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You Can Negotiate With A Collection Attorney

Created: On January 28, 2009 @ 5:08 pm In

If you’ve fallen behind on making your credit card payments and are exploring debt settlement, you may find yourself being forced to work with various collection agencies. While most consumers can deal with the persistent phone calls and letters by many collection agencies, some become terrified when contacted by a collection attorney. Panic begins to set in as thoughts of lawsuits and wage garnishment float through their mind.

Most collection attorneys operate in the same manner as traditional collection agencies. The primary difference is the collection agency is owned and operated by an attorney or law firm. The phone calls you receive will almost never be by an actual attorney and will instead be by a collection agent hired by the attorney or law firm to make outbound calls like any other collection agency.

While the collection process may be the same, the strategies used to collect money will be different when you encounter a collection attorney. Communication you receive will be on attorney letterhead and threats regarding possible legal action are common. For those two reasons, collection attorneys can be highly effective in collecting on old debts.

Will they actually sue you?

The most important thing you can do when you first encounter a collection attorney that as been retained by one of your creditors is to determine the state in which the collection attorney is licensed to practice law. If the attorney is not licensed in your state, the original creditor most likely did not hire the collection attorney to pursue legal options. Otherwise, they would have hired an attorney located and licensed in your state of residence.

In most cases you will find the collection attorney is not licensed to practice law in your state and is simply no different than any other collection agency that may be trying to collect on a debt.

What if they are licensed in my state?

In the remote chance the collection attorney that does contact you practices law in your state and they send a notice that the original creditor has authorized them to explore legal options, there is a greater likelihood of a lawsuit. Like any collection agency, however, the attorney’s goal is to collect as much of the debt as possible with as little cost and effort as possible.

With that said, there if debt settlement was your goal, that is still an option.  It is in your best interest to contact the attorney and explain your financial situation and willingness to settle your debts. Since the attorney does have the ability to sue, you’ll find that you have less leverage than if you were negotiating with a traditional collection agency, however, settlements of 50-70% of the outstanding debt are not uncommon.

If you do not have the funds available to settle the account now, you may be able to convince the collection attorney to take monthly payments for the time being in exchange for holding off on any legal action.

About the Author:
Chris Rocks is the Regional Director of the [1] National Credit Federation (NCF), a consumer advocacy group that assists small business owners and consumers overcome debt and credit challenges. He can be contacted by visiting his personal site, [2] GoodCreditLiving.com.

Article printed from DebtHelp.com Blog: http://www.debthelp.com/blog

URL to article: http://www.debthelp.com/blog/2009/01/28/you-can-negotiate-with-a-collection-attorney/

URLs in this post:
[1] National Credit Federation: http://www.nationalcreditlawyers.com/
[2] GoodCreditLiving.com: http://www.goodcreditliving.com/