Debt Settlement Qestion

[mlevesque308]

Hi guys,

I want to apologize in advance, I'm going to ask a lot of questions and you all might get sick of me.

Question I had is this...... I've been working with a Debt Settlement company, believing I could conquer all the debt and not have to file, well I quickly found that out. I haven't paid my bills since last March, and of course the first few months they don't even want to talk to you. I joined one Debt Settlement company and found out quickly they were a scam.

The 2nd company and I agreed to a settlement in November, with the collection copany who had my Barcaly's account.

They agreed to 8 payments of $708.50 and the settlement company gets $250.00/per month for 6-months.

The amounts are automatically withdrawn from my account on the 28th of every month. Well it just so happens I'm meeting with my attorney on that day. Should I call settlement company tomorrow and let them know they need to tell creditor to stop payment and I'm leaving the program, or should I wait to see what my attorney says?

Thanks in advance again.

[justbroke]

Personally, I would demand, by phone and in writing, that they stop. The problem with this is the "look back" for payments made to unsecured creditors within 90 days of filing. While it doesn't "directly" affect you, it would make your case an asset case and the administration of the case would take long. (The Trustee would claw back the payments and then re-distribute them evenly to all "allowed" unsecured claims made by unsecured creditors.)

[LadyInTheRed]

To make sure they don't take that payment, you may want to close that account. It is not unheard of for a creditor to continue an automatic withdrawal after being told to stop.

They agreed to 8 payments of $708.50 and the settlement company gets $250.00/per month for 6-months.

Good deal for the settlement company!

[mlevesque308]

Thank you. I will do that tomorrow. That being said, the worst case scenerio would be waiting 90-days for that "look back" period to lapse?

[keepsmiling]

Ask ask ask!!!
Read read read!!
We have all BTDT. That's how we learn.... no apologies necessary Before long you will be advising the newbies
And many, many folks here have btdt with settlement companies. The lucky ones found this board before getting too deep in with them.

As you are learning, they almost never are worth it.

[LadyInTheRed]

In the Chap 13 context, the preference may not be such a concern, except that it is better to hold onto the cash than to pay it to the creditor. At worst, I believe the preference payment would just become part of the minimum that your plan must pay to unsecured creditors.

[mlevesque308]

I could do that and then just open a new account.

[mlevesque308]

Thank you for that.

[ksgirl38]

To make sure they don't take that payment, you may want to close that account. It is not unheard of for a creditor to continue an automatic withdrawal after being told to stop.

I would second this. I had one of my credit card companies taking out auto payments and even after I asked them to stop they didn't. It was hell trying to get back the money they did take out and then they went and did it again the next month. Part of it was the banks fault so I was happy to change banks anyway. From my understanding you can put a stop payment on it and I was told this should apply to any future payments as well. Or there's a form you can fill out at your bank. I forget what it's called exactly, but something about a ACH withdraw cancellation. You can ask your creditor to stop the auto payments, but I'd follow up with your bank as well.

[mlevesque308]

I just sent an email over to the Debt Settlement company, but I'm going to go to Bank of America and close the account anyway. I have a couple of those stupid sign-up for our discount card things and get the saving for free for a month, then they charge you $7.99 a month, now I can't find where these people are. Might be nice to start from scratch and allow who I want to auto payments.

[keepsmiling]

If no one asked any questions, we'd cease to have reason to exist here. We'd all be on the movie thread discussing the Oscars. (Haven't seen a single nominee this year btw )
We all learn something from every question asked, and sometimes there is new legislation that changes old answers.
We need to be armed with as much knowledge as we can when going up against the likes of mega entities such as Chase et al.

So... ask away

[ksgirl38]

If no one asked any questions, we'd cease to have reason to exist here. We'd all be on the movie thread discussing the Oscars. (Haven't seen a single nominee this year btw )
We all learn something from every question asked, and sometimes there is new legislation that changes old answers.
We need to be armed with as much knowledge as we can when going up against the likes of mega entities such as Chase et al.

So... ask away

From my experience some of the nominated movies tend to be the most boring.

As far as what to ask your attorney at the consultation, I'm assuming you've browsed their websites and gotten a feel for what kind of cases they handle. Is BK primarily what they do, or is this just a small portion of the types of cases they handle? Will they be handling your case or a paralegal or assistant? How quickly have they responded to your requests for a consultation. It's more or less their opportunity to sell themselves so I'd let them do it. One thing I did was ask all the attorneys I saw the exact same question to see how they answered or what they said and that gave me a feel for who had the best experience.

[mlevesque308]

They attorney I'm meeting with on Thursday, has been an bankruptcy attorney only, for 22 years, 65% of the cases he handles are ch13. I called and emailed him and it took him 45-minutes to call me back, then went on to spend 45-min on the phone with me, he apologized for not being able to meet with me last week, but it was school vacation and he promised his kids he wouldn't work. He fit me in quickly for this week, and everything he told me he was going to send me, was in my inbox 2 hours later from his assistant. I'm meeting with him and he will be going with me to the 321 meeting. All in all, I have a good feeling about him, better feeling then the other jabroni's I've dealt with.

[catleg]

Bankruptcy attorneys are like doctors, everyone thinks theirs is the best until they are shocked, shocked(!) to find out something went wrong and their hero is only human.
Hang around here, ask lots of questions. There are people here with priceless knowledge, versus an attorney who just wants to cash your check and move on to his next case.
Debt settlement is largely a scam. Whether directly with creditors or through middlemen. It usually rips you off and wrecks your credit anyway.
Stop payments, close the account or withdraw funds, you can even file a "reg E" complaint with the bank even after money is taken out to get it back.
Bankruptcy is the only way to truly get a fresh start.

[mlevesque308]

Thanks Catleg for the info.