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Debt Relief FAQ
What does McFarlin LLP do for clients?
McFarlin LLP negotiates substantial reductions in unsecured client debts for our clients as an alternative to bankruptcy. Examples of the kinds of debts we negotiate are personal loans, credit card debt, private student loans, second mortgages subject to deficiency judgments, car loan deficiencies post-repossession, medical debt, and trade debt. In a typical scenario, we work hard to settle our clients’ debts for 30 to 50 cents on the dollar, but of course no attorney can ever guarantee a result.
We offer many of our services on a flat fee basis, which is essentially determined by the amount of the debt and number of creditors. We have programs that are affordable for most individuals and families.
Why hire McFarlin LLP rather than doing this myself?
The attorneys at McFarlin LLP are highly skilled at negotiating with creditors, and we have a track record of getting much better results than a debtor can on their own. Because we are lawyers, the creditors scare tactics and intimidation does not affect us, which is typically a collectors primary tool. Furthermore, if the creditors do sue, we are ready to fight for our clients. Creditors know that the threat of suit and filing a lawsuit is a great tactic when dealing with unrepresented creditors, and they also know the same tactics do not work with the experienced attorneys at McFarlin LLP.
We have experience with a large number of creditors and are continuously engaged in settlement negotiations with them on behalf of different clients. We know what a reasonable settlement looks like because this is our core competency and we have been down this road many times before. We know how to work effectively and efficiently. Ask yourself if you know how to handle requests for financials, whether you have to tell them where you work, or how much it costs you to live. We know how, when, and if to answer these and other questions.
Can my creditors still sue me if I hire you?
Yes, but it is much less likely that they will. A minimal number — less than 10% —of the accounts we are negotiating end up in litigation. Several factors can help us predict whether or not an account is likely to go to litigation, and we work hard to find ways that let you avoid the hassles of litigation while fairly settling your debt. In our experience, being represented by counsel makes it less likely, but not impossible, that you will be sued
And remember, if you are sued we our firm is happy to represent you after we have positioned legal defenses to raise and possibly even counter claims against creditors.
Can I tell the creditors to contact you?
Absolutely! As soon as you hire us, you can refer every creditor to us. You never have to speak to them again and, if they keep bothering you after you have told them not to, you might even be able to go after them for harassment.
Can creditors call my place of employment?
Creditors can contact you at work unless they are told that you are not allowed to receive calls at your place of employment. The FDCPA dictates how creditors must behave, and California law also places restrictions on creditor behavior. When you become a McFarlin LLP client, we help get the creditors off your back.
How does working with you differ from debt consolidation?
With debt consolidation, you pay back the full amount your creditors claim you owe them, plus interest. While it may seem like a good idea, debt consolidation is simply a process in which you combine all of your debt into one account and then make a single payment each month to a facilitator who then turns around and pays each creditor. When you to the debt consolidation route, you need to be prepared for all of your credit cards to be canceled and for your creditors to make adverse reports to the credit bureaus.
Debt consolidation almost always costs significantly more than debt settlement and does nothing to protect your credit score.
Can I keep some of my credit cards?
As a general rule, if you choose to work with us, you should be prepared to give up your personal credit cards. Business credit cards, provided they are in the name of a separate business with a separate EIN, are often different from this process and can be retained.
What if my creditor won’t work with you?
It may sound surprising, but we are happy for creditors to “refuse” to work with us. If they later sue, they will be the one who comes across as unreasonable and fueling unnecessary litigation. Additionally, it’s great for you if creditors refuse to work with us because we will take the position that the debt is not valid (based on our validation demand) and advise your creditors of such. This is a great position to be in because the creditor does not sue and eventually stops collecting so you walk away not having paid anything.
What happens if you can negotiate a better deal than you first thought you would?
You, the client, always get the benefit of any favorable deal that is negotiated. If a creditor does not pursue legal action and allows the statute of limitations to run out, you walk away without paying them anything! Frankly, this is the outcome of most accounts we work with, the creditor makes a determination that it’s more trouble than it’s worth to continue pursuing the debt and moves on to someone else.
Do you do bankruptcy?
Yes, we have attorneys who handle bankruptcy cases. Our bankruptcy practice also gives us additional credibility settling with creditors because we can legitimately tell them we may be filing a bankruptcy if the settlement is not met.
What if I cannot make my monthly payments?
If you have had a change in financial circumstances that will prevent you from making payments going forward, we may need to discuss other options, including bankruptcy. If you are dealing with just a temporary setback, we will try to work with you to get you back on track.
How will defaulting on my cards affect my credit score?
You can anticipate a drop of between 100 and 150 points in your credit score after defaulting on a credit card. By law, a credit card company must “remove your debt as an asset on their balance sheet (called a “charge-off”) after you miss six payments. Once it is charged off, the credit card company can no longer report you as a late payer, although your score will be impacted for a year following the last negative report. You can estimate that you will see a negative impact on your credit for at least 18 months following your first missed payment, and after that, the negative impact will cease. However, there are good credit repair options out there we are happy to discuss with you.