One thing I pride myself on is laying out all the options.
Everyone has a unique financial situation, and they owe it to themselves to consider all their options. Unfortunately one-size-fits-all advice is what some big personal finance authors and personalities push, which can be unhelpful at best and harmful at worst.
For example, with student loan debt there is a lot of unhelpful, if not damaging, advice. There are big names in personal finance who are scaring people away from Public Service Loan Forgiveness by providing inaccurate and misleading information on the topic. Their advice to borrowers is universal: “if you can’t afford your student loan payments, you need to make more and spend less.”
For the social worker making $35k a year with $135k in student loans, this advice simply makes no sense. They should consider all options for bringing their student loan balance down to zero. If they strategically pursue Public Service Loan Forgiveness, for example, their net worth could potentially see a swing of hundreds of thousands of dollars when they ultimately have their loans discharged tax-free.
Student loans are a unique sort of debt, though, so what about credit card and other common forms of debt? In some, if not many situations it makes sense to start a side hustle, take advantage of 0% balance transfer cards, refinancing debt to a lower interest rate, and other strategies for paying down debt.
This isn’t possible for everyone, though. For some, the amount of debt they have relative to their income, or the situation they’ve found themselves in (for example, if they’ve been sued for their debt), calls for taking further action beyond simply making more money and cutting expenses. In these situations it makes sense to talk to a debt lawyer.
I’ve seen mixed advice when it comes to working with a debt lawyer. Most in personal finance don’t even touch on the topic, and if they do they present it in a very negative light. I personally think there are situations where people would benefit from working with a debt lawyer, and I want to address the topic head-on by interviewing a debt lawyer.
Over the past few years I’ve gotten to know Leslie Tayne. She’s the author of the book Life & Debt and the founder of Tayne Law Group, P.C., one of the few in New York State concentrating solely in debt resolution and alternatives to filing bankruptcy. If you’ve read my book Student Loan Solution, you may recognize her name as I interviewed her in a section of the book focused on debt other than student loans (though she certainly addresses student loan debt as well within her practice).
When it comes to debt I’m always careful about how I approach the topic on the site. With that being said, I’ve personally talked to Leslie and know people who have worked with her. I think she’s a great person to shed light on working with a debt lawyer and what to expect.
Those considering working with a debt lawyer may have questions such as:
- When should I work with a debt lawyer, and when should I stick to a “traditional” approach to paying off debt?
- What does it cost to work with a debt lawyer?
- What does the process look like, and what can I expect?
We’ll go over all these questions, and more, in the interview. Ultimately each person needs to make up their own decision on how they approach their debt. My goal with this interview is to provide clarity on one option for dealing with debt. It won’t be the right option for every situation, but at least it gives a lens into what it looks like to work with a debt lawyer, and what to expect.
Final note – for those who are wondering, this is NOT sponsored content and we did not receive any compensation for this post!
How does someone know when they should work with a debt lawyer versus working on paying off their debt on their own? Said differently, when does it make sense to focus on cutting expenses and increasing income instead of working with a debt lawyer?
Leslie Tayne: There are a couple of situations when I would recommend going through a debt lawyer. First and foremost, if you’ve been sued for your debt, you should most definitely seek the help of a debt lawyer. A debt attorney will be able to understand the complexities of the legal process, spell out your rights, and help set you on the best path. Beyond that, any time where you feel confused on your debt, credit, or finances, it is advisable to seek out an attorney. At the very least, you can get all of your questions answered about what creditors can do to you under the law and what the impact will be on your credit, debt, and other financial considerations. My clients often tell me they learn a lot, not only about their current issues but about how to be better informed in the future as well. You may also find that you actually saved money and time since you’re going directly to a source that will evaluate your personal financial situation and make sure you are the priority. It’s not only about cutting expenses but also about finding a realistic way to get rid of the debt while minimizing the credit and legal financial impact.
If you think you can budget well, pay off your debts and do it on your own without needing to involve your creditors then you may be able to resolve your debts on your own. But once your credit or creditors are impacted by your financial situation, it is time to turn to professional help. You may be able to cut expenses or increase income on your own, but sometimes that feels overwhelming and can take a toll on the rest of your life. If that’s the case, it’s best to reach out for help. Understand that you’re not alone in this process and that there are legitimate resources for you to turn to. Settling debt on your own can also be very difficult and can result in a number of issues if not done correctly.
What are the sorts of things a debt lawyer can do to help someone with their debt?:
Leslie Tayne: Make sure that you receive the proper paperwork from your creditors. Ensure that the agreements made are appropriate for you and do not negatively impact you. Debt lawyers can minimize opportunities for creditors to take advantage of consumers and can help you be aware of nuances like the tax consequences and judgments.
A debt attorney can guide you through the legal process if you’ve been sued for debt. In addition, a debt attorney can work with creditors to settle your debt – or arrange for a payment for less than you owe, typically in a lump sum. While you can try to settle your debt on your own, debt attorneys generally have standing relationships with creditors and understand what creditors are looking for in settlements. As a result, they will generally be more successful in getting you a favorable settlement. An attorney also carries higher ethical considerations and more weight with the creditors. As a result, they can often cut the chase of circling around with creditors. An attorney can ascertain the legality of your creditors’ agreements with you.
Assuming you are able to, would you be willing to share examples of the types of things you’ve been able to negotiate for your clients?
Leslie Tayne: I’ve been able to negotiate everything from student loans, to credit cards, personal loans, mortgage debt, boat loans, store cards, etc.
A married couple came to us with over $220,000 in credit card debt. Their largest account was a $96,294 account with Chase, which we were able to settle for $35,000, a savings of 64%. We had another client come to us with a Target REDcard balance of $7,361, which we resolved for $2,600, a 65 percent savings. We can also settle private student loans. For example, one client came to us with more than $83,000 in student loans from SoFi. We were able to settle that for $41,000, more than 50% savings, in interest-free terms. These are just examples of success we’ve had with certain clients and can’t guarantee future outcomes, but these success stories illustrate the work we put in for our clients and the proven results we’ve had.
How much does it cost to work with you? Follow-up: When it comes to pricing, are there any red flags that could come up when someone reaches out to a debt lawyer?
Leslie Tayne: For my firm specifically, all phone consults are always free. The type of debt will determine on how we structure your program. Usually, we come up with a payment based on a combination of things like your budget, which creditors we’ll be working with, and the time frame, along with other factors. Having to pay fees upfront is definitely a red flag. Additionally, not knowing who the attorneys are or not having any direct contact with an attorney can be a red flag.
What kind of impact does working with a debt lawyer have on a credit score, and what, if any, negative marks go on someone’s credit report?
Leslie Tayne: That always depends on the individual – their debt and starting credit score. We don’t report to the credit agencies, so it’s not on the client’s credit report that we are working with them. Most clients tell us that they see improvements in the scores while still in the program. The creditor will report that the accounts are late, but once the accounts are resolved, the creditor will report the status to settled or settled for less than full balance.
What can someone expect when they interact with you and your staff, especially on their initial call? What is the general timeline a client can expect and what are the milestones along the way?
Leslie Tayne: When a client first calls in, they’ll speak to a human being right away. We don’t have a call center, and the staff works right in our office with our other departments. We don’t share or sell any information, so clients come right to the source of a very experienced staff who have worked with us for many years. We pride ourselves on the meaningfulness of employee experience, which translates to happy clients. Many clients experience a relief. We are empathetic and understanding and very upfront and explanatory.
We live in an Instagram world where everyone wants to show their best life. It may be difficult for people to reconcile that world and persona they want to express outwardly with the fact they are in debt and need to work with a debt lawyer. How do you and your staff show compassion and empathy to those who reach out for help?
Leslie Tayne: Because we live in an Instagram world, it can seem as if you’re the only one struggling with debt. One thing we always try to emphasize to our clients is that they’re not alone. I myself have struggled with debt earlier in my life after graduating from law school and know how debilitating it can be. Debt is a part of life, and for many, it can be a very difficult part of life and can cause many issues. We want our clients to know that there’s no shame in having debt or in seeking help for your debt. By coming to us, we assure them that they’re doing something good for themselves and for their financial future. We are the doctors of debt! We know debt, how to fix it and be there as a supportive partner to our clients. We have an open-door policy, so the client knows we are always accessible.
I’ve read some negative comments from other personal finance writers when it comes to working with a debt lawyer. Some of these include that they will destroy your credit, charge large fees, and won’t actually help you in a meaningful way. How do you respond to that?
Leslie Tayne: I would say they don’t know the business very well. They may read and write about companies that have taken advantage of consumers, and that is very unfortunate. We’ve worked with many consumers who have come from other companies where nothing was done, and they have many issues as a result. I understand the experiences, as I have been in this business more than 20 years now. What I do know is that it works. It doesn’t destroy credit. Most people even with great credit scores have no money in the bank and can barely pay bills. Debt has to be resolved to have good credit. If they are referring to late fees from creditors that again tells me there is little understanding about how we work. The big picture is that someone has debt and they can’t manage it for one reason or another. We can fix that and create cash flow, eliminate the debt, and save them time and money, and there is a natural credit repair process. I also know that the industry is tarred from the past and that there are still these companies that pop up and do the wrong thing. I wish they’d write about those of us doing the right thing and understand the experience of clients crying for joy when I call and tell them it’s all done.
Can you work with clients in all 50 states? Is there any limitation that would cause a debt lawyer to only be able to practice in one state?
Leslie Tayne: I can and have worked with clients nationwide. However, some states have restrictions based on debt collections laws.
Where can someone find out more information or get in contact with you?
Leslie Tayne: You can visit our website at www.taynelaw.com or call us at 866-890-7337 for a free no-obligation consult. Or, if they preferred we can communicate via email at info@taynelaw.com. We’re also on social media (Twitter @LeslieHTayneEsq @taynelawgroup Instagram @TayneLawGroup), and I encourage people to follow us to stay up to date with the latest personal finance trends and hacks.
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