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Advanced Fee Debt Settlement
Only Pay What’s Fair for Debt Relief
Many debt settlement companies charge excessive or even illegal fees. LHA is here to help you determine if you’ve paid more than you should have.
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What Is an Advance Fee Debt Settlement?
Advance fee debt settlement companies take fees upfront for their respective services. The company will collect information about any debts you want to include in their plan, then negotiate settlements with the collection agencies in an attempt to resolve what you owe.
How Much Do They Charge?
A typical advance fee debt company will base its fees on the amount of debt you want to settle. Fees typically range between 15% and 30% of the overall amount you want to put on their program.
For example, if you have $20,000 in debt, the company might charge $6,000 in fees. Please be aware that this fee is usually not the only debt settlement fee the company will charge.
Are Advance Fees Legal?
According to Federal Trade Commission rules, debt relief companies may not charge fees before settling or reducing a consumer’s unsecured debts. The Telemarketing Sales Rule made this ban effective in 2010.
There are many problems with advance fees collected by debt settlement companies. They often leave the consumer in a worse position than when they sought assistance.
What If I’ve Already Paid An Advance Fee to a Debt Company?
If you were forced to pay an advance fee against federal laws, then you should file a complaint with the FTC at www.ftc.gov/ftc/complaint.htm. You can also contact an attorney who will review your situation and help you determine if your rights have been violated.
You can potentially recover the illegal fees the debt settlement company charged you as well as additional statutory compensation dictated by law.
Not Just Any Debt Attorney
As a founding partner of LHA, Jeremiah E. Heck is a leader in consumer law. He will help you determine if your rights have been violated and help you find relief.
Advance Fee Debt Settlement Process
There is a typical timeline of occurrences when dealing with an unscrupulous debt company. Many of these stages violate the rights of the consumer.
Signing a Contract & Paying Fees
A debt company will often call a consumer and coerce them into signing a contract that includes an advance fee and other fees for the first 12 months, which may be anticipated to last for years.
The debt company will likely want your first month’s fees upfront or in advance. Your monthly payments, or a substantial portion of your monthly payments, may be taken by the company for its fees rather than going into a trust account to save for settlement, as is required by law.
Lawsuits by Creditors
Debt companies often rope consumers into a 36 to 60-month program. During that time, many debtors are sued due to nonpayment. Since there is little money in their savings account, they have few options.
Refusal to Handle Lawsuits
When a consumer informs the debt company of the creditor lawsuit, they often point to a provision in its contract that expressly declined to represent a consumer in a court of law.
Finding an Ohio Debt Lawyer
The consumer is then forced to find a licensed Ohio attorney, to defend the debt or help them find legitimate relief, which may require bankruptcy (giving up all the fees paid to the debt company).
This process is common when people work with illegitimate debt companies. This can be avoided by working directly with an attorney who can present you with all of your options from the beginning.
Why Use an Attorney
If you talk to a licensed and experienced attorney from the start to address overwhelming debt, you can avoid unnecessary fees and unfair treatment.
Achieve Real Debt Relief
Most debt companies offer only limited options and are only interested in getting as much money in fees as possible. An attorney helps you achieve complete resolution and a clean financial slate.
Present All Your Options
Debt settlement is only one option. You may also be able to dispute your alleged debts, file bankruptcy, or pursue a lawsuit for collection violations. A consumer law attorney can handle whichever helps you the most.
Protect Your Rights
Several state and federal laws protect your rights as a consumer. An attorney will make sure the creditors and other debt companies respect your rights.