Bankruptcy vs Debt Settlement. I have enrolled in a debt settlement program and have been paying as requested for the past year. The company I am with is J Hass based in Arizona. I have been paying $457 a month and started in May of last year.
I currently have a little over $1800 in my notelworld account. I have three different creditor that I Owe around $34,000 to. I have been hit with less hours, elimination of overtime and my wife has faced the same. We are making significantly less and cannot pay the creditors and maintain are basic needs.
We entered into the program as we were told that the debt could be negotiated for about 40 to 60% of what was owed.
J Hass on their part has sent power of attorneys to the creditors but because their is so little in the account they can not offer a settlement. recently I was served with a summons on one of the larger acounts. j Hass contacted the creditor and requested that I set up monthoy payments with them and that they would settle later.
I informed the rep that I had no extra cash flow and that the money I was paying to them was substantial. i asked them to stop taking their fees at this time and settle the account for approximately $5000 which would be the accumulated amount of funds in January 2011 should j Hass agree to stop taking their funds at this time.
I am worried that this is a scam and will not settle any my account and run with the my trust account funds and then i am left in a worst situation. I am contemplating stopping the program all together, requesting a refund and filing bankruptcy. Can you provide me any insight?
The failure rate of debt settlement programs is huge. For the most part they don’t work and the debt settlement company takes all their fees up-front. The debt settlement company has no power or authority over the creditor and since your group sent the creditors a power of attorney I see you are not even represented by an attorney.
At the rate you are saving, your reduction in income and the level of debt you have I would bet a dozen donuts you will be sued by more than one creditor while you wait for the debt settlement company to take action.
Based on action in the works by the Senate and FTC I would not be surprised to see most front-loaded fee debt settlement companies to fail in the next year as those types of fees are outlawed.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.