Debtors Can Protect Themselves With Debt Settlement Companies & Fraud Debt Relief Programs

A news account by reporter Pamela Yip of Dallas Morning News of June 23rd 2009, reported that the Debt Relief USA, Inc. of Addison, Texas, one of the major debt settlement companies in the nation and perhaps the most active advertiser at the time on the radio and online in the current debt solutions business, has just filed for Chapter 11 bankruptcy defense and has ceased operations, raising the issue of protection against debt settlement company and con debt relief programs.

Many debtors who were the company’s clients, have some money deposits pending with the company, and are likely to lose some, perhaps even all, of those deposits in the process of the bankruptcy, not to speak of the loss of some additional time that it would now take them in repaying their creditors the debt.

In its court filing with the Bankruptcy Court, the Dallas company, listing $4.65 in assets and $5 million in liabilities, said it is a target in several investigations by state attorneys generals and federal authorities.

Thus, this latest saga underscores, once again, the enduring and increasing danger and grave risks to American consumers who fail to become, rather very quickly, properly and adequately educated and informed about the quality and reliability of the debt settlement company they deal with in their debt resolution programs, or should even ever deal with, in the first place – a grave financial issue of how to avoid becoming a scam victim in the current American economic times that is the subject matter of a recent major comprehensive investigation conducted by a major New York-based online review organization.


The fundamental problem is that there has emerged especially in recent times during these very trying economic times, many corrupt, scam debt relief companies in the debt settlement industry which prey upon consumers who increasingly find themselves unable to keep up with their credit card payments, often offering them false and unrealistic hopes, charging monstrous frees, and leaving them in a shoddier financial condition than they were before they went to the company. Consumers therefore need to protect against such unscrupulous companies. Such unscrupulous, fraud debt settlement programs and companies would often offer debtors, for example, debt settlement plans that are deceptive regarding the nature of the services they offer, such as falsely representing to them that they can reduce consumers’ credit card debt by as much as 75% just by negotiating with their creditors, when, in fact, 債務重組 such company has never had any experience in its past of achieving such a level of deal.

Indeed, as reported by this writer in a previous article in this medium, in response to this emerging credit plague in the nation, we’ve seen in recent months a spate of regulators and legal authorities in several jurisdictions across the country signal official concern and alarm that a growing number of companies which operate in the debt cures business today are essentially scam debt relief operations that are out to sucker an overburdened debt-ridden population in a bad American economy.

Only recently, for example, in early May 2009, State Attorney General Andrew M. Cuomo of New York, in kicking off a nationwide investigation into the debt settlement industry, subpoenaed some 14 debt settlement companies from across the country, and one law firm, as he announced that while “today millions of hardworking Americans are finding themselves imprisoned by debt, in response a rogue industry has stepped in offering consumers false hope and charging tremendous fees,” often making the financial condition of such consumers worse, he asserted, than they were before they went to the companies. Cuomo’s subpoenas, which revealed by its nature a broad investigation of the industry, include requests that are clearly designed to uncover the fee structures of the companies, the ways, if any, in which the customers might have benefited from their services, and what kind of debt relief the companies are actually providing their customers.


Certainly, not all debt relief or settlement companies are bad or deceitful. In deed, there are many companies in the industry that are very good and maintain the highest ethical standards, and high degree of professionalism and reliability in their services to customers. However, the point is that there abound in the industry today, many unscrupulous companies and individuals, by far more in number by the above-stated recent major study, that attempt to take undue advantage of debtors who are experiencing personal financial difficulties particularly during these trying economic times.



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