New federal laws regarding credit reporting, consumer rights and bankruptcy have Utah law firms adapting to keep up with their clients' evolving rights.

CreditAttorney, P.C. and Lexington, two Utah law firms that each represent several thousand clients in correcting their credit reports, use the Fair Credit Reporting Act to dispute negative marks like repossessions, collections and late payments. Because of the substantial benefits of a high credit score, the firms' clientele bases are always growing.

"CreditAttorney has been growing rapidly over the last three or four years," said Randy M. Lish, an attorney with CreditAttorney, P.C.

Lish said although most clients see a substantial improvement to their credit reports while working with the firm, clients need to manage their income appropriately to sustain these benefits. However, clients whose problems include failed business ventures, complicated divorces and unforeseen illness or injury are often able to restore and maintain a good credit standing after the closure of their case, he said.

A federal statute that went into effect in October makes it more difficult to absolve debts through bankruptcy, so responsible debt management is now even more important than ever.

Lish, whose practice also includes estate management and asset protection, said he suggests reading "The Millionaire Next Door" by Thomas J. Stanley and William D. Danko for advice on how to avoid major financial pitfalls. The book, which purports to be a study on the lifestyle of millionaires, states that wealthy people do not divorce or buy ultra-extravagant houses, as these can be serious financial mistakes.

Tim Coston, CreditAttorney's legal sales manager, said clients are becoming more aware of different components of their credit scores. He said the firm intends to satisfy this budding awareness by offering additional services like identity theft insurance and credit report alerts when any new information is posted. The firm sometimes gains 300 clients in a single day, so Coston said the firm intends to hire additional support personnel in Provo and open another office in southern California.

Although credit correction firms are growing, bankruptcy attorneys are experiencing reduced demand.

Kylie Morgan, administrative assistant at Lincoln Law Center in Orem, said clients were lined up outside the office to file for bankruptcy before the new statute went into effect. She said fewer people are filing now because it is now more difficult to file chapter 7 bankruptcy and still keep any assets.

While Utah firms have felt a decrease in bankruptcy filings, Morgan said other states with lower median incomes have been more greatly affected.

Copyright Brigham Young University 20 Jun 2006