Do I Still Owe My Lawyer 10% If My Debt Was Sold?

Question from Going Broke, Do I Still Owe My Lawyer 10% If My Debt Was Sold?

Answer from AI:

If your business hired a lawyer to lower debt payments or get the debt discharged, and the debt was sold to a collection agency without the lawyer’s help, you might be wondering if you still owe the lawyer their fee. Here’s a general explanation of the situation:

Understanding Lawyer Fees and Debt Discharge

Lawyer fees are typically governed by the contract you signed with the lawyer. This contract should outline the specific conditions under which the lawyer is entitled to their fee. Here are some key points to consider:

• Contract Terms: Review the contract you signed with the lawyer. It should specify the conditions under which the lawyer earns their fee. If the contract states that the lawyer earns a fee only if they successfully discharge or reduce the debt, and they did not achieve this, you may have grounds to dispute the fee.
• Debt Discharge vs. Debt Sale: Discharging a debt typically means that the debt is legally forgiven and you are no longer obligated to pay it. Selling a debt to a collection agency means the debt still exists, but the creditor has changed. If the debt was sold and not discharged, the lawyer may not have fulfilled their contractual obligation.
• Statute of Limitations: If the statute of limitations for the collection agency to collect the debt has expired, you may not be legally obligated to pay the debt. However, this does not necessarily affect the lawyer’s claim for their fee, which is based on the contract.

Steps to Take

If you believe the lawyer is not entitled to their fee, consider the following steps:

1. Review the Contract: Carefully read the contract you signed with the lawyer to understand the terms and conditions regarding their fee.
2. Communicate with the Lawyer: Discuss your concerns with the lawyer. Explain that the debt was sold, not discharged, and that you believe they did not fulfill their contractual obligation.
3. Seek Legal Advice: If you cannot resolve the issue with the lawyer, consider consulting with another legal professional. They can provide personalized advice based on the specifics of your case.
4. File a Complaint: If you believe the lawyer is acting unethically, you can file a complaint with your state’s bar association. They can investigate the matter and take appropriate action if necessary.

Resources

For more information, you can refer to the following resources:

• American Bar Association – Client Protection
• Consumer Financial Protection Bureau – Statute of Limitations on Debt

When to Seek Legal Advice

It is important to seek legal advice if you are unsure about your obligations under the contract with your lawyer. A legal professional can review the contract and provide guidance based on the specifics of your situation. Remember, this information is general in nature and should not be considered legal advice. Always consult with a qualified attorney for personalized legal assistance.