How Much Will a Lawyer Charge to Negotiate With My Creditors? (2024)

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How much it will cost to hire a lawyer to negotiate with your creditors can vary significantly depending on your circ*mstances. In most cases, how much a lawyer will charge depends on:

• the scope of work the attorney performs
• the type and amount of debt you have, and
• how difficult it will be to settle the debt.

Generally, attorneys' fees are directly related to how much work the lawyer will have to perform. If you want to negotiate with your creditors, you might be able to hire an attorney to handle the entire negotiation process until settlement or perform a specific task related to the negotiation (called an "unbundled" service), like drafting a settlement proposal.

Common Debt Negotiation Attorney Fee Structures

To negotiate with your creditors, an attorney might charge:

• a flat fee per creditor (or debt)
• an hourly fee
• a fee based on the amount of debt you have, or
• a fee based on how much the settlement saves you.

How Much Will an Attorney Charge to Negotiate With Your Creditors?

The following are some of the most common examples of how much an attorney might charge you to negotiate with your creditors.

Flat Fee Per Creditor or Debt

Depending on how many creditors you want the attorney to negotiate with, the lawyer might charge you a flat fee to handle the entire negotiation through settlement. The fee amount will typically depend on the number and type of creditors you have.

In general, average fees can range from $500 to negotiate a simple credit card debt to more than $5,000 for more complex negotiations.

Fees Per Hour

The attorney might charge you an hourly fee to negotiate with your creditors. In that case, the lawyer could agree to let you pay as you go or require a retainer (a lump sum of money) to begin negotiations. An attorney's hourly rate will depend on several factors, including the amount of experience the lawyer has and where you live.

In many cases, you can expect a debt negotiation attorney to charge anywhere from $125 to $350 per hour.

Fees Based on the Amount of Debt You Have

An attorney might base fees on the amount of debt you have. In most cases, the fee will be a specific percentage of the amount of debt the attorney will negotiate on your behalf.

Fees Based on Amount Saved

Similar to fees based on the amount of your debt, an attorney might charge you a percentage of the money you'll save with the settlement. With this kind of arrangement, the attorneys' fees increase with the amount you save, which gives the attorney more incentive to get you the best possible settlement.

What Is an Unbundled Service?

If you don't want to hire an attorney to handle the entire negotiation process, you can ask the lawyer to provide an unbundled service. An unbundled service is a specific task that the attorney will complete for a fee.

The fee will vary depending on the complexity of the task and the lawyer's enthusiasm for providing unbundled services. In debt negotiation, the most common unbundled service is drafting a settlement proposal to the creditor. If you hire an attorney to write a letter to the creditor, it can start the negotiation process. But you'll be responsible for negotiating and ultimately settling the debt on your own. For this reason, an unbundled service will cost less than hiring an attorney to handle the entire negotiation.

But many attorneys won't work on just part of a case—it's not worth their time. Another reason many attorneys don't like to work on a piecemeal basis is that they worry that they might be on the hook if something goes wrong in another part of your case. Also, the bar associations of many states discourage lawyers from providing unbundled services.

Circ*mstances That Could Increase Attorneys' Fees

An attorney might charge a higher fee if:

• the creditor has filed a lawsuit against you
• the creditor has obtained a judgment against you, or
• you want to negotiate or modify the terms of a secured debt such as your car loan or mortgage.

Talk to Different Attorneys in Your Area

Because attorneys' fees can vary significantly based on your individual circ*mstances, talk to several debt negotiation attorneys in your area to compare the fees they would charge in your case.