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First lets recognize what debt settlement is. Debt settlement is a process of defaulting on unsecured credit card debts to then later on negotiate a settlement to pay back the debt balance owed at a much smaller amount. This procedure can save a debtor close to 50% of the debt they must repay. In addition they can expect to become completely free of unsecured debts within two to three years. Now the debt settlement process can be done two ways, either retain a debt settlement company or a debt reduction law office to enroll you into a debt settlement program. This writing will touch a few pressing differences between the law firm vs the company.

Like most things in life debt settlement has it's positives and negatives. The good thing is the terrific savings of money and time. The negative things are falling past due on the bills, collection activity and the minimal chance of being sued. A debt settlement law firm has more beneficial protections to offer than the standard debt settlement company.

Lets first talk about the chance of getting sued. To begin I want to let you know that it is not common practice for the collectors to sue, but there is a chance. Over ninety percent of debtors who fall into past due status will never end up receiving a summons to go to a courtroom. However in the case that you get sued you want to ensure yourself that the company you hire can still help you out. With a debt settlement company if one of their customers gets sued there is nothing at all they can do for them. It is UPL (unlicensed practice of law) for these companies to either advise or contact the creditor attempting to sue their client. Now if that same debtor was the client of a law firm helping them to settle their debts the law is different. A law firm by law can still call and negotiate a settlement to keep the client out of court. This is a much easier method for the collector to get money as opposed to actually bringing the debtor to court which cost money and time for them.

The next topic of debate involving settlement companies and law firms is how the collection activity is handled. Part of the debt settlement course is the client must go into default in order for the creditor to be in position to want to settle an account. Now these collectors do not just roll over and play dead, you will for sure be getting collection calls to some extent. A debt settlement company can't do a thing about the collectors attempting to collect the debt. But a law firm can issue a statement of attorney retention to make the collectors by law to deal only with the law firm and not the client in in an attempt to collect the debt.

One more subject to consider is that law firms have to answer to a higher authority in order to continue practicing law, the Bar Association. This gives the client additional peace of mind that there case will be handled properly throughout the debt settlement procedure. A debt settlement company must answer to no one.