My Dad is With Zero Debt USA and Getting Sued. – Tammy

“Dear Steve,

My dad started using zero debt usa which is affiliated with global client solutions about 8 months ago and he has paid them over $9,000, creditors are still calling him and threatening to sue him.

In fact he got papers from one creditor the other day saying he had 30 days to comply. When he told global client solutions they told him it was his responsibility to file a appeal to stall it for another 6 months to a year.

Is this a scam? Is it really his responsibility to file his own appeal when they told him they have their own law firm? please give me your advice before my dad pays anymore money to this company…

Tammy”

Dear Tammy,

Your story is fairly typical of what I hear from people who have signed up for debt settlement services.

While your father may have been told one thing during the sales phase of the debt settlement program the Zero Debt USA site says something different.

Q. Can I be sued?
A. YES. Your creditors certainly have the right to sue to recover their money. If they should take legal action, we have a legal referral network available to advise you. – Source

And while they may have a “network” that could give your father advice, in most cases the attorneys in the network won’t defend the client getting sued.

Here are a few more statements Debt Zero USA makes that you’ll probably be interested in.

Q. Can you stop my creditors from calling?
A. NO. Your creditors have every right to try and contact you in order to collect a debt. If your account is in collections; collections agencies have to adhere to the FDCPA Guidelines. If you would like to learn more please read Fair Collection Practices Act. This defines when and how a creditor may contact you.

Q. Can creditors garnish my wages?
A. YES. The creditor first has to sue you, successfully obtain a judgment, and then file for a garnishment action

Q. What are the tax consequences?
A. Your creditors will report cancelled/settled debts exceeding $600 to the IRS and you are required to report the same as income on your annual tax return. However, the IRS permits you to write off any “income” from canceled debts up to the amount by which you were “insolvent” at the time. You need to consult your own tax advisor for advice specific to your situation.

Q. Does Debt Settlement have a negative impact on my credit?
A. YES. Your credit score will decline due to entering this program. How much it will decline depends on your original circumstances. Most of the accounts you place into negotiation are likely to “charge off”, which will reflect negatively on your credit. When a settlement is complete the creditor should notify the credit bureaus that the account has been settled.

Q. Do you guarantee that you settle all of my debts?
A. NO. There is no guarantee that your creditors will negotiate with us or that your debts will be reduced.

Bottom Line

I could find nothing on their site that talked about a legal network or legal help.

Your father should speak to a licensed attorney in your state for legal advice about the lawsuit. He should not take it lightly.

Since he has been sued, and it may not be the last suit, he might also want to click here to find a local bankruptcy attorney and discuss how bankruptcy can discharge his debt within a couple of months, stop collection alls and block any lawsuits.

I did notice that Zero Debt USA is displaying the Certified Debt Mediator logo on their site. You might want to read this. You might also be very interested in reading The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy and How to Get Out of a Debt Settlement Program and Get a Big Refund.

Please update me on your progress by