Less than 10% of our current accounts in workout are in litigation. Whether you are sued depends on how fast we can put together settlement monies, how much you owe, which bank is owed, and how long it’s been since your last payment to the bank. In the event you are sued, we will represent you in the suit for $500 plus the cost of filing an answer on your behalf. We represent you all the way thru trial, if necessary. We have certainly not found that being represented by counsel makes suit more likely. Having a lawyer when dealing with a creditor doesn’t hurt.
Can I just send a check each month instead of ACH from my account?
Our fees and processes are structured based on creating a savings account that belongs to you, electronically removing the amount monthly from your checking account, and depositing it into your savings account. We handle hundreds of accounts and customers. We do not have a procedure in place to account for, accept and deposit monthly payments by check.
Are your fees negotiable?
You are hiring us to act as a professional and skilled negotiator who will obtain favorable settlements from your creditors. If you could negotiate a reduced fee from us, it would make no sense for you to hire us to negotiate for you. Our fees are as stated for typical client representations, but we can be creative when the clients’ circumstances are unusual.
What about debt consolidation?
Debt consolidation is simply a process in which you toss all of your debts into one bucket and make one monthly payment to a processor who splits the money among your creditors. In debt consolidation, your creditors cancel all of your credit cards and report negatively to credit bureaus. You pay back the full amount your creditors claim due plus interest. How does debt consolidation compare? It costs significantly more money in almost all cases, it takes as long or longer than debt settlement, and has no better effect on your credit score. We like to call it the bank affiliate program as the bank gets 100% of the amount they claim due.
Who is your biggest competitor?
Denial is our biggest competitor. If a potential client is burdened with debt and bankruptcy is not an option, we rarely if ever see our clients choose another lawyer to work on their behalf. Most often, they continue to make the minimum payments as best they can, string out their creditors, and hope for a better tomorrow. Unfortunately, hope is NOT a strategy.
Can I keep some of my credit cards?
If you engage us, you should move forward with the understanding that you will not be able to keep other personal credit cards. Having said that, our clients tell us that American Express operates differently and that if you default on your V/MC, but don’t default on your Amex, Amex will not pull the cards assuming no future defaults. Cards in the name of a separate business with a separate EIN can often be held out without being cancelled. Our advice is always to get it over with and put all of the cards in workout so that you can be debt-free more quickly and less expensively. Credit scores are as much a function of outstanding debt as they are of on-time payment history.
How do you get the creditors to take less money (How do you do it … so I can do it without you?)
We are a law firm. We use the factual and legal defenses available to convince the creditors that it is in their best interest to settle for less. We also use the intelligence gained from working on settlements every day.
What if the creditor doesn't work with you?
It is a very rare circumstance that a creditor will not eventually work with us to resolve an outstanding debt. Even if they decide “not to work with us”, they have no quick way to get money from you. With us as your lawyer, there will still need to be a lawsuit, extensive discovery, a trial that they need to win, and then they will have to try to collect the money. Most creditors realize that the best way to cut their losses is to negotiate a payment.
Will you get better than 40 cents on the dollar?
We often strike a deal that involves paying less than 40 cents on the dollar. When we do, the money saved is money that you get to keep.
What is your motivation to get me better than 40 cents on the dollar?
Professional pride and the opportunity to serve our clients’ needs motivate us on a daily basis.
What if I get sued?
Less than 10% of our current accounts in workout are in litigation. Whether you are sued depends on how fast we can put together settlement monies, how much you owe, which bank is owed, and how long it’s been since your last payment to the bank. In the event you are sued, we will represent you in the suit for $500 plus the cost of filing an answer on your behalf. We represent you all the way thru trial, if necessary.
Can I tell the creditors to contact you?
Each time you receive a call, tell the person calling politely, but firmly: “This is not a good time for me to talk to you. I am now represented by a law firm. You can reach them at XXXXXXXXXXXXXX. Please contact them from now on. Do NOT contact me at home or at my work.” Unless they say, thank you and hang up, say this: “As I told you, this is not a good time for me to talk to you. Please contact my lawyer. Have a good day.” Then hang up. Do not wait for them to respond. If they call again, handle it exactly the same way. Better yet, don’t take their calls, don’t return their voicemails, and hang up on yourself as soon as you know it’s a creditor calling you.
Do you do bankruptcy?
We do not offer any kind of bankruptcy services, but we can recommend lawyers who we are confident can help folks who need to pursue bankruptcy.
How long have you been doing this?
Kevin McCarthy has been a practicing lawyer since 1986. He has worked in all phases of workout during his legal career. He decided to focus the firm exclusively on workout matters in 2010. Along with Mr. McCarthy, the firm has three full-time lawyers in Arizona and California who together have more than 40 years of legal experience.
What if I cannot make the monthly payment?
It depends on the reasons underlying the non-payment. If your financial circumstances have changed (ie. lost your job or a significant source of income), we may need to re-evaluate your options including bankruptcy. If it’s an isolated incident, we try to work with clients to get them back on plan.
Can the creditor call my work?
Yes, the creditor can contact you at work subject to the restrictions under the FDCPA. Pursuant to the FDCPA, collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there. Debt collectors do not include employees of the creditors themselves.
How many points will defaulting on my cards bring down my credit?
In general, you should anticipate that your credit score will drop 100-150 points post-default. By law, a credit card company is required to “charge off” (remove your debt as an asset on their balance sheet) after six missed payments. Once it is charged off, the credit card company can no longer report you as late. Non-payment negatively impacts your credit score for 12 months after the last negative. Accordingly, 18 months after the first missed payment, the missed payments will no longer negatively impact your score. That doesn’t mean your score goes up. For it to go up, the underlying debts must be paid or settled. Once that happens, you can positively impact your score with payments on a mortgage, car, gas card, small trade lines, debit cards that report to credit bureaus, and similar accounts.

The McCarthy Law Difference

Better settlements. Less Expensive. We won't abandon you if you have a lawsuit.

McCarthy Law PLC has expanded its footprint to have more than 90 locations nationwide. We believe that finances are a very personal matter and should be discussed in person with a qualified debt attorney.

You can set up a free consultation in an office most convenient to you, by contacting us now and be immediately connected to a qualified McCarthy Law representative who will schedule your free consultation and financial review, with a McCarthy Law PLC attorney closest to you.

The team at McCarthy Law PLC have met many people who are in seemingly insurmountable debt. We help our clients by offering a free debt consultation. 

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Credit Repair FAQ’S

Looking for answers about Credit Repair? Give us a call or review the answers to our most common questions.

How long have you been doing this?

Kevin McCarthy has been a practicing lawyer since 1986. He has worked in all phases of workout during his legal career. He decided to focus the firm exclusively on workout matters in 2010. Along with Mr. McCarthy, the firm has three full-time lawyers in Arizona and California who together have more than 40 years of legal experience.

What is the Fair Credit Reporting Act?

The FCRA is a federal law that regulates the use of consumer credit information. The purpose of the law is to protect consumers against inaccurate information on their credit reports.

How do I know if my credit report is bad?

The FCRA requires you to monitor your own credit. When you notice that anything is incorrect on your credit report, you must send a dispute letter to the credit-reporting agency before taking and legal action against your creditor or the credit-reporting bureau. We send this notice on our clients behalf.

Can I sue my creditors?

Creditors are required to conduct a reasonable investigation into your dispute. If they do not, you may sue them.

What’s the catch? Why do you offer representation for free?

Under the Fair Credit Reporting Act law, the defendants have to pay our fees and costs. So this litigation won’t cost you anything. Our representation is absolutely FREE to you.

What does McCarthy Law need to get going?

If you believe that items are incorrect on your credit report, give us a call and let’s talk. If you aren’t sure if your credit report is correct, many websites allow you to pull your credit report at no charge. If you need help reading this report to understand what it means, we can help.

How can I fix something that is not reporting correctly?

You would need to dispute the error with the credit reporting agencies.  You can either dispute the error by mail, online or you can let McCarthy Law dispute the error for you for free.  As a law firm we know exactly how to dispute the error so that you get it fixed immediately.

I paid the bill but the creditor is still reporting a balance.

Let McCarthy Law dispute the error for you.

How long does an inquiry remain on my report?

Legitimate inquiries remain on your credit report for two years.  If you did not authorize the inquiry that would be something that you should dispute.

How long does a delinquent account report?

Delinquent accounts report for 7 years from the date of first delinquency.

What do I need to dispute an error?

o dispute an error, you need proof that the error is a valid error.  Contact McCarthy Law to find out more.

Student Loan FAQ’S

Looking for answers about Student Loans? Give us a call or review the answers to our most common questions.

How much does it cost?
Our firm negotiates large reductions in our clients’ unsecured debts outside of bankruptcy. We offer our services on a flat fee basis calculated as a percentage of debt. We typically, work a plan to settle our clients’ debts for 55-60 cents on the dollar. Typical debts we negotiate: credit card debt, private student loans, personal loans, car loan deficiencies post-repossession, 2nd mortgages subject to deficiency, judgments, medical debt, trade debt If our clients are sued, we represent them in the lawsuit thru trial for $500 plus the cost of filing the answer.
Can they sue me?

Yes. Less than 10% of our current accounts in workout are in litigation. Whether you are sued depends on how fast we can put together settlement monies, how much you owe, which bank is owed, and how long it’s been since your last payment to the bank. In the event you are sued, we will represent you in the suit for $500 plus the cost of filing an answer on your behalf. We represent you all the way thru trial, if necessary. We have certainly not found that being represented by counsel makes suit more likely. Having a lawyer when dealing with a creditor doesn’t hurt

What if the creditor doesn't work with you?

It is a very rare circumstance that a creditor will not eventually work with us to resolve an outstanding debt. Even if they decide “not to work with us”, they have no quick way to get money from you. With us as your lawyer, there will still need to be a lawsuit, extensive discovery, a trial that they need to win, and then they will have to try to collect the money. Most creditors realize that the best way to cut their losses is to negotiate a payment. 

What if I get sued?

Less than 10% of our current accounts in workout are in litigation. Whether you are sued depends on how fast we can put together settlement monies, how much you owe, which bank is owed, and how long it’s been since your last payment to the bank. In the event you are sued, we will represent you in the suit for $500 plus the cost of filing an answer on your behalf. We represent you all the way thru trial, if necessary. 

Can I tell the creditors to contact you?

Each time you receive a call, tell the person calling politely, but firmly: “This is not a good time for me to talk to you. I am now represented by a law firm. You can reach them at XXXXXXXXXXXXXX. Please contact them from now on. Do NOT contact me at home or at my work.” Unless they say, thank you and hang up, say this: “As I told you, this is not a good time for me to talk to you. Please contact my lawyer. Have a good day.” Then hang up. Do not wait for them to respond. If they call again, handle it exactly the same way. Better yet, don’t take their calls, don’t return their voicemails, and hang up on yourself as soon as you know it’s a creditor calling you.

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