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Is Mathys Law Group Safe to Work With for Debt Settlement? – Mary

“Dear Steve,

I have a total of 4 credit cards and I have fallen behind on one with a large $40,000 balance. After consulting with a credit counseling company, and taking down all the numbers for daily expenses, I was $1400 in the negative at the end of the month.

I told them I have had health problems, haven’t made any money in the last year, my husband is the only income provider and he has had hours cut back. The monthly payment this card company wants me to pay is $1000 with $450 going to interest. I called them to reduce my monthly payments or rate and they denied.

I have spoken with a debt settlement company, Mathy’s Law Group in Woodland Hills, CA. They have asked me to open an escrow fund account under my name to accumulate the funds necessary for negotiations. I have been receiving calls from the credit card company and this makes me uncomfortable having 2 kids in the house.

We have some savings money and considering to use it for this settlement. We also have a paid off car worth about $7000 that 2 people use in the household. I have always been responsible and this is all new to me. Will they negotiate? How do I know that this debt settlement co. is safe to put funds into the trust fund?

Mary”

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The Answer

Dear Mary,

Hopefully the law group has asked you to deposit your funds with a third party escrow company like Global Client Solutions or Meracord. These companies have been doing this for a long time. But while the funds you deposit with those companies is your money and under your control you need to evaluate the agreement you signed with the law firm.

Many law firms claim an exemption from the FTC rules that prevent advanced fees being taken for debt settlement services before the debts are settled. If the law firm you are working with is going to take their fees in advance that can put you further behind without any debts settled.

Debt settlement is best suited for people that have funds on hand to settle now or in the next few months. Some people sell assets to fund these settlements. If you have to stop paying your creditors to accumulate money you will certainly wind up in collections and risk being sued and having wages garnished.

Let’s start with the basics.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

After that, come back here and comment about what seems to make the most sense and let’s discuss that.

Does that sound like a reasonable approach?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

Is Mathys Law Group Safe to Work With for Debt Settlement?   Mary
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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.
  • James L

    Does anyone realize that Robert works for the Mathys Law Group? What a shameless and blatant way to self advertise.

  • MJ

    I guess this is an “I told you so” moment. NO one from Mathys Law Group has returned my calls or emails in over 6 weeks. They were good about it before I joined and have since abandoned good customer service. The number I called frequently only repeats a fast busy signal. Are they in or out of business these days? 

    • B

      They are definitely in business! Think about it..if any other company says “we can pay off your debt..but..in one lump sum”, you in!? I didnt think so! Mathys Law group is amazing, all these people that are talking nonsense probably missed payments or possibly went into bad standings…
      BTW You shoulda got multiple numbers…have you not gone on the website?!?!

  • Gideon

    How come the only complaints about the Mathys Law Group are coming from people who chose not to enroll in their program?

    • Guest

      Maybe they were smart enough to stay away. I also got a letter and they tried to pressure me into enrolling and paying their 29% fees and early termination fee if I decide to withdraw.

      • Mary

        I have been 6 months late with my bank and started negotiating 2 months ago.  Let me tell you, it is not a big deal.  They just want to hear from you, don’t hide from them.  Let them know you have difficulty and in a hardship.  First they gave me a settlement price and 1 day after the 6 months late hit, they went down on the settlement to what I had offered them.  They gave me a week to pay it off and I’m so happy.
        So don’t be afraid, if you have a legitimate reason why you can’t pay, they would rather receive some money from you.

      • Trutalent02

        Mary, I completely understand your position. However we are all not as fortunate as you to have money on hand to settle. Some of us live paycheck to paycheck and need time to save money to pay off the debt? What do you suggest for this because unlike you i don’t have money to waste on payment arrangements that keep me in debt.

      • Trutalent02

        One can’t make blanket uninformed, ignorant comments if you haven’t done research.. 

  • guest

    I called them from a mailer. They want 29% of my total debt as a fee (very high from others I have called), another $350 if I am sued by a creditor, and $750 for early termination. They also told me I would NOT be sued even though they charge extra for being sued. Is that right? Can they sue me if I dont pay my bills?

    • Guest

      Sorry I posted this again. I didnt see the response all the way down at the bottom

  • Guest

    I called MLG Mathys Law Group from a letter. They were very vague about their service just saying they negotiate with creditors to reduce my debt and saying fees were between 10-29% and wouldn’t give me any information until I faxed them copies of statements. I sent them the bills so they would talk details.  Being current on bills and not going to fall behind I was concerned about how it would affect credit, costs, legitimacy etc. They stated they had been in business settling debts for 29 years and they would negotiate with my creditors to reduce my debt and they already knew about where the debt would settle – 32%. They never explained that I would fall behind or it would hurt my credit, or I could be sued. The man had me pull up their contract online and tried to rush me through signing everything as he gave a brief description of what each section was about. I stopped him and asked about credit and was told that paying off my cards improves credit. I asked about being sued and he said multiple times “No, I am protected from that”. I pointed out the line in the agreement where it says I can be sued, he again said I was protected from that and if they try to send me papers they would handle it and I don’t have to worry. On page 5 of their agreement it also says I can be sued, he said that page doesn’t apply to me and only applies to medical debts but I am required to sign anyway. Is this accurate? Can I be sued? Is this good for my credit?

    • http://DamonDay.com/ Damon Day

      No the guy is not telling you the truth. You can be sued. You are not protected from that. I would stay far away from this company based on how they are presenting their program. The guy is not telling you the truth about your credit report either. I wouldn’t take any more of his calls.

      • Mike

        I went over their website, not a contract, and it says you can be sued, so I inquired. The person I spoke with was not untruthful about the matter nor dismissive. I too was also concerned about my credit score and learned from MLG that creditors will report a different status while you are paying your account differently. That is the trade off you have to decide is worth for yourself. It takes time to get out of debt and learn the habits not to get back into it again. Unfortunately, when hours are cut, jobs are lost, medical situations arise, those burdens reshape even the best budget-minded folks. Every situation needs to be reviewed by consultants and thank God I found this before jumping into something. It is not a quick fix solution and everyone must weigh their own circumstances. For me, toiling at monthly payments watching my income shrink as kids go to college and life unfolded circumstances beyond my control, I was going nowhere. When I added up what I pay in a year on my debt I was appalled. One account paying 35 a month for 12 months was just about the total balance of the account! So, for me it was worth the risk especially after I worked with the mortgage companies and medical folks already. In three years, my accounts will be closed; they won’t charge until it is settled (something I could not do on my own); I will have no unsecured debt and can put my money back to work for my future. I once learned a man’s word is as good as the paper it is printed on, so read the contract, have a consultant go over it, but the choice is still going to be up to you and you will be held accountable to what you sign on paper. 

      • Trutalent02

        From my experience any time you stop payment to your creditors you can be sued. My question to you is what is the problem with being sued if you have an attorney to answer the summons?

      • Seriously?

        What is the problem with being sued if you have an attorney? Uh you are getting sued, which could lead to a judgment, which could lead to a wage garnishment, levy etc.

      • Trutalent02

        Yea but if you have an attorney that will prevent garnishments, judgement and  levies.. why worry right?  I know if i am paying an attorney to protect my best interest and their contract says they will go to court and fight on my behalf… I don’t have to worry its all good… May be its just me??

      • Seriously?

        Ya, I think it might just be you

        and anyone else naive enough to believe that.

      • http://GetOutOfDebt.org Steve Rhode

        Having an attorney when you have voluntarily decided to stop paying your bills is not an automatic win. 

        And if a debt settlement attorney might be charging you advance fees for services then you’d need to question if your interests are being put forward first.

        But run with that strategy and let us know if it works for if that’s your situation.

      • S D

        Uh Damon?

      • http://DamonDay.com/ Damon Day

        I don’t know what people believe. You call me a competitor, but I don’t offer debt settlement services. People pay me for advice and my opinion. So in that sense if you want to call me a competitor, then fine.

        I have seen the contracts from this program, and in my opinion they are not pro consumer. I don’t think it is a good deal for people who are struggling with debt and in that sense you are right, I wouldn’t advise anyone to do business with this company based on the contracts or the consumer feedback I have received about their sales tactics.

        Of course, that is just my opinion. Consumers are free to call them and listen to their program, do the research and decide what is best for them.

        Can you tell me what I have said that you think is wrong or you disagree with?

  • Robert

    Hello Steve and Mary,
    My name is Robert and I am also in a situation where I am in debt of about 50k.  I was looking for solutions for my lowered income and my inability to pay my debts on a monthly basis.  I contacted The Mathys Law Group and was very concerned and scared to enter into a program like this.  My wife and I actually were in disagreement about moving forward with them and for months we were just continuing to make the minimum payments even though we knew that those payments were all going to interest only.  After being frustrated with this situation for 3 to 4 months we decided to call them back and get more information.  We decided that we were going to “roll the dice” because our situation was getting worse ever month that went by.  We have been in the program with Mathys Law Group for the past 9 months and they have settled 2 of my accounts now.  When I call their office, they are always available to speak with me and the works seems to be working so far.  I will definitely keep you all posted as to the results that they achieve for me, but so far so good.  Last comment i have is that the agreement i entered into with them is performance based and they dont charge any money until after the debt is settled.  Steve, if this company does not charge any money until after they settle debt, Are they doing things legally???  Please advise.

    • http://GetOutOfDebt.org Steve Rhode

      There is no substitute for great customer service. It’s so nice to hear they are being responsive to you when you contact them.

      In my book it’s better to charge when the debt is settled. It allow you to get to settling debts quicker.

      I don’t know what their fee is. In general companies are charging anywhere between 15% of the money you saved to 21% of the debt you enroll.

      What are they charging you?

    • Mary

      Hello Steve and Robert,
      I appreciate your replies.  Robert, it’s nice to hear that you got your 2 cards settled.  Were they aggressive with the settlements?  What percentage did you end up paying?
      I told Mathys Law Group that I had the funds and wanted to settle as soon as possible but they kept giving me the spiel on putting money aside every month until the funds were there.  This made me uncomfortable.  I had a referral from a friend that has settled his credit card debts and was successful.  He has asked me for a $750 retainer fee to start the negotiations and depending on how much time he’ll spend on this, it might cost about $2500 total to do it.  I guess this comes to the 15%to 21% that Steve mentioned.
      He’s with SRG Law Group and I can’t wait for this to be over.
       

      • http://DamonDay.com/ Damon Day

        Hey Mary,

        I don’t know anything about the SRG law group specifically but if they are only going to charge 2500 to help you settle 40,000 in debt, that is a good rate compared to most programs. Did you actually get a contract that stated their fees?

      • http://GetOutOfDebt.org Steve Rhode

        I was talking about 15% of savings, not 15% of enrolled debt.

      • Robert

        Hey Mary,
        In regards to the 2 accounts that they did actually settle for me…I saved about 45% (estimate, cause my wife has the exact figures) after paying their fees.  I was pretty happy with the results that occurred on those account.  Additionally, I spoke with my wife about the “Get Out Of Debt Guy” blog on Friday night when i got home from work and we started talking about our program in greater detail and i wanted to let you know more information about what is going on with it.  Obviously, they already settled the 2 accounts and everything is great with those.  Once of our accounts was transferred to a law firm that is representing the actual creditor (Citi Card).  When my wife told me this is got kinda nervous, but then she proceeded to tell me that they responded to the attorney notice IMMEDIATELY, and put the fire out on our behalf that same day.  Overall, I am pretty happy with the service they are offering me and more impotently the results are definitely favorable for our family.  Hopefully they will continue to perform the way they have been up to this point in time.  I can assure you that if they don’t do as promised I will definitely be posting on this blog in regards to what is going on but…..SO FAR SO GOOD.  Good luck with getting your debt situated.  Hope it all works out for you and your family.

        Robert

      • Mary

        Thank you Robert.  I am happy to hear that you are satisfied with their service.  45% saving is pretty good, they had told me that there is a form they provide you with to exclude you from paying taxes on it.  Did they mention it to you?
        I am now 3 payments behind on my $40000 credit card.  The attorney that had asked me for a retainer fee of $750 has not responded to some of my questions.  I am freaking out about being sued, considering I had a large balance in their bank that I closed down.  Also, I am current on my other 3 credit cards.
        I am sure that it feels good to settle and get them closed.  I will be talking to another attorney tomorrow and will post on this blog.   

      • http://GetOutOfDebt.org Steve Rhode

        Here is the link to the IRS form 982. http://www.irs.gov/pub/irs-pdf/f982.pdf

      • Mary

        Thank you Steve for all the help.

      • MaryHelper

         Being current on 3 out of 4 credit cards is not going to help you when settling with the one that you have stopped paying. If someone gave you advice to approach things this way then you got some really bad and potentially harmful information from someone.

      • Mary

        I have 2 credit cards with the same major bank and one I’m behind on.  The other is a smaller balance and I have been able to manage the payments.  The attorney that was referred to me advised me to continue the payments to show the bank that I was being responsible.  What is the right thing to do?  It is so confusing.

      • MaryHelper

        When settling debts you must assume that the recovery specialist/debt collector has real time access to your credit report and other “skip trace” type of information about you. Some use sophisticated collection metric software provided by the big credit reporting agencies.

        When it can be seen that you are paying other unsecured creditors and not them come negotiation time, the deals are not as good or are not available at all.

        If you are making payments on other accounts with the same lender you are negotiating with it is even more problematic.

        If you are negotiating with a credit card lender where you happen to keep your checking and savings it adds an additional layer of complexity (not that you said you are, I am just pointing this out).

        Without the full scope of the accounts, balances, and a list of other details, it is difficult to suggest additional items for consideration. I did want to point out the concern I had for what you posted.

      • http://DamonDay.com/ Damon Day

         Hello Mary,
        We just started a new service on this site here where I offer a 15 minute free telephone consultation to help you figure out what the best solution is based on your circumstances. The service would help to give you some clarification on what you should do. If you send me over the contract for the Mathys group before the call, I will look it over and give you my thoughts on that as well.

        You can schedule the phone call by going to http://getoutofdebt.org/talk-to-a-getoutofdebt-org-debt-expert-for-free/

      • Mary

        Damon, I never signed a contract with them or with anyone else at this point.  I will be talking the situation with an attorney tomorrow.  I will update the blog and may reach out to you for help.  Thank you.

      • http://DamonDay.com/ Damon Day

        sure, please keep us posted.

      • Trutalent02

        Damon are you an attorney?

      • S D

        Damon – do you really think you’d look over Mathys’ contract and give it a “thumbs up”? Again, you’re “selling” your own debt services. Can you be a bit more honest and at least put a disclaimer in your comment(s) that you do also offer and/or get referral fees for selling people on your debt services? That would immediately discredit any advice you are giving to others. Major conflict of interest. Like I’ve been saying: those in debt, find unbiased articles and advice do not take Damon’s word for it and do not take my word for it. The proof is in the research.

      • http://DamonDay.com/ Damon Day

        Nope, not the contracts that I have seen of theirs. I don’t agree with what are extremely high fees in my opinion, and based on first hand consumer accounts, I do not agree with their pushy sales tactics.

        People pay me directly for my opinion and advice. That is my service. I don’t offer debt settlement services.

        People can take my advice or not, it is up to them. I don’t force it on anyone.

        I agree with you. The proof is in the research. Consumers should get multiple points of view before they do anything.

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