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    #1

    Debt settlement company problem / issue

    Hi...I was had obtained a debt settlement company prior to finally declaring chapter 7... It had a good reference, CBS Evening News.. Anyhow, the issue was that their repayment plan over 3 years was $1900 a month which exceeded our income by around $2100 a month. Like a fool, I entered into the contract thinking overtime and a second job would take care of it... That did not work and after 7 months (and 3 of the creditors stating they would never agree to a contract with them) we threw in the towel and are filing Chapter 7.

    The question is, did the debt settlement company act in good faith in establishing the contract even though it knew we were under water several hundred dollars a month even before their plan? They refunded us a portion of the money paid into the program but not all of it..
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    #2
    Well of course they won't give you all of it. They are a business. I would never suggest one of those companies.

    I don't know if you have a tort against them, but did they credit your accounts ANY money?

    Congrats that you made the business decision, to bk7. 'Hub
    If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

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      #3
      None of the creditors would work with them ( the debt settlement company said it needed more time for it all to work)..
      Even if any of them did, there was no viable way to make that $1900 a month payment. That is what I am upset with, them creating that contract and then I signing it...

      Right now, I am just trying to see if I have any recourse in the matter..

      Comment

        #4
        Debt settlement companies are a scam - that is the long and short of it. They had 7 months and many of our members got good offers within that time frame after 7 months of non payment by NOT working with a debt settlement company. Stay away from them...better to negotiate yourself or file a 13 and have the BK law behind you if you want to make monthly payments to your creditors.

        As to recourse, go to a consumer attorney on NACA.net to see if you have any chance to recover any fees (unlikely, but worth checking out).
        Filed CH 7 9/30/2008
        Discharged Jan 5, 2009! Closed Jan 18, 2009
        I am not an attorney. None of my advice is legal advice in any way..

        Comment

          #5
          Originally posted by dpr88 View Post
          None of the creditors would work with them ( the debt settlement company said it needed more time for it all to work)..
          Even if any of them did, there was no viable way to make that $1900 a month payment. That is what I am upset with, them creating that contract and then I signing it...

          Right now, I am just trying to see if I have any recourse in the matter..
          I doubt you have a recourse. You signed a contract. The long and the short of it. 'Hub
          If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

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            #6
            IF it went to small claims court or something ( I am not sure what) would there be an ethics issue of them creating a contract that we would never be able to execute or perform. Again, not even counting any credit card payments, just our household expenses, etc. put us at about $200 under water. Add their $1900 a month puts us at $2100 a month under.. They did run an extensive analysis and which showed THEM that we were under water..

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              #7
              Is there an ethical issue of YOU signing a contract that YOU knew you couldn't manage? I'm just not seeing a lawsuit going your way, because you are banking on the fact that they "fraudulently" came up with a number you couldn't afford, but what is to stop them from coming back and saying that they were acting in good faith because YOU told them that you could do it, in fact they have your signature on the contract to PROVE you said you could pay it back at that rate?

              PS. I agree, they are a scam, and sorry about your situation, truly. Just want you to see the reality of the situation, that you can't sue them for fraud for signing a contract that you yourself signed stating that what was in the contract was true, if you know what I mean.
              Filed CH 13 September 17, 2007
              Plan Modified July 8, 2009 from $1100/month to $400/month due to change in income, finally discharged in July of 2013!

              Comment

                #8
                That would not apply because they took all our financial info in and the analysis that THEY THEMSELVES prepared stated that our income was $200 short of meeting our obligations every month and that is without adding in ANY credit card payments or payments to them.

                They set up the program knowing we did not have enough income to cover it.

                Comment

                  #9
                  Originally posted by dpr88 View Post
                  That would not apply because they took all our financial info in and the analysis that THEY THEMSELVES prepared stated that our income was $200 short of meeting our obligations every month and that is without adding in ANY credit card payments or payments to them.

                  They set up the program knowing we did not have enough income to cover it.
                  Chalk it up as one of life's hard lessons and move on. You have no recourse.
                  Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

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                    #10
                    Why wreck your credit and get into a Chapter 13 plan that is not ratified by the court? I've never seen anyone solve anything with a debt settlement company.
                    I am a Pennsylvania Eastern and Middle District Bankruptcy, FDCPA, FCRA and Foreclosure Defense attorney, information I post is based on experience in these districts. It is not legal counsel, consider it friendly counsel.

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                      #11
                      I found out the hard way on this... I was hoping to do the 'right' thing and try to work with the creditors but it turns out they did not want anything to do with the settlement company and the 3 year plan.. The guy hired buy B of A told me that they would settle with me for 20% but only with me. They would not even consider doing something with them for 3 years.

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                        #12
                        I have filed a complaint with the Attorney Generals Office in my state against a Debt Settlement Company. Will let you know how it goes ???
                        Those who live in glass houses should not throw stones
                        Chapter 13 filed 10-21-09
                        Discharged 4-13-15

                        Comment

                          #13
                          Originally posted by klandsb View Post
                          I have filed a complaint with the Attorney Generals Office in my state against a Debt Settlement Company. Will let you know how it goes ???
                          Yes please do let us know how that goes. I am curious since I also was scammed by a debt settlement company (about a year ago) before filing for CH7.
                          Chapter 13 filer since Feb. 2018 under a 60 months payment plan
                          Please think positive and do not give up!

                          Comment

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