Client comes to my office and says, "I've been paying $600/month to a debt consolidation company."
I respond with, "How long have you had this problem?"
Client answers, "About 9 months."
"I'm in the wrong line of work," I joke. "Ok, so you've paid $5,400 to a debt consolidation company over the last 9 months. What have they done for you?"
The client slaps a lawsuit from his creditor on my desk, "This."
"Looks like money well-spent."
"You trying to make a jerk out of me?!" retorts the client.
"Absolutely never. I'm just trying to feel your frustration, that way I can offer an concrete solution."
"I'm sorry—ever since I've thrown my money away on this program, I simply don't trust people anymore."
"I mean what's the big difference between you and a debt consolidator anyway?"
I reply, "Well, we only have 30 minutes, but let's start with a college education, 3 years of law school, the hardest Bar exam in the nation and the license to represent clients in a court of law. Can your debt consolidator boast of such accomplishment?"
"My debt consolidator didn't finish high school."
"So, why was it so easy for you to pay them $5,400 before coming to see me?"
"Because they talked a big game. They promised me it would all be better without having to resort to such desperate measures. They warned against the 'B' word."
"Ah, I see. In other words, the words 'debt consolidation' or 'debt settlement' sounded less intimidating, of lesser consequence, of lesser psychological and overall impact than bankruptcy?"
"Well, don't they?"
"And what did the money you paid gain you again?" I ask.
"And why exactly did you get sued?"
"I don't know—you're the lawyer."
"Because a debt consolidation or settlement company has no power to prevent the execution of legal rights and remedies for breach of contract, i.e., lawsuit. They base their over-priced services merely on the hope that your creditors will listen, negotiate and cooperate. Now you're being sued by the very creditor your consolidator vowed to work with, and it cost you $5,400 to find this out. But you did it because it sounded 'safer'—like a doctor telling you he can clear up the blood clot in your aorta by rubbing aloe on your chest."
"It's not funny."
"I think it's despicable. First off, I could have protected the cash you spent under California exemptions. Secondly, I would have charged a fraction of what you paid and gotten you a complete discharge of this and other debts through a federal bankruptcy court. By now you would be rebuilding your savings and reestablishiing credit. Unfortunately, this is now the first time we're meeting, but better late than never, I say. I'm happy you're here with me today. Now let's talk serious, legal solutions."
"How much will you charge?" The client asks.
"For a simple case like yours, where you are substantially under the median income, have no assets, no real property and not an unreasonable amount of credit card debt, I would charge you anywhere from $1,000-$1,500 in legal fees. Put another way, about $4,000 less than you paid to your consolidator. For my fees, your lawsuit would be suspended indefinitely and eventually discharged after a few short months in the bankruptcy court (discussions on adversary proceedings aside)."
"You make it sound too easy."
"On the contrary, having the courage to make the right decision is usually quite difficult, but now that you've come to the realization that your creditor is poised to extract 25% of each of your paychecks by force of law and through your local Sheriff's office, I think the decision is simple. You know the facts, the suffering you're undergoing; I know the laws and how they can help provide instant relief for the honest debtor."
"I'm an honest debtor."
"Then let's get you instant relief."
"Anything else I should know before we begin?"
"Yes. If you want to buy a lawsuit, pay a debt consolidator."
"Never again," says the client.