Debt Adjusters Frequently Violate the Georgia Debt Adjustment Act
In our experience, debt adjusters frequently violate the Debt Adjustment Act in the following ways:
- Charging more than 7.5% of the amount distributed monthly to creditors for debt adjusting services;
- Failing to distribute the consumer’s funds to his creditors within 30 days of receipt of the funds.
You, the consumer, also have the right to file a private legal action against a debt adjustment company that has overcharged you or mishandled your account in violation of the Act’s provisions. Not only is the company obligated to refund all fees, charges or contributions you have paid, but through this action you may seek an additional restitution of $5,000.
If you have done business with a debt adjuster, give us a call today! You may be entitled to recover money for the violation of the Act.
Don’t Fall Victim to Illegal Debt Settlement Companies
Those who’ve been cheated through illegal debt settlement schemes or fraudulent banking and lending practices deserve to be compensated for their losses. Oftentimes, victims find themselves facing a dishonest adversary after the loss comes to light. For the best possible representation when entering a claim against a person, group, or corporation for consumer fraud, choose trusted and experienced Georgia consumer protection lawyer, Jimmy Hurt, at Hurt Stolz, P.C.
Our firm will look after your interests from start to finish by determining fault, presenting supporting evidence, and assessing damages, past and present, as well as future expenses. Consumers have the right to expect debt collectors, debt settlement companies, banks and insurance companies to conduct business within the confines of the law. Whether you have been injured or been the victim of consumer fraud, contact a civil litigator who really cares at Hurt Stolz, P.C.
Lately, Debt Settlement companies have become very prevalent in the debt adjustment industry. These debt settlement companies promote and advertise themselves as an alternative to bankruptcy, a faster way to get out of debt, and a better alternative to traditional debt management plans.
Debt settlement companies will instruct the consumer to stop paying their unsecured creditors, and instead divert that money to the debt settlement company, where the debt settlement company will often collect its fees upfront. As of October 27, 2010, the Federal Trade Commission made the practice of the debt settlement companies collecting their fees upfront illegal, although many of these unscrupulous companies continue to do so.
How the scheme typically operates: Once the consumer signs a contract with the debt settlement company, the debt settlement company instructs the consumer to stop paying his/her credit card bills, and the debt settlement company will begin to debit the consumer’s checking or savings account on a monthly basis. The consumer’s money is held in an account under the control of the debt settlement company. Once there are sufficient funds in the account, the debt settlement company will, supposedly, contact the consumer’s credit card companies and negotiate a lump sum settlement of the credit card debt for some amount less than the full amount owed.
What Debt Settlement Companies Don’t Tell You
What debt settlement companies do not tell the consumer is that when the consumer stops paying his/her credit card bills, the credit card company will often file a debt collection lawsuit against the consumer seeking to collect the amount owed. Alternatively, many times the credit card company will charge off what it considers to be uncollectible, which is then “bundled” with other charged off credit card accounts into “portfolios” which are then sold to junk debt buyers. These junk debt buyers will often file derogatory credit entries on the consumer’s credit reports, make harassing collection calls which frequently violate the Fair Debt Collection Practices Act, and often file debt collection lawsuits against the consumer. In the event that a debt settlement company actually settles a credit card debt for the consumer, the consumer will most likely be issued an Internal Revenue Service (“IRS”) 1099-C, which requires that the consumer report any forgiven debt over $600 as income on his/her federal tax return!
Don’t fall for it! Debt settlement is NOT a viable alternative to bankruptcy, and is in fact ILLEGAL in the State of Georgia.
If you have fallen victim to a debt settlement company, contact Hurt Stolz, P.C. today!