Credit Card Debt and “debt Settlement,” Real Relief or A Scam?

It's a familiar story for all too many Americans.

You struggle with debt and debt collectors daily. You don't want to file bankruptcy and are looking for alternatives when you come across an advertisement online for a “debt settlement” company…

It can't hurt to reach out and see what they could do to help, right? So you call, and get connected to a real person with a real name who, after chatting about your situation, ends up making some pretty enticing claims. They'll definitely be able to help and they have a plan just for you.

They'll talk to the bill collectors and credit card companies, with whom they have personal relationships or special connections — and you'll receive no more calls, no more letters, and live with no more worry of legal action appearing at your door (and besides, if it does, being lawyers, they can handle the defense for you). And they'll help negotiate your debt down. At this point, who really cares if there's a fee — you could see 25% or even half of your debt disappear! So they send you some paperwork, you sign it, and you feel some relief in their capable hands. “Okay,” you say to yourself, “they've got this. Now I wait.”

Right?

Except, in so many cases, that's where your seemingly good fortune comes to an end. Suddenly, it's difficult to get them to respond. There doesn't seem to be any single person assigned to you, that is made available to you. Time goes by, and you continue to make good on your monthly fee payments to the company (who may have instructed you not to communicate with your creditors).

But then, you get sued by a credit card company. Depending on the circumstances, you may end up filing bankruptcy anyway because, as it turns out, your paperwork doesn't really match up with what you were sold over the phone. You may get trapped going to Court alone, or stuck with an unprepared representative who does you no benefit anyway. One would think, were this to happen, you could sue this company and they would cease their false claims. One would think that no one could possibly get away with this repeated abusive behavior. Yet so many self-described “debt management”, “debt settlement”, and “debt resolution” companies… do.

These companies prey on vulnerable people who are trying to manage their debts and avoid bankruptcy. They take large fees and give themselves the ability to pull from a client's bank account without permission, and sell claims of “relationships” with creditors like snake oil. Meanwhile, many credit card companies openly refuse to negotiate or even speak with these businesses.

If you are looking for solutions to your struggle with debts, this can be frightening information.

More and more middle class Americans are being tightly squeezed by wage stagnation, medical debt, student loans and credit card bills, and folks searching for an alternative to bankruptcy can be vulnerable in their desperation.

Debt settlement, as a rule, is an especially high-risk solution that almost always requires consumers to pay enormous fees while somehow simultaneously growing a savings and keeping up with their other payments, like rent or a mortgage. Committing to and then failing a debt adjustment program typically leaves a person in more financial strain than if they had never entered the program in the first place, yet rates of failure are incredibly high. Failure to complete a payment program is almost always linked to exorbitant advance fees charged by companies. Remember that an honest lawyer is always working in your best interest, and should only ever charge you for the work they do.

In order to protect yourself, look out for red flags: you shouldn't be rushed through paperwork, and when you do read it thoroughly, it should match up with everything you were told over the phone. Be cautious of companies that have names that sound like a law office, yet never actually put you in touch with an attorney — if you're dealing with a shady company, you're likely speaking to a sales rep who negotiates with people like you, not a real lawyer. Additionally, a company shouldn't charge you a huge attorney fee up-front.

For-profit debt adjustment is outlawed or regulated in many states, but companies can be deceitful in how they market their services. They typically target those with substantial credit card debt. While some advertise as debt settlement companies, many also use the name of an attorney or work under the umbrella of a law office in order to disguise their business practices.

Some know to be in the industry* include:

Global Client Solutions, LLC; Global Holdings LLC; US Legal Services Group, P.C. ; Apex Legal Group, P.C.; American Financial Law Group, LLC; Moore Legal Center, P.C.; the Law Offices of Robert S. Gitmeid & Associates, PLLC; Timberline Financial, LLC; GRT Financial, Inc.; Consumer Capital Advocates, LLC; Assurance Consumer Services, LLC; Reliant Account Management, LLC; National Debt Relief, LLC.; Accelerated Financial Services, LLC.; Accredited Debt Relief; America Debt Resolutions; Americor Financial; Atlas Debt Relief; Beyond Finance; Century Support Services; ClearOne Advantage, LLC.; Debt Negotiation Services; DMB Financial, LLC; Elite Financial Services, Inc.; Fast Track Financial; Freedom Debt Relief; GRT Financial, Inc.; InstaFinancial; Liberty Debt Relief; National Debt Relief LLC; Nationwide Debt Reduction Services, LLC; Pacific Debt Inc.; Rescue One Financial; S&N Debt Solutions, LLC; Settle Our Debt.

If you're looking for solutions, hopefully this information can help you avoid the multitude of scam companies that still exist. If you think you've already been deceived by a debt settlement company, we may be able to help. Click here for a free case review from a real lawyer.

*Please note, our law firm has not had cases against most of the entities listed.