Who Can I Sue to Get Me Out of This Debt Settlement Mess? – Tim

“Dear Steve,

I acquired a debt of over $15,000 dollars trying to help my sister who was going through a very tough divorce with no income being supplied. When I couldn’t seem to get the overall bill down because the money I was paying back was all being eaten up with interest each year I responded to the tv ad that led me to Allegro Law. Today I find out the people who were supposed to help me settle this debt have done nothing but make it worse, lied to me and misrepresented everything> The credit card company now calls me daily and harasses me when I entered into an agreement with Allegro Law in good faith to settle this debt.

What do I do? I am strongly considering contacting a lawyer and sueing someone. But who do I sue, Allegro Law, Americorp or? Also what are my chances of receiving the funds I paid them back and possibly damages for misrepresentations that they made? I am totally stunned that this could be allowed to happen to anyone!

Sincerely and desperate,


Dear Tim,

The Allegro Law mess is colossal, but it isn’t the first and it won’t be the last debt settlement company to screw up and get closed down.

Debt settlement falls into that category of “if it sounds too good to be true, it is.” Debt settlement sounds like it is a magical solution in the ads but very few people actually get relief from it.

Someone once told me that the best scam is one that sounds mostly plausible and I guess that’s what debt settlement is. Is it possible to settle a debt? Yes. Is is probable to settle all your debts? No. Do debt settlement companies take their fees before providing a real service? Yes they do.

A number of state Attorney Generals and the Federal Trade Commission are trying to crack down on the practices by debt settlement companies. And if you wanted to do something constructive you should file a complaint with your state Attorney General.

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As far a suing goes, I sense you are pissed off. I would be also in your position. You have a right to sue, but I seriously doubt it will result in anything. In your case Allegro Law was shut down by the state of Alabama. All of the money they collected as fees was spent or disbursed and not held in an escrow account. The only money that remain are funds that were being saved up for settlements but those funds are now frozen by the court while this mess is worked out. I can’t imagine that Allegro Law is going to have any assets to go after if you sue and win.

The court appointed receiver has done an absolutely horrible job managing this mess and while I was very supportive of him in the beginning, I’m increasingly more and more disturbed by how this has been handled since. It could have been so much better for all consumers impacted by this mess.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

You have a right to sue, you can meet with a local attorney to discuss this matter, and there are certainly enough reasons to sue. But I think at the end of the day you are going to have to weigh the benefit of pursuing such action and that it will result in a resolution that will restore you to where you once were.

So, get your narrative together and file a complaint with your state Attorney General, the Alabama Attorney General, and the Federal Trade Commission. All of that you can do for free.

As far as for you, it is probable that bankruptcy is in your future to deal with the problem debt. It is not the credit card companies fault that you elected to use the services of Allegro Law that latter went on to fail. The credit card company will claim that was a choice you made and you still owe them the debt. Don’t be surprised if they sue you. If they do, find a local bankruptcy attorney to go and meet with to discuss if bankruptcy is right for you.

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The situation sucks, it’s not fair, and it is what it is.

Please update me on your progress by

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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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.
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