I spotted an article “New Law Tightens Rules for Debt Firms” in which the Minnesota Attorney General, Lori Swanson, does not mince words about the problems she see with debt settlement companies. You can read the full article here.
Consumers need to go into these transactions “with their eyes wide open,” said Elwood. Once they sign with a debt-settlement company, many consumers don’t realize their bank accounts and wages can still be garnished, they can be sued and have judgments placed against them. And creditors can still call them.
“Debt-settlement companies really put people into a financial death spiral,” said Attorney General Lori Swanson, whose office played a prominent role in getting the legislation passed. “They get further and further behind and it’s hard to get out.”