If you have received a letter from a “firm” called “Ferry & Nicholas,” it means that you have been sued by a credit card company or debt collector.  Ferry & Nicholas runs a clever little scheme.  See, they’re not lawyers, which means that they don’t have to comply with the Alabama Rules of Professional Conduct.  Why does this matter?  Because the Alabama Rules of Professional Conduct forbid lawyers from sending people letters until 7 days have passed since you were served with the lawsuit.

Now, I know full well that most bankruptcy lawyers don’t bother to comply with this rule – they just print the list of lawsuits from the court in their county and have their secretaries blast letters to every lawsuit debtor.  And these letters tell you how great and easy and cheap and perfect-for-every-situation bankruptcy is, and that if you don’t file bankruptcy, you’re pretty much doomed to a life of decrepitude.  Of course, that’s total bullshit, but that’s another issue for another day.

Ferry & Nicholas, however, doesn’t even have to pretend to comply.  So all of these people — who have no idea they’ve even been sued, and that they’re about to enter a precarious situation where it is very important to protect their legal rights, and who really need access to real legal advice about their situation — these people get introduced to the legal debt collection system by someone who is utterly unqualified to represent debtors and their interests.

Now, some may say “what’s the harm?”  At least you’re getting an advance warning that the lawsuit is coming, right?  Well, to the extent that some debtors are sophisticated people who understand how the court system works and know the risks of hiring a debt settlement factory to do a lawyer’s job, yes, there is no harm.  But unfortunately, most people don’t know the legal system.  And most people don’t know that Ferry & Nicholas cannot do a thing to stop Midland Funding or Portfolio Recovery Associates or LVNV Funding or whoever it is from taking a judgment against you.

So they don’t know that when they hire Ferry & Nicholas, the clock is still ticking on the deadline to answer the lawsuit.  And in District or Small Claims Court, that deadline is only 14 days.  In Circuit Court, the deadline is 30 days.  And what happens if the deadline passes while Ferry & Nicholas is negotiating, or, as they call it, “mediating” your debt?

A default is entered against you.  Which means that you’ve lost your lawsuit, which means that the creditor has utterly no motivation to settle with you.  By contrast, you could spend the same amount of money hiring a real attorney, and either settle for a deep discount or beat the lawsuit completely.

I had a client who hired Ferry & Nicholas and they “successfully” settles a collection case for her.  But unfortunately, Ferry & Nicholas didn’t do anything to make sure the collector stuck to the deal.  And here’s the craziest part: they didn’t even get the deal in writing!  Their ‘mediation’ was a telephone call they made with the collection lawyer – and the deal they struck?  A 0% discount!  They agreed to a judgment of the FULL AMOUNT OF THE LAWSUIT.  YOU CAN DO BETTER THAN THAT WITHOUT HIRING ANYONE.  With a decent lawyer, you can do wayyy better than that.

So if you get a letter from Ferry & Nicholas, throw it in the trash and get some real help.