We came across this Reuters headline discussing a debt settlement company that was referred to federal prosecutors by the Consumer Financial Protection Bureau (CFPB) pleading guilty to multiple charges, including wire fraud.
Mission Settlement Agency scammed more than 1,200 people across the country from 2009-2013. The CFPB, created by the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, referred the company to a U.S. Attorney’s Office.
The debt settlement company claimed it could help customers reduce credit cards and other debts. However, the company instead charged high fees and failed to help its clients. The operators of the debt settlement company have agreed to forfeit $2.2 million dollars as a part of the guilty plea and the debt settlement company faces an addition fine of up to $4.39 million dollars.
The take away from this is that there are lots of so called debt settlement and debt consolidation companies that have sprang up as a result of the Great Recession, and many are not interested in helping their victims. They just want their money.
Creditors such as credit card companies have very little incentive to work with debt settlement companies that contact them on behalf of a debtor. Even if an agreement is made, this may not prevent them from continuing to make harassing collection calls, file lawsuits, and garnish wages.
Bankruptcy, on the other hand, has the power and force of federal law. Debt collectors have no choice but to act within the bankruptcy process. When a Chapter 7 or Chapter 13 bankruptcy is filed, an automatic stay immediately bars any creditors from initiating, continuing or pursuing any collection actions without first seeking relief or approval from the bankruptcy court.
If you are facing mounting debts, harassing phone calls, debt collection letters, lawsuits or even wage garnishments in Kansas or Missouri, give The Sader Law Firm a call and speak with one of our experienced bankruptcy attorneys. We offer a free phone consultation and would be happy to discuss your bankruptcy options with you based on your specific situation.