Credit repair lawyers provide assistance to people who have incurred serious debt problems and need to find solutions to the bad credit rating incurred as a result of nonpayment of that indebtedness. These credit repair attorneys are well versed in consumer law so that every possible legal action is taken to repair the credit of a client. The client will be made aware of the rights provided under the federal Fair Debt Collection Practices Act (FDCPA), and the strict rules of conduct for debt collectors engaged by creditors under that Act. For instance, collection agencies are not allowed to call a debtor at work, before 8:00 a.m., or after 9:00 p.m. to collect a payment. What they can say to someone is limited to polite language. There can be no racial slurs, insults, or threats.
On the positive side, provided that the amount owed is legitimate, a debtor can try to negotiate with the collector for a reduction in the amount owed or a new payment arrangement. If the debt is not a legitimate one, the person being harassed should send a complaint to the creditor, and the collector should be told to cease calling. If further action is taken (such as a lawsuit), the "debtor" will engage credit repair attorneys to respond.
Persons with a bad report are sometimes the victims of events outside their control that cause them to get behind in payments. A job loss, illness or accident can create a serious loss of income. There is no dispute about the monies owed, but the funds are not there. This slow or non-pay situation will be reflected on the report until the matter is cleared up. Credit repair lawyers will talk to creditors to reduce the amount of debt by the reduction of interest and/or the principle in the interest of getting it paid off. Written proof of debt that the client can review will turn up any errors that may have taken place, so those can be erased from the record. Sometimes the reduction that results from these actions will be as much as 60% less than the original amounts owed.
One way the credit repair attorneys manage the debt of their client is to combine the debts so there is just one payment. That payment is made to the attorneys, who disburse payments to the creditors. Other times, the debtor simply pays the lesser amounts to the creditors himself. The end goal of getting the debtor out from under the burden of high payments is accomplished either way, and the only difference between the two is the amount of money the client ends up paying to the credit repair lawyers.
The least popular alternative that credit repair attorneys will propose is the filing of bankruptcy. If the situation is hopeless because the person owing the bills has been unable to get a job, or has ongoing health problems, there may be no other alternative. Filing under Chapter 7 of the bankruptcy laws will erase the debt, and under Chapter 13 a new schedule of payments and a reduction of indebtedness is the solution. The drawback of filing bankruptcy is, it stays on a person's credit report for ten years. It isn't impossible to get credit after that, but it is certainly difficult. Added to that are the legal fees incurred.
There are companies other than credit repair lawyers who claim to help a debtor clean up a bad report. Some of them claim to guarantee the erasure of a person's debt, and suggest creating a new identity to circumvent bill collectors. Companies that make such claims cannot be trusted. No one can make such a guarantee, and changing identities is illegal, and if someone goes along with a scheme like that, they are committing fraud. These companies will usually charge high fees for their services, and sometimes request a fee before they have done any work. This should be enough to make anyone run the other way.
The Federal Trade Commission suggests that self help may be the best way to accomplish repair. There is nothing magic about a credit repair lawyers calling creditors to negotiate a reduction in the amount owed, or in the interest charged. A debtor can do that as well. Also, the law allows a debtor to question any credit report entry, and request written proof. The reporting company makes note of the dispute in the persons report, and contacts the creditor. It may take a month or more for both sides to do the paper work. If the end result is proof the amount is not owed, that change must appear on the record. In the event an agreement is reached on the legitimacy of the claim, the debtor may then attempt to negotiate with the creditor for a realistic repayment plan. There was not any recorded negotiation, but the Bible tells of a creditor who seriously reduced a debt: "Then said he to another, And how much owest thou? And he said, An hundred measures of wheat. And he said unto him, Take thy bill, and write fourscore" (Luke 16:7)
Negative information will remain on a persons report for seven years. Bankruptcy will remain for ten. During that time, a strict budget should be followed, and no new debt incurred. There are free counselors that can help with this process so one is not paying credit repair attorneys along the way. The direction a person chooses to go depends largely on the amount of trust that exists in one organization or the other.
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