Anyone who is in deep debt could be especially vulnerable, which is one reason why they may seek aid at the end of his or her wits. Most of the time it is debt adjusters who answer and provide assistance.
It would be nice to say debt adjusters were always honest, but that is not always the case. Some of the companies do not pay on time and violate the Debt Adjustment Act that says creditors must be paid within 30 days after receiving the money.
Of course, the consumer now has the right and should definitely pursue legal action against the debt adjuster for blatant violation of the Act.
The company may be forced to return all fees that you ended up paying or charges that resulted from their negligence. The violation itself could also award you a restitution, which could be as high as $5,000, and that is a helpful amount no matter what.
How Debt Collecting Companies Lure Customers In?
The debt adjustment industry is growing dramatically, which is making room for illegal debt settlement companies. It is no secret that many Americans are suffering and looking for solutions, which is what these companies take advantage of.
Most people who are having trouble paying their debts often consider bankruptcy as an option. However because of many misconceptions of bankruptcy, debt collecting agencies can play upon that fear. Debt adjusters often times advertise themselves as an alternative solution, claiming that they could clean up your credit in a short period of time.
Debt settlement companies have been know to tell clients to stop paying all unsecured creditors. The client is then told to send all the money owed to debtors to the debt settlement company itself. The fees for the company’s services are collected upfront before any debtors are paid.
Most of the unscrupulous actions taken by debt settlement companies were declared illegal by the Federal Trade Commission since October 27 back in 2010. This was probably done because many of these solutions are riddled with discrepancies that are withheld from the client.
The Part that is Withheld From You
What makes debt settlement companies potentially bad for you is that working with them does not guarantee that the credit cards companies that you owe money to won’t file a debt collection lawsuit to get their money from you.
Some credit card companies do not go after you and decide to bundle up all the money you owe into a portfolio that is labeled uncollectable. This does not mean your debt is gone. In fact, sometimes, it is sold off to junk debt buyers for a fraction of what is owed. These junk debt buyers are a shady bunch who make it their business to collect what is owed. They do this by filing derogatory credit entries against you or by making harassing calls to you. These calls are so bad that they usually violate the Fair Debt Collection Practices Act.
Of course, it is possible that the debt settlement company you hired ends up paying off your bills, but this also means you may be issued an IRS 1099-C. Consumers have to report any debt that has been forgiven if that debt exceeds $600, which may end up hurting you.
Furthermore, at least in the state of Georgia, these debt settlement companies have been made illegal. So, the first lie they are telling you is that they are still a viable option in this state. Those who have fallen victim to these companies should consider fighting with your Marietta Debt Relief attorney at Cherney Law Firm. Do not fret, the free consultation offered comes with no strings attached.