Chicago Bankruptcy Lawyers & Attorneys

With this bad economy, there are hundreds of thousands of consumers looking for “debt settlement” companies to consolidate their debt.  The number of debt settlement companies has tripled in the last few years to 2,000.  Most of them seem to be little or no help to consumers. 

There was a couple that lived in West Virginia and needed help paying their debt.  They had about $25,000 in credit card debt and looked for help on the internet.  They found Credit Solutions of America.  Credit Solutions of America took almost $4,000 of their money and they are now more in debt than before.  The debt settlement companies are supposed to help the consumer and the creditor.  They should be negotiating with the creditor so the consumer can start to pay off their debt.  However, the creditors are not too happy because they sometimes have to settle for 40 cents on the dollar or less or receive nothing.  Also, the consumer ends up paying about 15% of their total debt to the debt settlement company and they do little or nothing for them.  The consumer ends up incurring a lot more debt because they are to stop making minimum payments, and since the debt settlement company doesn’t do anything, the credit card companies keep trying to collect.  Their fees and interest charges don’t stop and they could file a lawsuit.  There has been an increase in complaints to the state attorneys general’s office.  In some states, the complaints have doubled, tripled, and even quadrupled since 2006.  The couple in West Virginia finally received a full refund from Credit Solutions of America after inquiries from The New York Times.  But, now one of their credit cards went from $8,000 to $18,000.