The State of North Carolina has finally resolved their action against Legal Helpers Debt Resolution. It marks a depressing end to an attorney loophole case that in the day was the business model of the attorney debt settlement company.
It is interesting that when LHDR was fresh out of the box, people were aggressively defending their business plan and attorney loophole process to get around the Telemarketing Sales Rules and telling anyone who warned of issues, “You don’t know what you are talking about.” But those statements were obviously not based in fact but in hopes the next big debt relief widget would be a money making home run. For those that sold the hell out of it and took the money and ran before the collapse, it probably was.
After having been involved and covering the debt relief industry for decades now it gets a bit ridiculous to watch the same cycle of birth, hope, and death run its course albeit in sub-prime mortgage, debt settlement, mortgage modification, or student loan assistance.
But here we go again as we watch the king of debt settlement, LHDR, apparently die a public death.
In the prime of the debt settlement business wave, Legal Helpers Debt Resolution was the big swinger in the industry. They had impressive offices, big staff, loads and loads of affiliates selling for them and probably sucking in money like they were printing it.
Now, according to State of North Carolina documents, “Defendants have disclosed to the State that LHDR has virtually no assets. Further, LHDR and the individual defendants are defendants in numerous lawsuits. Defendants represent that there is a very high probability that LHDR may seek the protection of a Chapter 7 bankruptcy filing.” – Source
So the State of North Carolina has entered into a consent judgment with “Legal Helpers Debt Resolution, LLC, transacting business in North Carolina as Legal Helpers Debt Resolution PLLC, d/b/a Macey, Aleman, Hyslip & Searns (hereinafter “LHDR”), and Jeffrey Hyslip, Jason Searns, Jeffrey Aleman, and Thomas Macey (“the individual defendants”).”
As part of this agreement, the Defendants “have agreed to a collective judgment of $122,000, and LHDR is agreeing to a judgment of $1,533,000. The parties acknowledge that this amount is the approximate amount of total deposits, as reflected on documents produced by Global Client Solutions, which North Carolina consumers made with LHDR during the time period addressed in the State’s Complaint.”
This consent judgment puts all of the Defendants, and individual attorneys, out of the debt business in North Carolina. “Defendants are prohibited from soliciting, directly or indirectly, North Carolina residents for the purpose of offering debt settlement, debt negotiation, debt management, mortgage modification, foreclosure relief services, or any related debt adjusting services, and are likewise prohibited from such solicitation on behalf of any third party offering these services.”
“Paying money for empty promises just drives consumers even deeper into debt,” Cooper said. “We helped put a strong law in place that makes it illegal to collect money upfront for debt relief work and we’re enforcing the law against violators.”
From 2010 through April 2012, approximately 412 North Carolina consumers lost more than $1.1 million in fees to Legal Helpers’ illegal debt relief scheme. Under a North Carolina law that Cooper helped win, it’s illegal to collect advance fees for debt settlement services.
Legal Helpers sought out financially distressed consumers with significant unsecured debt, claiming it could reduce their debt by up to sixty-five percent and have them debt-free in three to four years. Representatives also told consumers that Legal Helpers was one of the largest debt resolution firms in the nation and that they would be represented by an attorney. In reality, Legal Helpers did little or nothing to help consumers get out of debt. – Source
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