What is the normal procedure for paying a debt being settled by an attorney?
My attorney is helping me resolve certain debts, & has asked me to give the money to him, he said he will put it in a trust account and then pay the amount owed to the creditor out of that.
I have never done this before, is this normal procedure? I feel weird about it, it is a lot of money and I’m worried it could be a scam, how do I know he will pay the amount to the creditor? What could I do about it if he didn’t? He does seem trustworthy and has been in business a long time, I just don’t know what is normal procedure.
I would appreciate guidance from those who have been through this and/or work in law.
Posted July 29th, 2010 in Debt Settlement. Tagged: amp, creditor, debts, guidance, long time, money, trust account.
It is normal to place the funds in a trust account. The purpose of this is to keep those funds separate from your normal funds so that it does not get spent or mixed up once payments are settled and due to the creditors. It also acts as a guarantee to the creditors that you have the money ready to pay them upon settlement. You can keep track of the trust account and make sure the payments are going to the proper creditors if you want.
If your attorney does not pay the creditors and takes any of the money for himself, mixes it with his own money, or does anything else that you would be worried about he is exposing himself to a major malpractice lawsuit which would ultimately cause him to lose his license and not be able to practice as an attorney ever again. Not to mention the criminal charges for fraud and embezzlement which would put him in jail for a good amount of time.
If he has been in the business for a long time, you should have nothing to worry about.
July 29th, 2010 at 7:01 pmThat’s the way it works. You don’t write the checks. He should give you an accounting of how the money is disbursed.
July 29th, 2010 at 7:01 pmIt’s fine… just make sure you get all the paperwork
July 29th, 2010 at 7:01 pmYour attorney will give you a contract to sign which stipulates how the monies will be held, the amount tendered (and use a check with memo ‘to attorney for debt account’) and that he / she will use the monies deposited for payment of and to satisfy debts.
You should ALWAYS read the agreement and not hand the money over until the contract is offered. You also should be a signatory on the account or at least have the information as to where the account is held and proof the account is in trust or escrow.
July 29th, 2010 at 7:01 pm