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My Debt Settlement Company Safe Trust Financial Went Bankrupt. Now What? – Stan

“Dear Steve,

I paid Safetrust Financial for 2 years to settle my debts. They settled just one account and have filed for bankruptcy.

Whom could I contact to get my money back? What are my chances of getting my debts settled? Thanks,

Stan”

Dear Stan,

Safe Trust Financial filed for a Chapter 11 reorganization of their debt and should be still delivering services. From your short question I get the impression they are no longer providing you with any service. In that case I think you’ll just wind up as yet another unsecured debtor owed money out of the bankruptcy.

In an interesting update, it appears things are not moving ahead with the bankruptcy. Two of the creditors, US Debt Masters and Consolidated Financial Freedom, just yesterday filed a motion with the court to block the sub-lease of office space by Safe Trust.

First and foremost, the sub-lease is overtly suspect based upon the fact that it was executed only four (4) days prior to the Petition Date, by Efrain Garcia as both the President of the Debtor as well as the President of Vital. Second, testimony was elicited at the 341 Creditors Meeting that Debtor, along with two related debtors (one of which is also owned by Mr. Garcia) are all leasing the same premises under separate sub-leases, and that the combined rent being paid exceeds the master lease being paid by Vital by $6,000.00 per month. These facts raise questions as to whether the rent being paid is above the market value and whether the execution of the sub-lease was an arms-length transaction. It appears as though Debtor is effectively seeking this Court’s approval to allow an affiliate to profit at the expense of the estate. – Source

In another filing Safeguard Financial also objected to payments being made under the related bankruptcies of P & E Solutions, Vertexsoft, and Safe Trust Financial. In that filing Safeguard Financial said:

On or about March 31, 2011, Debtors filed their Motions to Authorize Continued Payment to Related Entity, Vital Software Corp., and Motion to Assume Lease with Vital Software Corp in their respective bankruptcy cases (collectively, the “Motions to Pay Vital Software”).

The Motions to Pay Vital Software provide, inter alia, that approximately four (4) days before the Petition Date, on or about February 3, 2011, the respective Debtors and Vital Software Corporation (“Vital Software”) executed agreements to sublease office space (collectively, the “Leases”) located at 201 S. Andrews Avenue, Suite 1, Ft. Lauderdale, FL (the “Property”). Interestingly, the Leases purport to cover the same Property for each of the respective Debtors.

Based on the Debtors’ filings with the Court, the breakdown of the Leases and their respective amounts is as follows: (1) P & E Solutions Company – $9,000.00 per month; (2) Safe Trust Financial, Inc. – $8,000.00 per month; and Vertexsoft Corporation – $6,000.00 per month. Accordingly, pursuant to the Leases, the lease payments total $23,000.00 per month.

Upon information and belief, pursuant to a master lease agreement with Holdman Holdings, Vital Software pays approximately $17,000.00 per month to lease the Property. As a result, it appears that Vital Software will profit from the Leases in an amount of at least $6,000.00 per month.

Furthermore, during the 341 Meeting of Creditors, a principal of the Debtors, Anthony Passero, testified that he and another principal, Kevin Ellis, were two of four owners of Vital Software.

Based on the foregoing, Safeguard does not believe the Debtors are paying market rent to Vital Software, an insider of the Debtors, and respectfully objects to the Motions to Pay Vital Software. – Source

If I had to bet money on the outcome I would be surprised that this case is going to end any time soon and if you are not getting service on your account now I would not expect it to get better any time soon.

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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.

7 Comments

  • I believe Safetrust – and FBL are the same company.  I’ve been having the same issue.  I’ve emailed them numerous times.  I finished paying into the the meracord account as of July 2011 and everything seems to have stalled.  Now I have 11k with meracord earmarked for settling my debt and FBL seems to have just disappeared..

  • Steve,
    I have a same problem with the FBL (Safetrust) they took all of the service fees, settled just one account (with the smallest amount) and disappeared. I call them but the person that answered told me that this is a privet number. I filed complaint with BBB. How I can get my money back?

  • Stan,

    Did you send your letter to PO Box 1438, Ft Lauderdale, FL 33302?

    I’m surprised you can’t reach them. From their bankruptcy documents they appear to have wanted to have continued operations and filed a Chapter 11 bankruptcy to emerge from bankruptcy and continue business.

    I’m afraid the outlook is not promising if calls are not being answered and mail is being returned.

  • Thanks for your answer. I tried calling the company several times but they wont answer the phone. My letters to them were returned since their last address is no longer valid.

  • Thanks for your answer. I tried calling the company several times but they wont answer the phone. My letters to them were returned since their last address is no longer valid.

    • Stan,

      Did you send your letter to PO Box 1438, Ft Lauderdale, FL 33302?

      I’m surprised you can’t reach them. From their bankruptcy documents they appear to have wanted to have continued operations and filed a Chapter 11 bankruptcy to emerge from bankruptcy and continue business.

      I’m afraid the outlook is not promising if calls are not being answered and mail is being returned.

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