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Can a Lawyer Negotiate Credit Card Debt?
by
JG Wentworth
•
May 13, 2025
•
6 min
Credit card debt can quickly become overwhelming, and many individuals find themselves searching for effective ways to reduce their financial burden. While various debt relief options exist, one question frequently arises: Can a lawyer negotiate credit card debt, and if so, is it worth the cost?
Let’s explore the role attorneys can play in credit card debt negotiations, alternatives you may want to consider, and how to determine the best approach for your financial situation.
How lawyers can help with credit card debt
Lawyers experienced in debt settlement can indeed negotiate with credit card companies on your behalf. They typically offer several services:
Debt settlement negotiations
Attorneys can contact your creditors directly to negotiate lump-sum settlements for less than the full amount owed. This approach often involves:
- Analyzing your debt portfolio to determine negotiable accounts.
- Developing a strategic approach based on your financial situation.
- Leveraging their professional status and knowledge of relevant laws.
- Documenting formal settlement agreements that protect your interests.
Protection from collection actions
When you retain legal representation for debt issues:
- Creditors must communicate through your attorney rather than contacting you directly.
- Your lawyer can address violations of the Fair Debt Collection Practices Act (FDCPA).
- Legal representation may deter aggressive collection tactics.
- Attorneys can evaluate and potentially challenge the validity of debts.
Bankruptcy alternatives
For severe debt situations, attorneys can:
- Assess whether bankruptcy might be appropriate.
- Explain Chapter 7 or Chapter 13 bankruptcy implications.
- Provide less drastic alternatives when possible.
- Create a plan to rebuild credit after settlement.
When to consider hiring a lawyer for credit card debt
Involving an attorney makes the most sense in specific circumstances:
- Large debt amounts: Generally, professional debt negotiation becomes more cost-effective with debts exceeding $10,000.
- Legal complications: If you’re being sued for debt or facing wage garnishment.
- Complex financial situations: Multiple creditors, disputed debts, or potential FDCPA violations.
- Failed DIY attempts: If your own negotiation efforts have been unsuccessful.
- Need for legal protection: When creditor harassment has become excessive.
The cost factor: Attorney fees
Legal representation for debt negotiation typically follows one of these fee structures:
- Percentage-based fees: Commonly 15-30% of the debt amount or amount saved.
- Hourly rates: Usually $150-400 per hour depending on location and experience.
- Flat fees: For specific services like reviewing settlement offers.
All of these costs can add up quickly and should be weighed against potential savings. For example, if an attorney charging 25% of savings negotiates a $20,000 debt down to $8,000 (a $12,000 reduction), their fee would be $3,000, leaving you with $9,000 in net savings.
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Alternatives to hiring a lawyer
Before committing to legal representation, consider these alternatives:
DIY debt negotiation
You can negotiate directly with creditors by:
- Contacting the credit card company’s hardship department.
- Explaining your financial hardship with documentation.
- Making a reasonable settlement offer (typically 30-50% of the balance).
- Getting any agreement in writing before making payments.
Credit counseling agencies
Nonprofit credit counseling services offer:
- Free or low-cost debt management plans.
- Potential interest rate reductions.
- Financial education resources.
Debt settlement companies
For-profit debt settlement companies:
- Negotiate with creditors while you save money in a dedicated account.
- Typically charge 15-25% of enrolled debt.
- May encourage you to stop payments during negotiations (which can temporarily impact credit).
- Offer no legal protections if creditors decide to sue.
Potential drawbacks of using a lawyer
When considering legal representation for debt negotiation, be aware of:
- Cost: Legal fees can be substantial (lawyers charge by the hour).
- Tax implications: Forgiven debt over $600 may be taxable as income.
- Credit score impact: Settled debts typically appear on credit reports as “settled for less than full amount.”
- No guarantees: Even attorneys cannot force creditors to settle.
Making the right decision for your situation
To determine if hiring a lawyer is appropriate for your credit card debt:
- Assess your debt situation: Calculate total debt, interest rates, and monthly payment requirements.
- Consider your financial resources: Determine what you can realistically afford to pay.
- Evaluate your legal exposure: Are you facing lawsuits or wage garnishment?
- Explore all options: Request free consultations with both attorneys and credit counselors.
- Compare potential outcomes: Calculate potential savings versus fees for each approach.
Questions to ask a debt settlement attorney
If you decide to consult with a lawyer, ask:
- What percentage of your practice focuses on debt settlement?
- What success rate have you had with similar debt amounts?
- How do you structure your fees?
- What is your communication process during negotiations?
- Will you handle all creditor communications?
- Can you provide client references or testimonials?
The legal negotiation process
If you choose to hire an attorney, the typical debt settlement process involves:
- Initial consultation: Reviewing your debts, income, and potential solutions.
- Engagement agreement: Defining scope of representation and fee structure.
- Communication shift: Redirecting creditors to your attorney.
- Negotiation phase: Attorney contacts creditors with settlement proposals.
- Review of offers: Evaluating settlement offers as they arrive.
- Documentation: Formalizing accepted settlements with legal documentation.
- Payment execution: Making settlement payments according to agreement terms.
- Case closure: Confirming zero balances and proper credit reporting.
The bottom line
Lawyers can indeed negotiate credit card debt, often achieving significant reductions for their clients. However, this approach isn’t necessarily the best solution for everyone. The decision should be based on your specific debt amount, financial situation, and whether you’re facing legal action from creditors.
For moderate debt amounts without legal complications, DIY negotiation or credit counseling may provide more cost-effective solutions. For substantial debts with potential legal issues, an attorney’s expertise could save you money while providing valuable protection from collection actions.
There’s always JG Wentworth…
If you have $10,000 or more in unsecured debt there’s a good chance you’ll qualify for the JG Wentworth Debt Relief Program.* Some of our program perks include:
- One monthly program payment
- We negotiate on your behalf
- Average debt resolution in as little as
- We only get paid when we settle your debt
If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side?
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* Program length varies depending on individual situation. Programs are between 24 and 60 months in length. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 43% before our 25% program fee. This is a Debt resolution program provided by JGW Debt Settlement, LLC (“JGW” of “Us”)). JGW offers this program in the following states: AL, AK, AZ, AR, CA, CO, FL, ID, IN, IA, KY, LA, MD, MA, MI, MS, MO, MT, NE, NM, NV, NY, NC, OK, PA, SD, TN, TX, UT, VA, DC, and WI. If a consumer residing in CT, GA, HI, IL, KS, ME, NH, NJ, OH, RI, SC and VT contacts Us we may connect them with a law firm that provides debt resolution services in their state. JGW is licensed/registered to provide debt resolution services in states where licensing/registration is required.
Debt resolution program results will vary by individual situation. As such, debt resolution services are not appropriate for everyone. Not all debts are eligible for enrollment. Not all individuals who enroll complete our program for various reasons, including their ability to save sufficient funds. Savings resulting from successful negotiations may result in tax consequences, please consult with a tax professional regarding these consequences. The use of the debt settlement services and the failure to make payments to creditors: (1) Will likely adversely affect your creditworthiness (credit rating/credit score) and make it harder to obtain credit; (2) May result in your being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money you owe due to the accrual of fees and interest by creditors or debt collectors. Failure to pay your monthly bills in a timely manner will result in increased balances and will harm your credit rating. Not all creditors will agree to reduce principal balance, and they may pursue collection, including lawsuits. JGW’s fees are calculated based on a percentage of the debt enrolled in the program. Read and understand the program agreement prior to enrollment.
This information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that you consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.