Debt settlement company Debt Relief USA has filed bankruptcy in Texas following recent investigations and suits by the attorney general of several states.
The bankruptcy petition can be viewed here and shows the ownership of Debt Relief USA to be Kelly E. Reilly, Alvin B. Bell, and James F. Wojcik.
What will be significantly up in the air is going to be the disposition of payments made by consumers that have only gone towards fees by Debt Relief USA that may no longer be able to honor those commitments.
Gary A. Armstrong, the company’s attorney, said Debt Relief will not negotiate individual settlements and will not remove money from individual accounts pending the bankruptcy proceedings.
The bankruptcy filing won’t affect any debt settlements the company has reached with a client’s creditors, he said.
On client deposits at Debt Relief, Armstrong said, “Our intention is to refund them as much as possible, but it’s subject to bankruptcy court approval.” Source