In an earlier blog I mentioned the New York Times feature about debt settlement companies, in which I was one of several experts quoted by the reporter. In case you didn’t catch the article in the Times, there was one true tale in it that I’d like to share with you.
In Austin, Texas last summer, a woman named Katherine and her husband were struggling to make the minimum monthly payments on their $59,000 in credit card debt. Katherine had seen a TV ad about debt settlement, and she searched online for “Christian debt settlement” (in the belief that a religious-based agency would have high ethics). She contacted a company in Austin, agreeing to let that company take $676 from her bank account for five months, then $416 for the next thirteen months. The company advised her and her husband to stop making all credit card payments and save up $24,000 on their own. In four years, the debt settlement company promised, they would be free and clear of debt.
After half a year of following this advice, the couple was being absolutely bombarded by calls from creditors. When Katherine repeatedly placed calls to the debt settlement company to ask for help, there was never a response. Finally, Katherine called the Better Business Bureau. Their advice: Close your bank account immediately and file a complaint. This case is now in litigation. Need I say more?
As a bankruptcy attorney in Indiana these many years, I’ve seen more than my share of debtor situations, but I was as outraged and horrified as you must be in reading this story. I can’t help feeling that if this couple had received proper advice, they could now be well on their way towards rebuilding their financial lives, instead of being worse off than when they started.
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg