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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.

4 Comments

  • Steve, you stated “You’ve suffered a reduction in income. You may want to consider temporarily suspending further deposits into the escrow account so you can make ends meet on the reduced income. Leave the escrowed funds alone for now.”. Consumers should realize law firms performing debt settlement, and the escrow companies even if the accounts are frozen (Put on hold), are charging fees monthly, and can drain the accounts placing the client in a worse position later. If the funds are needed, the client can close the account the the money now, take advantage of what the credit card or other creditors are willing to do to assist. They may be better off. In fact they are better off not using these companies who prey on the weak and desperate.

    • I totally agree it is nuanced. Probably my major point was taking a breath and come up with a plan to deal with the new situation. An emotional reaction from consumers either way is not going to end well.

      Thank you for your comment.

  • If the consumer lives in a state like Georgia which rigorously regulates debt settlement programs, and uses an escrow account, the consumer should contact a Georgia consumer lawyer. Escrow accounts are not permitted for debt settlement programs under Georgia’s law regulating debt settlement programs. A debt settlor who violates the Georgia requirement that the debt settlor must transmit funds within 30 days to the consumer’s creditors may give the consumer a cause of action all payments transmitted in the debt settlement program plus statutory damages of $5,000. The violation is an automatic violation of Georgia’s Fair Business Practices Act which affords treble damages to the consumer. If the consumer is aged 60 or more, additional protections may apply.

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