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Mike Bryant
Mike Bryant
Attorney • (800) 770-7008

In Debt? Don’t Make It Worse With A Debt Settlement Scam

6 comments

There are so many people in debt. At the same time, there are new companies popping up all the time to "help you get through that debt". I’ve always wondered as I hear the radio commercials how they actually work. Reading a story from the Minnesota Independent, it sounds like not very well.

The story starts with the typical debt story. A person injured who falls behind. This one thought he was getting out of it. But what did he find out:

Each month, Gustafson paid $519 of his Social Security stipend to the company, the name of which he prefers not appear in print. When unexpected medical expenses made even those payments more difficult, he contacted financial counselors at non-profit Lutheran Social Services (LSS) of Minnesota. That’s when Gustafson discovered that, despite the monthly payments he’d been making for almost a year, the debt settlement company hadn’t given a dime to his creditors. Almost three-quarters of his monthly payments to the company were being eaten up by fees, with the small remainder being deposited in an account the company said they were only planning use to negotiate a settlement to his debts after 22 months.

A local consumer credit lawyer, Anne Hansen, picked up on the story and provided some great advice:

What can you do about it? Three things:

  • Write to your favorite radio and TV stations, and ask them to STOP running ads from debt settlement companies. Media outlets that report on consumers who are ripped off by these shady outfits should NOT be profiting from those same scams by accepting their advertising dollars. If your local station(s) hear from enough consumers, maybe they’ll start listening and taking more responsibility for the ads they air.
  • Check with the MN Dept. of Commerce before signing up with any entity that promises to fix your finances. Better yet, stick with LSS. They’re a legit non-profit with certified financial counselors who actually give a darn about helping consumers.
  • If you’ve been conned, call a consumer rights lawyer or file a complaint with the Minnesota Attorney General’s Office.

Hopefully, more people will hear about what is going on before they get caught up in this mess.

6 Comments

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  1. Mike Bryant says:
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    Hope so, people need to know about this. Thanks for reading and commenting.

  2. up arrow

    it is good to speak with a reputable bankruptcy lawyer to discuss debt settlement options.

  3. Mike Bryant says:
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    I appreciate you stopping buy and agree that getting the correct legal advice is very important.

  4. Anonymous says:
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    It may also be a good option to explore alternatives to bankruptcy and debt settlement by seeing what it would take to make yourself judgment proof.

    Judgment proof is when you have no reasonable way for a Judgment creditor to collect on a judgment because all your assets or wages are protected and/or are exempt.

    Once you are judgment proof creditors can sit around and cry all they want and still collect nothing. After enough time has expired you can offer your creditor pennies on the dollar. Eventually the creditors would decide that it is better to take the pennies then to sit uncollected for years to come.

  5. Mike Bryant says:
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    It’s true that people should always look at all of their options. I think with the recent U S Court decision there are certain things that lawyers can advise people to do. Thanks for taking the time to read and comment.