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Debt Settlement America, TASC, and Chris Kesterson, What’s That All About?

Thanks to one of this sites readers who sent me a tip to tips@GetOutOfDebt.org I was told about a festive holiday press release from Debt Settlement America that was sent out.

December 24, 2009 – Debt Settlement America (DSA) has offered a special gift to three families this holiday season by allowing them temporary deferments. A deferment means that the client will be able to skip their regularly scheduled fee payments for one to three months, essentially allowing them to receive DSA’s services for free during that time. Debt Settlement America has given out one, two, or three month deferments for these clients as a part of the company’s efforts to assist as many people as possible in as many ways as possible.

How disingenuous is it for Chris Kesterson the president of The Association of Settlement Companies (TASC) and the CEO of Debt Settlement America to be proud and boastful about postponing the service fee he charges these three struggling clients. Now pay attention, the DSA monthly service fee wasn’t waived, just deferred to some point into the future.

So let’s look to see which clients won this lucky honor.

One client of DSA’s who has gone through a particularly rough year has three children, two of which suffer from disabilities. This client’s 11-year-old daughter and 9-month-old daughter both require special care and attention, which cause the family to spend large chunks of time and money in doctor’s visits and bills. Because this client is unemployed herself, her husband, a trucker, works extra hours to ensure that the family is provided for and that the medical bills are covered. Due to his long work hours and lengthy travels, he has only seen their nine-month-old daughter twice since she was born. Even through these hardships this family still manages to save money, and has settled two-thirds of their debt so far. Debt Settlement America has gifted this southern family a one-month deferment so that this father can be at home with his family and his new baby girl for the holidays.

This family doesn’t need a deferment of the DSA service fee for a month, they need bankruptcy. Why is this desperate trucker being forced to stay away from his daughter and slave to pay DSA and save up money for settlements. If he had gone bankrupt those old bills would have been legally addressed and he would be back spending more time with his family.

Financial problems caused one of DSA’s west coast clients to lose her home to foreclosure, which also ended her marriage. Having lost her house and her husband, she was forced to move in with a friend, where she still pays rent. Once separated, her husband stopped helping pay off any of the debt they accumulated while still together. This client is now working to support her two young boys and resolve her debt without much support. Through it all, this client has shown determination to do everything she can to make ends meet and save to pay off her debt, and has already settled one of her accounts. This client continues to show strength to her boys to give them confidence in the future. Debt Settlement America has gifted this client a two-month deferment to help this client catch up and begin the new year on easier footing.

Wow, nice one DSA, you waived the fee on a otherwise homeless mother that is working hard, not to create a safer environment for her and her kids moving forward, but with your help is struggling to put together money to address old debts. You could have paid for her bankruptcy and given her a fresh start, now that would have been a real gift.

As a worker in the home improvement sector, an east coast client of DSA’s saw his pay reduced by $10,000 a year in the last year. Already in debt by that point, this client then moved his family across the country for work. Despite these challenges, this client managed to save and has settled almost half of his debt. The holiday season, however, has proven difficult for his business, and he is now struggling to meet his mortgage payments and to feed his wife and two young daughters. Debt Settlement America has gifted this family a three-month deferment to help this client get back on track financially during the slow months of his work and to allow him to continue providing for his family.

Congratulations DSA, you waived your fee for a few months for a guy that it could be argued you left in the hot seat that lead to this mess. If he had gone bankrupt early on he would have then been able to save money for just such an emergency. Rather than struggling he would have possibly been able to make ends meet. Maybe you could send him back some of his own money he has in his settlement account with you to pay the mortgage?

Chris Kesterson and the workers at Debt Settlement America, if you truly want to help the people in these three examples, please pay for them to go bankrupt, give them a legal fresh start and leave them in a safer place than where they are right now, struggling to save money for your monthly services fees, that you will continue to charge them, and to pay you a big percentage of their debts as a settlement fee. And guess what, all the time they are sitting in your settlement program these good people are left struggling, trying to save money, pay your monthly service fees, while you are leaving these families exposed to lawsuits, wage garnishments, and horrible credit.

Lawsuits, wage garnishments and horrible credit are exactly what Debt Settlement America is giving these people for Christmas this year. Gee DSA, let’s take a look at your own disclosure document and see where even you say these families are left by being stuck in a debt settlement program.

From the Debt Settlement America and TASC Disclosure Document

DSA cannot force the negotiations and cannot force creditors to accept a settlement. DSA does not make regular monthly payments to your creditors. Your creditors may continue collection efforts on delinquent accounts while you are enrolled in a Debt Settlement Program. Such collection efforts can include phone calls and letters to you, charging off the account, sending accounts to collection agencies or attorneys, lawsuits and even garnishments of your wages if a judgment has been obtained. DSA makes no claim that it will be able to stop these collection activities. These activities may continue while DSA is making its best efforts to negotiate your debt.

If you do not make required minimum payments to your creditors you may be breaking the terms of your agreements with them and your actions will probably be reported to consumer reporting agencies as late, delinquent, charged-off or past due balances. Your creditor may also raise the interest rate on your account and impose other penalties. Your account balance may continue to grow as your creditor adds accrued interest, late fees, over limit fees and penalties. Your balance may continue to grow until a settlement is reached with your creditor; and, if negotiations are unsuccessful, you could be called upon to pay the entire balance. After settlement your creditor may comment that the account was “settled for less than the full amount” on your credit report. A Debt Settlement Program may have an adverse effect on your credit report and credit score.

I’ll tell you what I really find ironic is in researching this article I remembered a previous question I had answered “I Am Working With Debt Settlement America But Now I’m Getting Sued By My Creditors. – Bee“. And in that article I urged Bee to make a complaint to TASC about the way she was treated by Debt Settlement America but did not realize at the time that Chris Kesterson, the head of DSA was also the head of TASC. I wonder how far complaints against DSA go at TASC? Hum?

To everyone that works at Debt Settlement America let me offer this, it is just not right to be proud of postponing your service fee that you are going to charge these three struggling families latter. In the spirit of the holidays, the gift should have been something meaningful. It simply appears that you postponed your small monthly fee for your own self-serviing interests. And by the way. How much was the service fee you waived for each family? What are we talking about here, $50?

From the press release it sure appears you are still charging them your 15% of their debt settlement fee, now waving that would have been something to brag about, not this.

Press release source.

Debt Settlement America, TASC, and Chris Kesterson, Whats That All About?
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • http://DamonDay.com/blog Damon Day

    Good stuff Steve. Looks like that tip line is starting to work really well. Seems pretty disingenuous to charge these struggling consumers super high fees (15% of their debt over 18 months) and then run a press release about how they are so pro consumer that they will defer a couple of the payments until later for just 3 of them.

    The other thing I am sure you picked up on based on your analysis, is that simply deferring their fee so that the consumer can spend the money on something they really need is just pushing the settlements out another few months, further increasing the likely hood that they will be sued at some point. Merry Christmas from DSA. Unbelievable!
    .-= Damon Day´s last blog ..TASC – Debt Settlement Lobby or Protector of the People? =-.

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