A reader sent in a mailer they received from CreditAssociates from Dallas, Texas.
The mailer looks like a typical settlement mailer but it does contain this interesting line, “Upon program completion, the credit bureaus should be notified by your creditors that your debt has been satisfied in full for less than the balance owed.
And while that is true, what it does not say is the amount of debt forgiven can be reported as a bad debt and remain for 7 years from the time the account goes delinquent. And that you may owe income tax on the forgiven debt.
So I took a look at the CreditAssociates website to see what they were saying about bankruptcy as an option.
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They say, “Filing bankruptcy can have long term effects on your credit and can impact your ability to apply for new credit or in some cases, employment. Bankruptcy does not always go away after 7-10 years, as some bankruptcy attorneys may claim. For example, nearly all credit applications ask if you have ever filed bankruptcy in the past. There are also costly court and attorney fees that accompany the filing process. Finally, depending on which chapter of bankruptcy you qualify for, you may still be required to pay back all or some of your debt.” – Source
My opinion is this is very misleading as well. Or at least not full disclosure of the facts about bankruptcy.
The mailer the consumer received falls into the “it’s an advertising letter” bucket. I always advised people to do their own homework and make sure they are making a fully informed decision before jumping to any offer.
I would recommend that anyone considering using such a company should read the following free guides.
- The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
- 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You
- How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off
The BBB is reporting a rash of complaints in the last 12 months.
Most of the issues seem to surround marketing mailers.
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Is Credit Associates licensed in Texas? I tried looking them up at the OCCC website under both Credit Associates and CreditAssociates and there is no record of any license.