I emailed you yesterday and was not very clear about my situation. I would like to start by saying I am scared,confused and feel like I made the wrong decision when I chose to go the debt settlemnt route-especially now with everything I am reading.
At the end of December I contacted Freedom Financial to learn more about debt settlement b/c I was terrified of the word bankruptcy. I always equated it to the worst case scenario and how it would ruin my credit forever.
My husband suggested the bankrupcy route and I felt that was not the right choise. Needless to say I am not a financial expert he is but we won’t go there) I was the one who had started a children’s franchise and had to close it b/c it basically drained all our money-which we got from home equity lines of credit as well as cc’s to be exact over 65,000 in debt.
I was able to get a job that started in Jan. and felt that I could pay back the debt but needed some help. I heard Freedom Finanical on the radio and a time that I was feeling very deperate and did not think there were any other options. I did show the agreement to my husband and he spoke to the rep and settled on paying $900/mo which would be paid in 36 mo-the debt was lowered to $36,000 and we were told our credit would be bad until the cc started gettng paid. We were ok with this.
Since this has happend a couple of new developments were that the FFM wrote us about1 cc that did not accept the plan-Advanta Corp-which was the business card. I continued getting calls from them and have been avoiding contacting them until recently.
They have agreed to reduce my debt from $7,100 to $3,567 to be paid off in 5 mo. They are the only card that continues to contact me but I am nervouse about all the other things happening with debt settlement companies and I have been trying to contact FFM for 1 week and have not been able to talk to anybody on the phone.
What do you suggest I do? I do not want to pull out and lose the $4,500 that I have already paid them which they confirmed would go to enrollment fees and they would not start paying off the cc until the fall. Also re the Advanta is there anyway I can not pay this business cc and is this on my credit report?
First, let me assure you that I am here to help. We’ll get to the bottom of this together.
I can hear the panic in your words. You seem to be all over the place all at one time. Let’s get focused on these issues and tackle them in order.
It is reported that Freedom Financial is one of the largest debt settlement companies around. With all the recent lawsuits and subpoenas against debt settlement companies there is going to be a whole lot of activity by states against these companies. Don’t be surprised to see a number of them forced out of business.
I don’t remember reading anything about Freedom Financial being sued by a state but from what you describe it sounds like the typical debt settlement business model, and they probably will be. I did do a quick web search and found this mention of Freedom Financial. Even more disturbing comments can be found here.
I did look at the site of Freedom Financial, and I was surprised to read their FAQ page. It openly addresses many of the issues that other debt settlement companies hide. So I’ll have to give them a thumb up for that.
One of my strong objections to debt settlement companies is that they front load the program with fees. Months of payments only go towards paying fees for services not delivered yet and that seems wrong to me. At the very least, if someone wants to terminate from the program the customer should be entitled to a total refund of fees on deposit but not earned yet. I have no idea what the Freedom Financial contract says about this. I’ve never seen one but some previous clients say it is not refundable.
What concerns me most about your experience with Freedom Financial is that you say your calls are going unreturned. When it comes to money issues, returning calls or even leaving a called back message is critical so the customer does not feel abandoned and start freaking out. I think you know what I mean.
I am a huge fan of lump-sum debt settlements when the person has the cash in hand to make a coordinated offer and pay all the settlements in full right then. I am not a fan of debt settlements where deposits are made monthly. The problem is that this fragmented approach tackles one creditor slowly, at a time, and even if you knock off some debts, but one of the final creditors refuses to deal, you are screwed.
I don’t know if bankruptcy is right for you but what I do know for an absolute fact is that not investigating bankruptcy for fear of how you might feel by going bankrupt, is a mistake.
I think what you should do right now is to contact a local bankruptcy attorney, go in for a free bankruptcy consultation, and listen to what the bankruptcy lawyer has to say. You don’t have to make any decisions at that meeting.
Then go home and let the information percolate inside your head for a few days. Think about what you learned, listen to your gut, and then make a decision about if you think bankruptcy is right for you.
The bankruptcy attorney might be able to make an argument for the return of money paid for debt relief services within 90 days prior to you filing. Be sure to ask the attorney if this might be possible.
I think you are a good person, trapped in a bad situation, and surrounded by a tornado of guilt, regret, uncertainty, and remorse. You want to do the right thing but you just can’t see clearly what that is. Go meet with the bankruptcy attorney and then Related