Should You Hire an Attorney for Debt Settlement?
6 MIN READ
Published April 06, 2023 | Updated January 27, 2025
Expert Verified
Written by Priyanka Trivedi
Edited by Wes Silver
Reviewed by Teresa Dodson
Turbo Takeaways
For many Americans, debt has become unmanageable with the rising cost of living.
Thankfully, there are several debt relief options available today to choose from to relieve the burden of overwhelming debt. Hiring a debt settlement attorney is one option.
Young borrowers are struggling the most with auto loans and credit card payments. During the third quarter of 2024, household debt rose to $17.94 trillion, with credit card balances reaching $1.17 trillion.
You may find it challenging to keep up with repayments, and sometimes your financial situation may seem bleak.
Debt settlement attorneys can help in such situations. But before you decide to hire one, here are a few things you should know.
What Does a Debt Settlement Attorney Do?
A debt settlement attorney helps you deal with creditors, lenders, and debt collectors. They can help you negotiate a debt settlement and provide strategies to protect you against unfair debt collection practices.
If you’re unemployed or facing other difficult financial situations and have a lot of credit card debt, payday loans, and unpaid medical bills, an experienced debt attorney can help you explore your options. Lawyers have in-depth knowledge of debt collection laws. They also defend clients who are sued by collectors.
An attorney can also walk you through all of your options if you are seeking debt relief so you can get a reprieve from unrelenting debt.
Debt Settlement Lawyer Vs. Debt Settlement Company
A debt settlement attorney can educate you on all the options available to you to pay off your debts. A lawyer can also defend you in court if you are sued by a lender.
They can provide you with advice on what to do if a lender violates the Fair Debt Collection Practices Act.
Over 40% of all FDCPA violations are harassment of the debtor through incessant phone calls. 14% of violations involve the use of abusive language. If you are on the other end of such harassment, your attorney can help you.
A debt settlement company can negotiate with your lenders on your behalf so you can settle your debt for less. These companies have skilled negotiators who are trained to deal with lenders and debt collectors so you can get the best possible results.
A debt settlement company may help you save up to 50% of your enrolled debt before fees, resulting in huge savings.
What To Expect When Working With a Debt Settlement Attorney
A debt settlement attorney can help you recover from unrelenting debt problems.
If your situation is so dire that you are filing for bankruptcy, you should set up a consultation with a bankruptcy lawyer as soon as possible.
An attorney will take the time to take a look at your situation and help you choose the best debt relief program to pay off the debt fast while ensuring that you are legally protected.
From debt collection lawsuits and debt negotiations to setting up payment plans, a debt relief attorney can provide a number of services. If you are pursuing a settlement, an attorney should also be able to reduce the amount you need to pay back to your creditors.
Hiring an attorney increases your chances of saving money and paying off your debts faster than handling debts on your own.
Pros and Cons of Hiring a Debt Settlement Attorney
| Pros | Cons |
|---|---|
| A debt settlement attorney can represent you in court if a lender sues you. | Settling your debts can lower your credit score, and a settlement will remain on your credit report for up to seven years. |
| They can help negotiate with creditors and debt collection agencies to reach a settlement. | With multiple cases and court appearances, lawyers may not always be able to give your case enough time. |
| They can help you understand consumer protection and debt collection laws. | Lawyers primarily focus on legal options, so they may not be able to help you with other options like debt management or debt consolidation. |
| Your personal information will remain confidential due to the attorney-client relationship. | Lawyer fees can be quite expensive. |
| Lawyers may be able to protect you against wage garnishment. | |
| You may be able to settle your debt for less than you owe and save money. |
How Much Does a Debt Settlement Attorney Cost?
Debt settlement lawyer fees vary based on the complexity of your case. There are several different fee structures based on which an attorney may decide what to charge.
Flat Fee Per Debt
Flat fees can range from $500 to $5,000 per debt, depending on the complexity of the negotiation.
Hourly Rate
Hourly fees can range from $150-$350. Fees depend on the types of debts, how many debts you have, and your state of residence. In some cases, you may have to pay a retainer.
Percentage of Savings
If an attorney is negotiating a debt settlement for you, they may also charge a percentage of the amount you save through the settlement.
Percentage of Debt
Some law firms may charge you a percentage of the total debt you owe. In many instances, your attorney may charge you higher fees if:
- You are filing for bankruptcy.
- You want to negotiate the terms of a mortgage, car loan, or other secured debts.
- You want to counterclaim a collection lawsuit.
- You want to defend a judgment against you.
Why Hire a Debt Settlement Attorney?
If you have a large amount of debt and are struggling to pay it off, you may want to get in touch with a debt settlement attorney.
An attorney can help you minimize your legal risks and offer you a number of solutions to pay off your debts, such as debt consolidation, payment plan, or debt settlement.
Here are a few more reasons why you should work with a lawyer:
- An attorney knows consumer protection and debt collection laws.
- They can offer you legal advice.
- Debt settlement attorneys can defend you if you are sued by creditors.
- The attorney-client relationship ensures that your confidential information will not be disclosed to anyone else.
- They can negotiate on your behalf to seek a lower interest rate or reduce the amount of debt you owe.
- They can defend you against questionable or illegal collection practices.
- Bankruptcy attorneys can help you with alternatives like bankruptcy.
If you find yourself in a situation where you are unable to pay your debts, have missed payments, have bad credit, or are getting unrelenting collection calls, it may be wise to consult with an attorney on the best course of action.
Hire a Debt Settlement Attorney Today
A skilled debt settlement attorney can analyze your situation and provide you with practical legal advice. They can minimize your legal risks and help you pay off your debts through their knowledge of debt collection laws, negotiation skills, and practical experience.
Whether you are looking for debt settlement, consolidation, or any other type of debt relief, TurboDebt can help you determine your best option.
Our consultation and planning services can help you find a program that fits your needs perfectly. Connect with our experienced debt relief professionals for a free consultation today.
Read our TurboDebt reviews to learn more about how our services have helped thousands of clients pay off their debts.
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