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Trapped in a Debt Settlement Contract. What to Do? – Dean

“I contracted a debt settlement company now that it changed. I signed with them back in May of 2010, this was before the new law changed for settlement companies not to be able to charge up front for settlements.

The contract is crazy, and I was stupid to sign it. I was totally delusional from stress and depression when I did sign it. It was nothing like the verbal sales pitch I got.

Even when the company makes a settlement for me they don’t see it through in a timly manner. Four have been made and so far none have been paid even though there is mopney to pay them.

They come up with numerous excuses to put off even paying the ones that are settled out of my global account set up by myself and the company. again the money is avaliable to pay the accounts.

The only reason in my opinion to delay is to keep getting monthly draws from me to make sure I stay I the program. I am afraid to do the ” How to get out of the debt relief program and get a big refund,” Because I have over $13,000.00 invested in the deal already.

At the risk of feeling totally stupid, I will tell you that the contract says that they can terminate at any time withut recourse and so can I. the problem is i will loose everything in put in. Now that is stupid on my part. I feel trapped because I am settling the accounts myself, and sending them the paper work to do the draft, and they tell me not to do that because it messes up the flow. What flow? The account is settled so just pay it!!!! The money is there?

So again be careful of the way these settelments contracts work. Read them good and have somebody who is sane to read them with you. Document everything. Most of them so far as I can see are set up to keep you in the program and drain you for all the money they can get, and not give service to match. I don’t know what to do. I actually hate this company now when at first I believed they would help me.

Is there any recourse. Am I basically trapped, or can I get a rtefund or get a re-write of the contract to be funded by progression of payments and settlements being made? Can I even get a copy of the new contract that them MIGHT have to use now after the change came in october of 2010.

Dean”

Hi Dean,

Who is the company that you signed on with for debt settlement?

You refer to the 13k you have already invested into the process. Is that 13k total inclusive of advance fees you have been paying as well as what remains in your escrow account? Who is you escrow account set up through?

If you are sending letters of settlement to the debt settlement company and they are not being funded with available escrow funds, I believe you have legitimate concerns. A vague excuse like “upsetting the flow” does not hold water. The opposite is that by not accepting and funding fair offers your program “flows” to being sued for the unpaid debts.

You requesting a refund may/may not fall on deaf ears. It is certainly something you should explore, but I would encourage you to answer my questions in the comment section below before doing so. Your answers may provide details that would suggest a different course.

Additional questions:

Who are the creditors you could have settled with that you refer to?

What were the offered savings?

What amount do you currently have available in escrow?

Just post your answers in the comments below. I look forward to commenting more once I have more detail.

Michael

Trapped in a Debt Settlement Contract. What to Do?   DeanMichael Bovee is an experienced debt expert who helps answer questions on the GetOutOfDebt.org site. He specializes in helping people with debt settlement through education and assistance. He can be reached at the Consumer Recovery Network.

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  • Jonathanharstad

    Bottom line, 13k i a lot of money and you can likely negotiate on your own. Trust me.  And it is easy for you to fight back. There is a company that can help. I will find their information and post back on monday or tuesday when i am back in town. They will be able to help you try to get your money back, and they know their stuff.

  • Jlatinapr2003

    Thinking I made a smart decision  over a 2 years ago I signed up with mesa rock financial services on a program that would get me out of debt in 3 years. They stated i was to stop paying my credit card bills and not talk to anyone calling me in regard to these bills. Every month they took the fee out of my personal checking account that was supposed to be for multiple purposes like paying my bills & negotiating settlements. Of course that never happened.   Well in 1 year they took me from a bad situation to something 10 times worse. None of my bills had been paid, I was being sued by 1 of the credit card companies, my home has a lien on it due to not paying the credit card account and a judgement that I was supposed to go to court for and never knew it was there.I must go on…   I e-mailed and requested cancellation of my account immediately with a full refund of all moneys that had been sent to to consolidate my cdebt. Well, they never called me. So  emailed and emailed and email and caled and called and no answer. I finally got a call from MR lepely which is a made up name to cover their ass who flippin out on me when i told him that he was to return all my money 5021.00 for a year of fees to provide a servcie I never recieved.  All of the sudden got all this personal attention  since expaliend that I was the wrong one to mess with. I ADVICE  YOU ALL THAT call AUSTIN OR HUSTON ATTORney GENERALS OFFICE AND THE BETTER BUINESS BUEARU FILE A COMPLAINT ATTACH ALL SUPORTING DOCUMENT. IF YOU LIVE OUT SIDE OF THE STATE OF TEXAS CALL YOUR LOCAL ATTORNEY GENERAL . THE MORE COMPALINTS THEY GET ABOUT
    what to do?

    • Jonathanharstad

      You give good advice. unfortunately, not everyone has the time to fight back with these companies, especially when they just lost “X” amont of money to a scam that was supposed to help them. As replied above, there is a company that can help you get your money back from these crooks. I will post it monday or tuesday when i am back in town. I dont have their info off hand.

  • Michael

    Being enrolled in what was the typical front loaded fee debt settlement plan is creating the same issue for you as it has for many. Your money goes to fees before it goes to your creditors.

    You now know you can settle with your creditors on your own rather than relying on what has been thus far a less than reliable process through now 2 service providers. The additional information you provided does not point to any value having been received by either company at this point. In fact, the information so far shows more of an obstacle than a benefit.

    If you are unsatisfied with how things have progressed I would recommend you initiate the refund process outlined here: http://getoutofdebt.org/20126/

    While the contract may leave the impression that you have no recourse when asking to be refunded, that may not be the reality once you implement the strategies outlined in the above link.

    Do you have access to resources other than the funds held in escrow with GCS that you can use to fund settlements? If you do, you should look to be as aggressive as possible in getting settlement deals completed quickly. Being a year from having last paid puts you at greater risk of being sued in order to collect from you.

    You can get most, if not all of these settlements done on your own. If you want help and tips along the way, start specific questions in the forum section of this site: http://getoutofdebt.org/forum
    I would encourage you to start individual threads for each creditor or collector you are dealing with in order to keep the issues organized.

    If run into trouble with your own efforts or you would prefer working with a pro I would encourage you to contact any of the performance based fee companies who are members of the AACC found here: http://newaacc.org/

    If you have additional questions or concerns post more comments here or on the forum. There are many good professionals here that will be able to assist you.

  • Deanfish

    The settlement company was named progressive debt settlement , then changed over to Sizemore law.www.sizemorelaw.net. the account is with Global solutions. I have a ID and password and check the account. The problem is that sizemore keeps $1303.35 for the first 6 months, then $912.00 for 12 months. suppose to equal 12% of the total amount being settled. The monthly deposit is for $1518.00 per month. I only keep about 500.00 but i was somehow not aware of the stuff i signed. They can cancell at any time and so can I but i will loose it all, and tey loose nothing. I will send you a copy of the contract. The way they do it is to keep the client in the contract as long as they can so they can get all their money. I made them settle 4 accounts this week and they tried to put it off. I settled one with Wells Fargo, One with Chase, Two with American express. My total debt for them to settle is $154,000.00. They draft my persona;l account as the need comes along to settel one. After 11 months i only have $5400.00 for settlement purposes, and the rest they took as paymnent up front.I have one more from wells fargo fo $70,000.00, one more from chase for $11,000.00 and one more for discover For $22,000.00. I also have another $100,000.00 to settle that nobody has a contract on. I am working with wells fargo on that myself.

    Dean

  • Deanfish

    The settlement company was named progressive debt settlement , then changed over to Sizemore law.www.sizemorelaw.net. the account is with Global solutions. I have a ID and password and check the account. The problem is that sizemore keeps $1303.35 for the first 6 months, then $912.00 for 12 months. suppose to equal 12% of the total amount being settled. The monthly deposit is for $1518.00 per month. I only keep about 500.00 but i was somehow not aware of the stuff i signed. They can cancell at any time and so can I but i will loose it all, and tey loose nothing. I will send you a copy of the contract. The way they do it is to keep the client in the contract as long as they can so they can get all their money. I made them settle 4 accounts this week and they tried to put it off. I settled one with Wells Fargo, One with Chase, Two with American express. My total debt for them to settle is $154,000.00. They draft my persona;l account as the need comes along to settel one. After 11 months i only have $5400.00 for settlement purposes, and the rest they took as paymnent up front.I have one more from wells fargo fo $70,000.00, one more from chase for $11,000.00 and one more for discover For $22,000.00. I also have another $100,000.00 to settle that nobody has a contract on. I am working with wells fargo on that myself.

    Dean

    • Michael

      Being enrolled in what was the typical front loaded fee debt settlement plan is creating the same issue for you as it has for many. Your money goes to fees before it goes to your creditors.

      You now know you can settle with your creditors on your own rather than relying on what has been thus far a less than reliable process through now 2 service providers. The additional information you provided does not point to any value having been received by either company at this point. In fact, the information so far shows more of an obstacle than a benefit.

      If you are unsatisfied with how things have progressed I would recommend you initiate the refund process outlined here: http://getoutofdebt.org/20126/how-to-get-out-of-a-debt-settlement-program-and-get-a-big-refund

      While the contract may leave the impression that you have no recourse when asking to be refunded, that may not be the reality once you implement the strategies outlined in the above link.

      Do you have access to resources other than the funds held in escrow with GCS that you can use to fund settlements? If you do, you should look to be as aggressive as possible in getting settlement deals completed quickly. Being a year from having last paid puts you at greater risk of being sued in order to collect from you.

      You can get most, if not all of these settlements done on your own. If you want help and tips along the way, start specific questions in the forum section of this site: http://getoutofdebt.org/forum
      I would encourage you to start individual threads for each creditor or collector you are dealing with in order to keep the issues organized.

      If run into trouble with your own efforts or you would prefer working with a pro I would encourage you to contact any of the performance based fee companies who are members of the AACC found here: http://newaacc.org/

      If you have additional questions or concerns post more comments here or on the forum. There are many good professionals here that will be able to assist you.

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