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The Credit Exchange Introduced Me to Allegro Law. What Do I Do Now? – Ashley

Ashley

“Dear Steve,

I set up with Allegro Law through what i now know was a marketing tool The Credit Exchange. When I spoke with the credit exchange they told me they had millions of customers and specialized in my situation. I am a single mother who is losing her home since my fiance left and I did not want to take a full bankruptcy since I know I am responsible for my credit card debt.

We set up a payment plan and they told me it would take 17 months for my debt to be cleared. I was ecstatic that I could clear my debt and fix my credit in such a short time so I signed up right away.

I got nervous the following month when I had still not received anything in the mail from them so i called them. They told me not to worry they had already started contacting my creditors and my package would arrive soon. This is 5 months later and I have never received anything from them.
My first payment came out on May 5 2009 as a start up fee. The next month they it came out normal BUT the month after that they took it out 2 weeks early which bounced my account and cost me over $600 in bank fees. This left me with out a pay check for 3 whole weeks with was devastating. I spoke to Allegro Law and all they told me is I should have prepared better and did not even acknowledge that they took it out early. After being treated horribly by their customer service I decided to cancel. i sent in the paper work they needed to take me off but they still did not cancel my account. They told me they were in a processing hold and could not cancel me but would keep taking my money. I had the bank put a hold on anything from them and did not pay them another dime.

I finally got my account canceled in September…I originally canceled in July…and they told me they were not doing any refunds. I have almost $1000 into this company which I could have easily taken and used to pay off 2 credit cards but they will not release it. I have repeatedly tried to contact the new receivership but I am having no luck there either. I am currently being sued by my mortgage company and have been threatened by one of my credit companies to take suet.

I am really terrified and disgusted that a company would steal from their customers and cause so much turmoil in the end. All I want is to know if I am going to get any of my money back or if they have decided to eat it all away in fees for the last 3 months even though I canceled in July.
At this point I am looking into a full bankruptcy since this company has pushed me into it.
They should be ashamed of themselves.

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How do I find out for good if I will get ANY of my money back. If I am not able to what action can I take to at least recover some of it and would it even be worth suing them for?

Ashley”

Dear Ashley,

I would suspect that you will not get a full refund when and if the court finally releases money from the Allegro Law seizure. Any funds to be refunded probably won’t be disbursed for a year or more. For now, I think all you can do is consider the money lost.

You brought up a very good point that I hear often. People decide that they want to launch on some debt reduction path, like debt settlement, in an effort to be responsible for the credit card debt they incurred. I understand that point of view.

But under the auspices of that belief, people do all sorts of silly and misguided things. Let’s take the debt settlement approach for you. In your life situation there was never an expectation that either you would be able to settle the debt, or that your creditors would agree to settlement offers. That left you open and exposed to escalating collection activity and lawsuits from your creditors as you redirected your payments to a third party debt settlement firm.

Responsibility comes in different forms. Some would say that the most responsible thing to do is to sacrifice everything and repay your creditors all that you owe. But I think there is another aspect to responsibility. It is just as responsible for someone to look at the situation for what it is and take some action that will remedy the situation so that all parties are treated in a fair, civil, and legally protected way.

A fact that eludes most people is that just because someone goes bankrupt does not mean they can’t repay their creditors to achieve their goal of fully honoring their debts. That’s what I did after my bankruptcy and boy was I surprised how my creditors actually told me not to send payments. But that’s another article.

Bankruptcy hurts your credit but so does not paying your bills to send money to the debt settlement company. But bankruptcy also prevents you from being sued, it ends collection activity quickly, and it allows you to get a fresh start. Using that “do-over” you can quickly rebuild your credit.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
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So in your situation we are faced with two issues. The first is the debt settlement mess and the second is how you are going to address the underlying ongoing financial mess. In my opinion you would have been better off going bankrupt from the beginning. It would have avoided all the pain and hassle you have gone through.

It is a shame that The Credit Exchange was not a bigger help in your situation. They appear to have just been a sales arm for Allegro Law and collected a marketing fee for selling you into the program. Allegro Law as you knew it does not exist anymore. Since being taken over by the court it is now just a different mess, not better.

Should everyone be ashamed on their actions and part they played? Hell yes. Even the court appointed receiver is doing a less than optimum job in my eyes. By the way, the Allegro Law court appointed receiver site is AllegroLawReceivership.com.

As far as suing goes, you could file a suit in your local small claims court and see what you’ll recover. Unfortunately I doubt it will be much, if anything, since the assets of Allegro are locked up by the court. It seems your only recourse would be to go after The Credit Exchange for the marketing fees they were paid to sell you into the program. That’s probably going to be an uphill and difficult battle.

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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