Debt Settlement Company Gone Bad

As the saying goes, if it sounds too good to be true, it probably is. Here’s the latest example of a debt settlement company gone bad! JK Harris, a tax-debt resolution firm aims to sell business and write off debt.

The JK Harris company once advertised that it could resolve people’s tax debts for “pennies on the dollar,” but now it could be the company’s creditors and disgruntled former clients who will get less than they are owed. JK Harris & Co. plans to seek bankruptcy protection in Charleston to head off an attempt by the Texas attorney general’s office to force the company into receivership, said company founder John K. Harris. The company, a national tax-debt-resolution service based in Goose Creek, has been dogged by cash-flow problems and the cost of large settlements related to claims that it misled consumers. The bankruptcy filing is aimed at selling the business quickly while writing off debt. The company would continue operations in the meantime.

Consumers who were to get millions of dollars in compensation from previously agreed-upon settlements, from a class-action suit and from complaints by multiple attorneys general, could receive dimes on the dollar, as could JK Harris’ creditors. About 30 employees of the company who were laid off last week also are owed wages.
The Texas attorney general’s office is involved because it agreed to accept a $1.2 million settlement from JK Harris to resolve claims that the company misled consumers and took money from customers ineligible for relief from the IRS.