To begin we must understand the debt settlement process. Debt settlement is a process of falling past due on unsecured credit card bills to then later on work out a settlement to pay back the original balance at a much lower amount. This avenue can save a U.S citizen in the ballpark of 50% of the debt they owed. Also they can look ahead to becoming free of debts within two years. Now the debt settlement process can be done two ways, either retain a debt settlement company or a debt settlement law office to enroll you into a debt settlement program. This brief article will delve into the differences between the two.

Like most things in life credit card debt settlement has it’s pros and cons. The pros being the tremendous savings of money and time. The negative things are defaulting on the bills, collection activity and the small chance of being sued. A law firm practicing debt settlement has better protections to offer than the normal debt settlement company.

Lets first understand the possibility of being sued. To begin I want to let everyone understand that it is not commonplace for the collectors to sue, but it is a possibility. Over 90% of people who fall into default will never find themselves getting summonsed to go to a courtroom. But you want to make sure that if it does happen to you that you are not left out to dry. With a debt settlement company if one of their customers gets sued there is not a thing at all they can do for them. It is UPL (unauthorized practice of law) for these companies to either advise or contact the creditor attempting to sue their client. Now if that same consumer was the client of a debt relief law firm helping them to settle their bills the legislation is different. A law firm by law can still contact and work out a settlement to keep the client out of court. This is a much more liked avenue for the collector to get money in contrast to actually having to go to court.

The next topic of debate between settlement companies and law firms is how the collection calls are handled. Part of the debt settlement procedure is the consumer must fall behind in order for the creditor to be in position to want to settle an account. Now these creditors do not just roll over and play dead, you will assuredly be getting collection calls to some degree. A debt settlement company can’t do a thing about the collectors calling. But a law firm can issue an attorney retention letter to force the collectors by law to have contact only with the law firm and not the client in in an attempt to collect the debt.

One more issue to consider is that law firms must answer to a greater authority in order to stay in business, the State Bar Association. This gives the client a greater peace of mind that there case will be handled appropriately throughout the debt settlement process. A debt settlement company must answer to no one.

Steve Bis is a credit card debt analyst with the US Consumer Advocate, which practices in credit card debt reduction.