(Ruth from Maryland) I signed up with a debt settlement company in Jan 2009. I have settled 90% of my debt myself and want to get back my $11,000 from the company.Do I have any legal recourse? I am 65 years old and this is the first time this has happened in my family.
Dear Ruth:
Unfortunately, you will lose any portion of the payments that you sent in to your debt settlement company that they claim are fees for services already rendered. They have a legal right to keep any payment if they can show that they already acted on your behalf.
We know that they probably did almost nothing for you other than provide a glorified savings account for $39 a month. You have undoubtedly discovered that the claims of debt settlement companies are in fact, too good to be true.
You are certainly entitled to any portion of your payments that is held in trust. That is your money and they have no rights to it. You would need to quickly submit a refund request in writing so that you can get whatever you can.
Since the debt settlement company did almost nothing on your behalf (as is normally the case), you should consider pushing for a larger refund. Explain that they have done nothing for you and you want your money back.
With a reputable business, you can threaten to file a complaint with the Better Business Bureau if they do not respond in a responsible manner. However, your debt settlement company likely already has dozens of complaints and an “F” rating with the BBB. One more complaint will help you, but it will be a mere drop in the bucket with the BBB.
One step you can take that tends to be more effective is to file a formal complaint with the Maryland Attorney General. If you and twenty other Maryland residents complain about the same company, it tends to draw enough attention to the company to force some sort of action.
I hope you are able to recoup most of your money. Be thankful that you have been able to resolve most of your debt. I hope that more people that find themselves in a situation that you were once in will seek help from a reputable credit counseling agency rather than debt settlement companies that peddle snake oil!
Tags: getting debt settlement refund
Hi,
Could you tell me what I can do if I just signed with a Debt Settlement company before I realized what I did? They have already deducted the first payment from my account. Second payment would be 1/5/2010.
Thanks, Archie
Dear Archie:
You should examine your contract to determine what the steps are for termination. Specifically, you will want to know:
How much advance notice do they need (ie. 3 business days)?
How do I have to notify them (in writing, via fax, by certified mail)?
What termination fees are in my contract (usually around $300)?
If your accounts are still with the original creditors, I strongly encourage you to contact a reputable credit counseling organization to see what can be done to fix the damage.
I joined a debt settlement company in August 2009, I have paid close to $4000.00 to them which $500.00 is in a trust account, I make a big mistake by joining them, they did nothing for me, and now I’m being sued by creditors, although I cancelled my contract with them, but I only got back $500.00 of my money, it is really a rip off, DO NOT JOIN DEBT SETTLEMENT PROGRAM, SETTLE IT YOURSELF!!!!