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What’s Your Opinion? Is Debt Settlement the Unauthorized Practice of Law?

By on March 23, 2011
What’s Your Opinion? Is Debt Settlement the Unauthorized Practice of Law?

I was just reading a recent case filed against Freedom Debt Relief, Freedom Financial Network, Global Client Solutions, and Brad Allen. The case alleges that the defendants violated the debt relief provisions of the bankruptcy code, violated California law, engaged in the unauthorized practice of law and violated the California consumer fraud act. You can read the full complaint here.

The reason this caught my eye is twice this week I’ve heard or read the argument that debt settlement services are activities that only a lawyer can deliver.

The first time was in the arguments presented by an attorney from Greenspoon Marder, Richard Epstein, while representing Consumer Law Group. In the courtroom this week his position in the State of North Carolina vs. Consumer law Group was debt settlement was debt adjusting and by it’s very nature was the practice of law and something lawyers do on a regular basis. – Source

So What’s Your Opinion is a series that invites readers to post their thoughts, opinions, comments, and observations about a particular situation or issue. You can weigh in and be heard by posting your feedback in the comments section below.

Now comes this case, filed just days ago, that states:

  • The actions and advice of Defendants constituted the providing of advice, counsel and direction to Plaintiffs, knowingly engaging in the unauthorized practice of law.
  • Defendants’ statements and actions created or reinforced the impression that Defendants were acting in Plaintiffs’ best interests, and knew what they were talking about.
  • Defendants derived a benefit from engaging in the unauthorized practice of law.
  • Defendant caused injury to Plaintiff by engaging in the unauthorized practice of law.

So what is your opinion. Can debt settlement only be provided by a lawyer and if debt settlement services are delivered by a non-lawyer, is it the unauthorized practice of law?


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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  1. ComplianceSlave

    March 23, 2011 at 4:47 pm

    Of course not- To answer the original question.

    However, in the event the client is sued, the settlement company needs to be very careful in terms of advice on how to handle the matter.

    Anyone can settle a client’s debts- even a lawyer (from time to time)

  2. ComplianceSlave

    March 23, 2011 at 8:47 pm

    Of course not- To answer the original question.

    However, in the event the client is sued, the settlement company needs to be very careful in terms of advice on how to handle the matter.

    Anyone can settle a client’s debts- even a lawyer (from time to time)

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