The Washington Post reported yesterday that a government investigation into the debt-settlement industry has found that many debt settlement firms misled consumers by claiming to be affiliated with federal stimulus programs and exaggerating their ability to reduce consumers’ loans .
The report by the GAO, the Government Accountability Office, was presented yesterday at a Senate Commerce Committee hearing, and it included recordings of salesmen describing their companies as “government approved” and linking settlements to the federal bailout of troubled banks.
Debt settlement companies charge a LOT of money, and they are heavily regulated in Texas.
In fact, it’s common for these services to not even be operating legally in Texas. In Texas, debt management or debt “pooling” services are regulated by the Texas Debtor Assistance Law, which is Chapter 394 of the Texas Finance Code. The Texas Finance Code is at http://www.statutes.legis.state.tx.us/Docs/FI/htm/FI.394.htm (See Chapter 394).
These services must be registered with the Texas Consumer Credit Commissioner in order to be operating legally. A list of those services that are registered is on the web site of the Texas Consumer Credit Commissioner at http://www.occc.state.tx.us/pages/searches.html. Click on “List of Debt Management Services Providers” to see if your service is listed.
If you are a Texas resident, and your debt management service is not listed on that page, or if they have violated other provisions of the act, you may have a right to recover from them: (1) all the money you’ve paid them; (2) any actual damages you’ve suffered as well as punitive damages; (3) attorney fees for enforcing your rights; and (4) injunctive relief (a court order stopping them from continuing to operate illegally).
Frankly, there is no real secret to settling your debts, if you have the money to do so (which many people that try to settle their debts, don’t). Debt settlement is one option that I discuss with my clients when they come in for a bankruptcy consultation with me, and sometimes it can be a viable option, usually if they have only one or two major creditors.
If you are having problems with debts, and live in the Houston Texas metropolitan area, call my office at 713-772-8037 for an appointment to meet with me. For more information, visit my web site at http://www.jthomasblack.com .
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The rate of debt in the country is stagering, many more families are struggling to pay their debt. The consumer need a workable solution to get back on track.