Mark Zuckerberg Cried Wolf Early About Debt Settlement Firms

May 25, 2013 5:55 pm Published by

Now the “wolf” is out of the bag.  The federal government’s Financial Protection Bureau is going after that make matters worse for already unfortunate people.

To those of us in the Zuckerberg bankruptcy law offices, I can tell you, this is welcome news and long overdue.  Think about it: We all know that people who turn to debt settlement firms are already hurting:

  • They’ve fallen behind on mortgage payments and need our help stopping foreclosure.
     
  • They’re being bothered by creditors calling them and home and at work.
     
  • Their wages are already being garnished or they’re afraid that’s going to happen soon.
     
  • They may have lost their jobs.
     
  • Their credit card companies have lowered their credit limits and are charging them late fees.

At this very point of near-desperation, the “wolf”, disguised in the “sheep’s clothing” of a debt settlement firm, promises debt relief.  Two of these very firms, New York-based Mission Settlement Agency and New Jersey-based Premier Consultant Group LLC, have just been criminally charged with taking illegal fees from consumers for debt settlement services, profiting $1.3 million without providing any real help to debtors.

Allow me to review with Bankruptcy in Indiana readers what the problems are with debt settlement and debt consolidation in general:

  • Consumers are asked to make monthly payments into a special account, and to stop making payments to their credit card companies.
     
  • Upfront fees are deducted from the account, often as high as 20% of the amount owed.
     
  • Meanwhile, since the credit card companies have made no promise to settle with anyone, the late fees accumulate. The creditors can sue, even garnish wages.
     
  • The “debt repayment plan” is a big negative on the credit report, often bigger than filing individual bankruptcy!

“Consumers deserve better,” said Director Richard Cordray of the Consumer Financial Protection Bureau” on May 7 of this year.

As a debt consolidation lawyer offering Indiana bankruptcy services, (and who’s been disturbed about debt settlement companies for more than twenty six years, well – I couldn’t have said it better myself!
 

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This post was written by Mark Zuckerberg

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