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Debt negotiation w/ attorney?


Weezie
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I finally caved and called a BK attorney today. He stated that we would not qualify for Ch 7, and in our situation he would not recommend Ch13. However, he did say that it seems like our best option is to go through debt negotiation with him. Paying his office so much per month to be deposited into an escrow acct. to pay cc one by one when they are finally ready to settle. Claims most will settle for around 50%. If we are sued he will go to court for us. Will send C&D letters to all cc, sounds like he'll handle everything. And we'll be out of debt in only 3 years. With us saving possibly almost 30K.

Is this as too good to be true as it sounds? He explained our credit would take a hit, as some things could potentially take 30 months or so to get settled. We would pay him roughly $700 less per month than we are paying to our unsecured debts.

Are there vital questions I need to ask him? I've already asked what seems like 1000. I realize he's a BK attorney but I'm very leery about handing my finances to someone. Not that we haven't botched things significantly on our own. Or if we go through with this, should everything be spelled out in the contract we sign? What are the essential facts or questions I need to know?

Is this a good way to go? He's given me a figure for his fees($499), they are all inclusive. Aside from going to court for us, if sued. Then there is an additional $200 flat fee for work involved with a lawsuit.

Any advice, or points to bring up to him would be greatly appreciated, as I'm in way over my head now.

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Update from yesterday. As most will suggest, I have contacted two additional BK attorneys. Both of them said (very emphatically) that NO they do not handle "debt negotiation" and strongly suggest against it. That there have been too many bad outcomes from such a situation. I am even more confused than ever. HELP please. What to do?

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I'm sorry no one else has responded, but I think you know the answer to your questions. Run away from the "debt fixer". He won't make it better.

You've done the right thing by asking several BK attornies. Pick one that you can work with, and get the paper work under way. There is no easy answer...and the guy that said he'll take your money, handle everything, and make it go away is lying about everything after the "he'll take your money" part.

The bottom line is that your credit will be ruined...either by the "debt fixer" or by the BK. Same result, same lenght of time, same hassles. The difference is the BK ends it once and for all, and it doesn't cost you nearly as much.

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Thanks for your reply. The newest wrench into the works is that I've found out my husband makes about $8000 too much for us to file a Ch7. So that's out. And after talking to the attornies this AM, I'm not exactly sure that a Ch13 is the best idea, either. From what I was told they're not too flexible when financial emergencies pop up. Having three kids means there are always financial emergencies too. And having to include secured debts like the house and car ( that have NEVER been late and we plan to keep both) into the repayment plan just somehow seems scary. Who am I kidding, everything about this whole thing is scary.

I'm tired of trying to find a way out of this mess. I'll admit, I'm tempted to go with the debt neg. My reservations are that what if the cc won't settle and just sue? He will act as our attorney, but there could still be a lien in our home. I know our credit will be trashed, he made no promises in coming out with it in good shape.

One last question... Would the fact that he's been doing this since'95 and a member of the BBB with no complaints be enough to make us less scared to go this route?

Still no closer to a decision. Jokingly I told my husband to take another lower paying job for the next few months to get the income down. Who'd have thought over 80K wouldn't be enough to get the bills paid? But when you're used to having over 120K to pay the bills...

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I know several BK lawyers and they dont do this either.. in fact there are companies that do and I know a wonderful LEGIT one that does not have a ton of fees, a great rep and they can negotiate on your behalf, I was with them for three years.. they couldn't have been more professional or better. They are a non-profit

YOU dont hand them money though..they negotiate the amounts with the creditors.. get an okay through you.. then when your "monthly bill is determined they give you a set amount for you to send them , then it goes to your creditors.. which they send you out a statement (and you can also see it on their statements as well) and online.. they really helped me out alot three years ago.. if you want more info and a # PM me and I will be glad to pass them along.. they are one of the few I actually trust

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when we were refinancing our house, Several mortgage brokers stated that they could get us a mortgage with our score as long as there were no consumer credit counseling companies (debt nego."s) on the reports. Apparently, they really screw up you credut score.

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I know several BK lawyers and they dont do this either.. in fact there are companies that do and I know a wonderful LEGIT one that does not have a ton of fees, a great rep and they can negotiate on your behalf, I was with them for three years.. they couldn't have been more professional or better. They are a non-profit

YOU dont hand them money though..they negotiate the amounts with the creditors.. get an okay through you.. then when your "monthly bill is determined they give you a set amount for you to send them , then it goes to your creditors.. which they send you out a statement (and you can also see it on their statements as well) and online.. they really helped me out alot three years ago.. if you want more info and a # PM me and I will be glad to pass them along.. they are one of the few I actually trust

WHat you are referring to is a CCCS. IF you can afford a CCCS you do not need these people. NON-profit? These companies are directly funded by the creditors themselves. CCCS has a 90% drop out rate within the first year. In addition to that, CCCS stays on your credit report as a public record and is a huge red flag for lenders. No one will ever qualify you for a loan with a CCCS active on your reports.

in 2004, the IRS closed the doors of 12 CCCS companies. in 2005, 41 were shut down again by the IRS> The IRS included in their statement "the CCCS, non profit debt management companies were investigated for the abuse of their 501-3c NON-PROFIT Tax Exemption. We found that these companies were nothing short of collection agencies disguised as "community service organizations diue to their Non-Profit status. CCCS is also directly funded by the creditors themselves through the Fair Share agreement".

DO not work with a CCCS. If you are considering Debt Settlement contact The U.S. Organization for Bankruptcy Alternatives www.USOBA.org and ask for a referral. Start there.

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I talked to the state bar association, no complaints or disciplinary actions to report against this guy. I also just got off of the phone with a wonderful lady at the USOBA and she recommended that if I felt this man had been truthful and complete enough in answering my questions and didn't try to paint too rosy of a picture as to what our credit would look like afterwards, I should talk to him a bit further and possibly go this route. But if I still had reservations and unsatisfactory answers to the questions I ask, walk away. That there are enough legit agencies that can help this way.She said personally that she would choose someone like this if she were in the same situation. And she felt his fees were quite reasonable, if not a bit on the low side. And his being an attorney she felt was a plus with the possibility of a lawsuit. Apparently attorneys are held to a higher code of ethics and regulated more strictly than regular debt negotiators. With less improprieties than other agencies.

She also gave me the name of a company to contact for advice, as they are not allowed to recommend anyone specific for debt negotiation. This place will determine on a case by case basis what will work best for us. Whether it be Ch13, CCCS, debt settlement or just a strict budget and spending habit modification. And can advise me if this guy is offering something too good to be true.

This sounds like we'll be looking into this a bit further. She really alleviated alot of my fears. Thanks a bunch to sifxpert for suggesting I make the call.

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Ah jeez, www.USOBA.org whose "Web site developed by USOBA in partnership with Debt Alliance Services, LLC " sure seems to have sleeze written all over it. A google search on "Debt Alliance Services" turns up a half dozen sites that seem to be TV infomercial scripts and some interesting tidbids on who they owe money.

In my mind, USOBA is another "debt fixer" scam...another way for less than honest people to make money off others peoples misfortune. Again, I say, run away...

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  • 5 weeks later...

Just an update in case anyone is interested. As of yesterday, we are technically out of debt. Did not go through with the debt settlement attorney. Instead my very kind, and trusting parents took out a home equity loan for the amount we needed to pay off everything but the house and car. Our payments will drop from almost $1800 per month on unsecured debt down to $620. With double payments we'll be out of debt in about five years. And we won't have to feel uncomfortable about the way we did it.

Thanks to everyone for their advice. Having learned a valuable lesson, I hope to never need it again. Thanks, Weezie

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I looked at my report and score yesterday, just so I'd have an idea how much improvement there'll be from this. I was shocked that my Experian score was 649 and that no lates had ever been reported. I guess nothing got to the 30 day point after all. My goal is to some day beat my Dad's 801.

How long do you think I should wait before I check to make sure everything is reported as paid off? And that the accounts I closed are reported as such? We're keeping one each open just in case of emergencies. With my Mom in possession of those cards and judge of what's an emergency, we'll be in good shape before long.

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