Debt Settlement Companies Face Lawsuit

May 21st, 2009 by Reed Allmand

According to an article in the Dallas Morning News Attorney General Greg Abbott filed a lawsuit against two Dallas-area debt settlement companies and two out-of-state firms this week, accusing them of orchestrating fraudulent debt settlement schemes.

The article said:

According to the state’s lawsuits, the defendants unlawfully misrepresented and overstated the nature of their services…Court documents filed by the state claim that the defendants misrepresented the availability and consequences of bankruptcy, made misleading credit repair claims and misstated the effect of entering a debt settlement program.

This doesn’t surprise me.  It’s just not surprising that these companies are misrepresenting bankruptcy to their clients.  Bankruptcy is a powerful tool that can help almost any debtor get a handle on his/her financial affairs.  Bankruptcy is the ONLY tool that can discharge a debtor’s debt.  Debt settlement does not have the power to discharge a debtor’s debts and many unscrupulous debt settlement companies attempt to hide this fact.  Let’s sort out the truth from fiction; debt settlement is not a guarantee.  Let’s repeat, debt settlement companies cannot guarantee any results to their clients.  Debt settlement companies do not have the power to force creditors to negotiate and they cannot stop foreclosures, wage garnishments or other serious issues.  Only bankruptcy can stop these things.  If you are facing foreclosure, credit lawsuits and/or wage garnishment, you need to speak with a bankruptcy attorney.  Filing bankruptcy will automatically stop foreclosure, lawsuits and garnishments.  To find out more information about bankruptcy contact a Dallas-Fort Worth bankruptcy attorney today.

About Reed Allmand

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Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

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