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My Debt Relief Company Did Nothing But Get Me Sued and Lower My Credit Score. – John

“Dear Michael,

had 730 credit score 1 year ago now about 550

now being sued

considering chapter 7 as only option

1. How do I know whether or not my settlement company fulfilled their contractual obligations to me or not? – They said they offered settlements to my cc companies that were refused. Based upon that can I compel them to produce these documents? I am being sued by one such company and feel that this would be a good example of a “good faith” effort to pay.

2. By leaving them before my contract is up, am I technically in breach and can I be sued by them for breach?

3. They promised me a percentage that I will pay NO more than, of my initial credit card balance and then stated that I may be sued by said cc companies. This seems like an oxymoron since a lawsuit leaves my creditor no interest in settling if they sue for the full balance?

4. They use a third party escrow account through an FDIC corporation. Does this disqualify them as a “cash handling” settlement company as determined for the California licensing requirement?

5. They initially stated that this process would take 12-36 months to complete. I have been on it for a year and the only action that I have scene is a decline in my credit score by 200 points and a civil action by a cc company. Do I have any grounds for a civil action upon them for non-performance of contractual obligations and damages for my credit score deterioration, current law suit, and probable bankruptsy? My cards were all current before I followed their advise…

John”

Hi John,

You are asking questions that are better answered by an attorney regarding breach of contract, contract performance, fiduciary duty of a money transferor etc.

I would encourage you to speak with an attorney to get specific answers.

Generally speaking, you hooked up with a company whose representations you relied upon, and while they may have disclosed certain risks, the pitch was likely made in a way that gave you confidence in proceeding with the company and service.

The plan went off the rails when you got sued and you now may need to file bankruptcy.

Many people have had success following the debt relief company refund guideline found here. If you start the refund process be sure to go at it in chronology and follow through with each and every part.

If you do not succeed in the refund and do file bankruptcy, be aware that many trustees are aggressively going after a return of the monies paid to debt relief companies in their official capacity with the courts.

Are you in California? If so, I may be able to make another suggestion regarding keeping the settlement course you started. I would also have some follow up questions if you were interested in doing so:

What banks are the credit cards with?
What are the balances on each?
Who are the accounts with now (which collectors, attorney’s)
What amount of funds do you have now and in the near future in order to fund settlements?

If you answer these questions in the comments below, I will be able to comment better.

My Debt Relief Company Did Nothing But Get Me Sued and Lower My Credit Score.   JohnMichael Bovee has worked with financially challenged consumers for the past 17 years and is a recognized expert in his field. Michael founded Consumer Recovery Network (CRN) in 2006. CRN offers debt settlement services and educational resources nationwide. He has served as its president since 2006.

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About Michael Bovee

Michael Bovee
  • Jonathanharstad

    If you had a 730 credit score, you had many other options available to you. You should have never been enrolled to begin with. a 730 means you likely had no lates, and were at minimum, making minimum payments. With that, you can only tread water so long, but you were still doing it. The true offense was the company enrolling you to begin with, without a bona fide analysis of your detailed situation. Not some BS five-line-budget sheet to convince you their service is what you needed. you got sold on a service you should have never considered at that stage.

  • Seattle Credit Repair

    Wow, this is horrible. Luckily the laws are changing. I like to focus ONLY on improving credit scores, I feel like if your credit score drops, it’s probably the bad choice.

  • Seattle Credit Repair

    Wow, this is horrible. Luckily the laws are changing. I like to focus ONLY on improving credit scores, I feel like if your credit score drops, it’s probably the bad choice. 

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