Cathy wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.
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“Dear Steve,
We have been with a debt settlement company for about 4 months and one of the unsecured loan outfits is already trying to sue us for the 85% of the total amount plus attorney fees and late charges included for about $500.00 a month or will garnish or lean or property not worth what we owe. Is a debt settlement company really worth having or should a person try doing this on there own.
They offered the company 24% of the total due. Then they asked us if we comply or deny the attorneys offer. What should we do. we do not have the money and we sure cant borrow
Cathy ”
The Answer:
Dear Cathy,
The reason they are suing you is because they can under law. Being in a debt settlement program, unlike bankruptcy, provides you with absolutely no protection from legal action, judgments, garnishments, collection activity, etc.
My guess is that you are paying the debt settlement monthly. If you check, you will find that your initial payments have been applied to unearned debt settlement fees and that they have little money for you to use to settle these debts. Your creditors have also probably not been getting any payments so they have every right to sue you.
Your choices are limited. You can either face the lawsuit and most likely lose, or you can go talk to a bankruptcy attorney to get legal protection and stop this suit and deal with your debt through the court.
Be sure to read these two previous posts that cover the major issues with debt settlement. Debt settlement gets closed down, and the success rate of debt settlement.
Let me know what you decide to do.
