DEBT RELIEF COMPANIES DON’T DO WHAT THEY SAY THEY DO
The Consumer Financial Protection Bureau recently brought a case against Freedom Debt Relief (one of many Debt Settlement Companies) alleging that they weren’t telling its customers everything about how settlement works, and that it wasn’t handling their debts like it advertised.
Unfortunately I’ve meet with lots of people who have tried debt consolidation using debt settlement companies and quickly learned that they don’t work. Almost always, they tell me that the settlement company had terrible customer service, that the client couldn’t tell them what was happening, that they had multiple creditors that would not participate in the program, and that they ended up being issued a 1099(c) or sued. Moreover, debt settlement is expensive and takes a very long time.
The Complaint filed against Freedom Debt Relief mentions some of these same issues. A few things that the complaint says about Freedom Debt Relief:
FREEDOM DEBT RELIEF MISLED CUSTOMERS
Freedom Debt Relief misled consumers about whether ALL of the creditors will be willing to negotiate, or only SOME of them will be willing to negotiate.
In my experience, people who try debt settlement companies have a small amount of success in settling a few small debts, but the other creditors continue to collect, file lawsuits, and sometimes even get judgments.
The debt settlement company(ies) can’t keep the other debt collectors at bay. Debt settlement companies do not stop debt collection law firms from getting judgments while they are working to settle the other debts.
Bankruptcy, however, has the automatic stay which immediately stops any creditor from trying to get a judgment, and voids or discharges most pre-bankruptcy judgments.
FREEDOM DEBT RELIEF DECEIVED CUSTOMERS
Freedom Debt Relief deceived customers about the scope of their services.
According to the Complaint, Freedom Debt Relief was telling clients that they will deal with all of the debts, but in reality knew that there were certain creditors that would never work with them.
In bankruptcy, creditors don’t have a choice of whether to accept the outcome or not.
FREEDOM DEBT RELIEF WAS NOT TOTALLY HONEST
Freedom wasn’t totally honest about how their fees worked. In debt settlement, the company takes as a fee a portion of any money that they get the creditors to forgive.
The complaint alleges that Freedom was taking fees for other reasons also, such as when the collector voluntarily gives up on collecting the debt.
At the Law Offices of Jason P. Provinzano, LLC (JPPLAW), we charge an affordable flat fee. We tell you exactly how much it costs when we first meet, and we see the case through to a successful discharge without nickel and diming our clients.
FREEDOM DEBT RELIEF DIDN’T TELL CUSTOMERS ABOUT THE RIGHT TO A REFUND
Freedom Debt Relief didn’t tell customers about the right to a refund. Debt settlement works by having the client pay some money every month to the settlement company. The settlement company sets that money aside and then tries to settle the debts one at a time by offering a lump sum to the creditors. If the customer wants to terminate / cancel services, then the settlement company is supposed to give back whatever hasn’t been spent yet. Apparently Freedom Debt Relief wasn’t refunding this money.
I work with lots of people who tried debt settlement and found that it took too long and costed too much. These settlement companies prey on people who feel as if they are at the end of the rope. They sell debt relief as if it is a sound solution and a great alternative to bankruptcy. It isn’t!
Chapter 7 Bankruptcy or Chapter 13 Bankruptcy doesn’t require your creditors to agree on how much money they get, and can be done in a matter of months instead of years.
Don’t be left in the woods by a Debt Settlement Company. Please contact me at your earliest convenience to learn the truth about bankruptcy. We can help!