How Much Does a Credit Repair Lawyer Cost?

There are many factors that can play a role in legal costs when a lawyer negotiates with creditors on your behalf.

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Any good Dallas credit repair company will tell you that lawyer fees for debt settlement and credit repair depend on the nature of your case. There are many factors that can play a role in legal costs when a lawyer negotiates with creditors on your behalf.

In most cases, how much a lawyer will charge depends on:

  • The scope or level of work the lawyer will need to undertake

  • The amount and sort of debt you have

  • How difficult it will be to settle with your creditors

Process Associated With Settling Credit Issues Through a Lawyer

In most cases, a lawyer's fees are directly related to how much work the lawyer will need to perform. They will negotiate and handle the entire matter until a settlement is reached. In other situations, the lawyer will perform only a specific task related to the proceedings. This is called an unbundled service and can include activities such as preparing a settlement proposal or providing advice about whether a voluntary repo hurts credit.

Understanding Unbundled Services

If you don’t want to hire a lawyer to handle your entire negotiation process, you can ask them about an unbundled service. They can share their estimated fees, which will vary based on the complexity of the task and their willingness to provide unbundled services for the matter at hand–it could be as simple as explaining whether paying off student loans helps credit score.

In debt negotiation, the lawyer will draft a letter to the creditor to kick off the negotiation process. With an unbundled service agreement, it could also involve drafting a settlement proposal to the creditor. Nonetheless, you will still be responsible for negotiating and settling the debt on your own. An unbundled service will cost you less in legal fees compared to hiring a lawyer to handle your whole credit repair case, but you will need to do some of the work yourself.

However, many lawyers will not agree to work on only a portion of a case since it usually doesn’t make sense financially for them. Another reason they may decline is that they will not want to work on a piecemeal basis since they may still be held accountable if something goes wrong in another aspect of your case. Bar associations in some states discourage lawyers from offering unbundled services.

Standard Credit Repair Negotiation Lawyer Fee Structures

There are different ways to structure a fee agreement with a lawyer who is going to negotiate with your creditors. A lawyer may charge:

  • A flat fee for each creditor or debt: Based on how many creditors you would like your lawyer to negotiate with, they may charge you a flat fee to handle an entire negotiation until it is settled. The fee amount will usually depend on your case and the number of creditors. In most situations, the average fee can vary from $500 to $5000, depending on the complexity of the negotiations.

  • A standard hourly fee: A lawyer may charge an hourly fee to commence negotiations with your creditors that can range from $125 to $350 per hour.

  • A fee based on the amount of debt you have: A lawyer may decide to base their fees on your debt level. Typically, such a fee structure will be a specific percentage of the amount of debt the lawyer negotiates on your behalf.

  • A fee based on how much the proposed settlement will save you: Just like fees based on the level of your debt, a lawyer may charge a percentage of the money you will save with a settlement. With such an arrangement, the lawyer's fees rise with the amount you save, giving them more incentive to secure the best possible settlement.

In Conclusion

Lawyers' fees can vary significantly based on the case they are handling. If you are looking for a credit repair lawyer in your area, you should probably talk to several of them to see what they charge, or get advice from a reputable credit repair specialist first, such as those at The Phenix Group.

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