When he signed with ABC, he was deployed. I believe they took advantage of him and also made no effort to have him lodge papers for the SCRA so the interest on his debts could be capped. They took nearly $9,000 and have left him in a bigger mess 3 years later. We are now contemplating bankruptcy.
What recourse do we have in obtaining a refund from ABC for a portion of the fees. I know he paid the fees back in 2008, but do the new rules still apply that they cannot charge up front for their services? How do we go about obtaining a copy of his records from them? They’ve acknowledged they have it and I have his client ID. 2 requests for this information has been ignored.
My husband’s saga
My husband got himself into trouble in mid-2006 when he divorced his ex-wife. By 2007 he was in so deep he had no way of paying back any of the debt. He was in the Army Reserves at the time (and unemployed) getting ready to go full active duty when his Reserve unit received orders to deploy. He decided to deploy because it would give him an opportunity to settle his debt. At the end of 2007 he found ABC Debt Relief, assigned Power of Attorney to his mother to act on his behalf and signed the contract with ABC for debt settlement at the beginning of 2008.
ABC Debt Relief required payment upfront before they would commence with any settlements. They gave him an estimate of $9,000 for their fees based on his debts of approximately $60,000. They then deducted $2,750 from his account during the months of March 08, April 08 and May 08.
They would occasionally call his mother with an offer from a CA or the creditor, ask if the funds were available and whether or not she would accept it. His mother would email him with the creditors details and $$ amount of the settlement and arrange for the bank to send a check. November 2008 is the last time they arranged a settlement on an account. He had repeatedly requested his mother ask them for details on the CA’s and the original creditors so he could monitor his payments and credit report. None were ever forthcoming.
His deployment ended in May 09 and he returned home in June 09. He was still effectively unemployed because he had deployed with a Reserve unit and had not converted to full time active duty before he deployed. In October 09 he received a call from Portfolio Recovery Services regarding an outstanding debt with Rooms To Go. He agreed to a payment plan of $242 per month for 12 months starting in December 09. He stuck to this and paid it off in December 2010. Portfolio Recovery Services have not issued a receipt as they said they would in February 2011 when he last spoke with them. They have even gone so far as to update his credit report with $913 outstanding and showing the account as currently being in collections. They’ve refused to honor the settlement even though he never missed a payment and it was confirmed via telephone that there was nothing more to pay. We even provided them with proof of the final payment in the form of the cancelled check because they first said they had not received the final payment. We are now at a loss as to what to do because we keep getting the runaround with them and we have not received the receipt as they indicated we would receive.
On 13 March, 2011 he received a notification from a Receivables Performance Management LLC acting on behalf of Harvest Credit Management that he owed $29,152.63 for an outstanding credit card. The original creditor was Juniper, who were at some point bought by Barclays. He remembers this debt as being one that ABC Debt Relief told him had gone out of business and they could not find who owned the debt. So they did not do anything with it and told him that if someone had bought the debt they would have found it. I googled Juniper Barclays and found a wealth of info so why couldn’t they? Bearing in mind that he is in a war zone during this whole saga. He also says the original debt was about $12,000 so how could they come up with $29,152.63?
How can we get ABC to send us a copy of his file? We need to know who the CA’s he paid were representing or bought the debts from. He has the cancelled checks on his bank statements but without knowing who Phillips Cohen etc were representing we have no idea which debt it relates to as show on his Credit Reports. To date, they are giving us the runaround.
After checking his credit report because we thought that he was finally on track after nearly 3 years we started noticing that only 4 out the outstanding debts that he had settled were listed as closed and had notations that the accounts were settled and paid. Apart from his credit being worse than ever, the three bulleted ones are giving us the most headaches at the moment.
We have spoken with a lawyer because at this stage we are contemplating him filing for bankruptcy. I don’t see how we can possibly clean up his report and the debts that ABC have not settled. We would like to request a refund from ABC. In my estimates they settled $18,000 worth of debt so they should only be entitled to 50% of their fee. I also need his file for the bankruptcy lawyer so again we can know which debts are not to be included in the filing.
The other question I have regarding bankruptcy is this:
I will say that he is finally back on full time active duty. It only took the army 15 months to find him a permanent position. In the mean time he was still in the Reserves and doing classes for the different police departments. So paying the $242 a month to Portfolio was a real hardship but he did it.
Our situation now, we have a $30K CD that was used to secure a personal loan. We did this in the hopes of improving his credit. I don’t want to lose my life’s savings but if we pay off the secured loan we can then claim the balance in an exemption in the bankruptcy filing. What do you suggest we do?
We also own our vehicle. That is what we used the $30K personal loan for. Can they make us sell the car if he files for bankruptcy because the vehicle is registered in his name only? It is the only vehicle we have. We have an 11yo and I am due to give birth with our second child in 6 weeks which why bankruptcy is looking very attractive.
Thank you for taking the time to read this but we are at a complete loss. We thought we did the right things only to find out it was all for nothing.
Wow. That seems very unfortunate.
The CD loan is probably not the best way to rebuild credit. The most effective way is to close the door on the old debt and start building a good record using creditors that report to all three credit bureaus. Here is a guide that I wrote that will help you.
I understand the Soldiers’ and Sailors’ Civil Relief Act argument and your husband should have been protected while on active duty. While on active duty the limit any creditor could charge him was limited and would have provided him with temporary relief during that time.
And then we appear to be left with the issue of the large remaining outstanding debt. From what you shared it does not appear you have resources to settle that debt right now if you got an offer. Is that correct? If you did have cash on hand to settle it I could probably find someone who for free, because of his military service, would take a shot at it for you.
I think what we are honestly left here with is trying to decide if it is better to spend a lot of time to try and go back and fix this mess or move forward with the bankruptcy route in order to close the door on the old situation and start over as quickly as possible.
The question for you is if it is better to focus on trying to fix the past or fix the future.
As for the particulars of the bankruptcy case I’d have to suggest you find a local bankruptcy attorney and discuss it with them. If you got a copy of his consolidated credit report that would probably suffice for information regarding any accounts that should have been concluded.
My personal opinion is that with the baby due in the near future and the situation to date, bankruptcy is not an unrealistic or inappropriate solution to consider.
Please post your responses and follow-up messages to me on this in the comments section below.