A Consumer Protection Bill With Too Many Unknowns Rejected by the State House Banking Committee

Athens, Georgia Consumer Protection Attorney Jimmy Hurt Speaks to The Atlanta Journal-Constitution Regarding HB 465

The state House banking committee’s decision to reject HB 465, a bill that would have permitted “for-profit” debt settlement companies to operate in our state under rules inconsistent with Georgia Debt Adjustment Act (GDAA) OCGA § 18-5-1 guidelines, was a win for Georgia consumers. In a recent interview with J. Scott Trubey of The Atlanta Journal-Constitution (AJC), our attorney Jimmy Hurt weighed in on the Committee’s decision, setting the record straight on the attempted debt settlement bill.

While debt management companies and their representatives try to establish themselves in Georgia by painting rosy pictures, it’s obvious that all that glitters is seldom gold. Debt settlement companies negotiate with creditors for debt reduction on the debtor’s behalf, in exchange for an agreement called a Debt Management Plan (DMP). The DMP establishes the amount to be repaid (the newly negotiated balance) to the debt settlement company at an agreed upon time period and payments. The debtor then pays into an account that is used to pay off the debt.

Unfortunately, company practices and failure to heed GDAA OCGA § 18-5-1 guidelines sometimes creates problems, including overcharges and/or slow payment to credit card companies. As explained to the AJC reporter, bankruptcy allows a debtor a fresh start whereas the track record of debt settlement companies is less than stellar and doesn’t offer typical bankruptcy protection from collection agencies, lawsuits, or garnishment of wages.

Opponents have long expressed concern over the high fees charged by debt settlement companies, including the “borrower education services” provision, allowing debt reduction companies to charge fees of up to $100. While supporters point to a stipulation that the first payment toward the debt must be completed before any fees are charged, they fail to set a cap on those fees, and since fees on other kinds of debt relief programs were capped in 2003, HB 465 would be at odds with existing law.

Has Your Georgia Debt Settlement Company Left You Worse Off Than When You Started? Contact an Atlanta Debt Adjustment Attorney to Fight Violations of the Georgia Debt Adjustment Act

Atlanta victims of consumer fraud should seek the advice of the debt collection defense attorneys at Hurt, Stolz and Cromwell LLC to be sure of the best and most accurate evaluation of their case. Debt management companies who violate the Georgia Debt Adjustment Act need to be stopped in their tracks so that others are not victimized and companies who are found guilty must refund all fees and charges, including fund contributions and, in some cases, pay restitution of up to $5,000.

We’re not out of the woods yet, though. HB 465 could be presented in the state Senate or, as is commonly done when less-than-popular legislation arises, attached to another piece of legislation.

In the meantime, consumers who have suffered because of mishandling and/or overcharging violations of the GDAA should contact an Atlanta debt adjustment attorney at Hurt, Stolz and Cromwell LLC to discuss whether filing a private legal action against a debt adjustment company is an option.