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Federal Debt Settlement Laws
Protect Yourself While Settling Your Debts.
Many debt companies don’t have your best interests in mind. LHA ensures federal debt settlement laws are followed and your rights respected.
Call LHA: 888-726-3181
What Are Federal Debt Settlement Laws?
The only federal statute that directly regulates the debt settlement industry is the Telemarketing Sales Rules, which are rules created by the FTC under the Telephone Consumer Protection Act (TCPA). Almost every state has a statute governing a debt settlement companies’ conduct, but the Telemarketing Sales Rules are the only federal mandates to debt settlement companies.
Who Enforces Federal Debt Settlement Laws?
The Federal Trade Commission (FTC) is the primary government agency that enforces debt settlement.
However, if a debt settlement company violates federal law, you may also be able to sue them in state or federal court. Thus, state and federal courts may be tasked with interpreting federal law and making orders to force debt companies to comply.
Your best option is to work with an experienced debt lawyer licensed to practice in Ohio to assess your options and determine if you’re protected by federal law.
Not Just Any Debt Attorney
Attorney Jeremiah E. Heck is a founding partner of LHA. As a leader in consumer law, he is known for sound financial guidance and fighting large debt companies.
What is the Telemarketing Sales Rule
The FTC also governs the Telemarketing Sales Rule (TSR), which handles how debt settlement companies operate.
One of the most important parts of the TSR includes a ban on advance fees. The TSR specifies that fees may not be collected until:
- The debt relief service successfully renegotiates, settles, reduces, or otherwise changes the terms of at least one of the consumer’s debts;
- There is a written settlement agreement, debt management plan, or other agreement between the consumer and the creditor, and the consumer has agreed to it; and
- The consumer has made at least one payment to the creditor due to the agreement negotiated by the debt relief provider.
Unfortunately, very few companies comply with the ban on advance fees. There is an exemption in the TSR related to meeting the client face-to-face. Many companies send an agent to perform an in-person “signing” with the consumer to continue charging advance fees.
If a debt settlement company violates the TSR, you may have a right to sue them. However, you must have at least $50,000 in actual damages, which is rare in most situations. As a result, it’s important to know state consumer laws which often give great weight to a violation of a federal statute or FTC rule.
Why Use a Lawyer
Most debt companies and collectors are interested in profits, not what’s best for you. An attorney familiar with federal debt settlement laws can help you make the best decision about what to do in your specific case. Attorneys are also committed to offering you the best debt relief option rather than what benefits the company and, if licensed in Ohio, can protect you.
Protect Your Federal Rights
Federal debt laws give you rights throughout the settlement process. Collection companies are only allowed to take specific actions when obtaining money from you. If they violate any of your rights, a debt lawyer can stand by your side to hold them accountable.
Negotiate the Best Result
In addition to ensuring your rights are protected, a debt lawyer can help you negotiate the best settlement agreement possible. Sometimes, your attorney may even suggest another option aside from debt settlement.
Many debt settlement companies get kickbacks from collection agencies, so they are not always trying to get you the best deal possible. An attorney will work to settle your debts for as low as possible.
Representation Against Deceptive Companies
If your federal rights are violated, you may have a valid lawsuit in state or federal court. A lawyer will guide you through the legal process and handle the stressful parts for you.
Develop a Financial Plan
Debt settlement may be one option for you, but it is not the only option to get rid of debt. A lawyer familiar with all aspects of consumer law can help you determine the best financial plan going forward.