Wites & Kapetan P.A., a Florida-based law firm practicing in class actions, business disputes, personal injuries and consumer debt, shares important information for consumers considering debt settlement services, including tips to avoid scams.
According to the law firm, the Federal Trade Commission passed a law in 2010 that amended the Telesales Rule, effectively banning advance fees on debt reduction services. Consumers must be aware going in that debt settlement companies are not allowed to charge fees in advance for settling debt until they have successfully settled at least one credit account. The law firm points out there are still many companies that fail to comply with this law, often because they know they won't actually succeed and want to be paid anyway.
Wites & Kapetan also points out that many consumers fail to understand that they may be sued by their creditors after signing up for debt settlement. Consumers who sign up for a debt reduction plan are typically instructed to stop paying bills to build up a lump sum of money for a settlement offer while also gaining leverage. Unfortunately, this gives creditors the right to sue in civil court for defaulting on the loan. Non-attorney debt settlement companies cannot represent their clients in court or offer legal advice, and most will drop any client who is facing a lawsuit.
Wites & Kapetan also urges consumers to first make sure their debt isn't already past the statute of limitations in their state before ever attempting to settle. In most states, there are laws stating creditors have a specific amount of time to collect the debt or lose their right to do so. Still, creditors will not turn down the opportunity to "settle" a debt they know is past the statute.
Finally, the law firm reminds consumers that debt settlement may not even be in their best interest. Bankruptcy may be a better option, depending on the type of debts of the balance, as individuals facing a massive amount of debt that won't be made more affordable with a settlement may only be digging themselves into more trouble by signing up for debt reduction services.
The firm specializes in negotiating pre-litigation resolutions of consumer debt disputes and has successfully obtained recoveries for and defended consumers in credit card disputes and consumer debts, including representing clients in court if they have been sued by a creditor. Wites & Kapetan also provides bankruptcy counseling and filing for consumers best served by filing for bankruptcy protection.
Wites & Kapetan P.A. may be contacted at Wklawyers.com or by calling 1-866-277-8631.
Wites & Kapetan, P.A., 4400 North Federal Highway, Lighthouse Point, FL 33064, (954-570-8989)