As an attorney I’ve reviewed many contracts and have worked with many businesses that have made the mistake of working with debt settlement companies that ask you to deposit money in an escrow account or trust account.
What makes matters worse, is the contracts that these debt settlement companies have with their clients. They’re confusing, illusory, and just plain nonsense.
Here are a few examples of why these debt settlement company contracts are BAD:
- If it takes you 10 times to review the contract they send you and you’re still not 1000% certain what every single provision means, then it’s a BAD contract.
- If the contract is not clear about what happens to your money if you miss one of the payments, then it’s a BAD contract.
- If the contract does not give you an unconditional right to reject any settlement offer, then it’s a BAD contract. Note: lawyers cannot force you to take settlements. That’s your right. Debt settlement advisors/companies include confusing provisions in their agreement that essentially states they will have a right to take your money if you don’t accept the settlement offers they procure on your behalf.
- If the contract is not clear that settlement funds will be separated from payments due to the debt settlement advisor, then it is a BAD contract. Note: law firms cannot commingle your settlement funds and funds paid to the law firm. Debt settlement companies/advisors don’t have that legal obligation.
There are a few good debt settlement companies out there. I happen to work with some of the best: ethical, professional, and they only charge their clients a flat fee per case for non-lawyer services.
