Debtmerica Relief

Our experience with debt relief companies has been that despite promises to the contrary continue to harass clients fees and interest continue to accumulate and that the companies do not contact the creditors. Usually creditors turn the claims over to collection agencies file lawsuits and pursue collections of the unpaid amounts. Debts are seldom settled credit histories are ruined and many people are forced to seek bankruptcy protection. Typically it is difficult to obtain refunds from the companies. ~~These companies usually instruct their clients to stop paying their creditors. In some cases clients are instructed to make monthly creditor payments to the debt relief company directly either for disbursement to creditors or promising that the money will be deposited in a special escrow savings account until sufficient amounts accrues so that settlement agreements can be negotiated. What they don’t prominently disclose is the fact that saving the money could take years and in the meantime creditors likely will file lawsuits resulting in wage garnishments and damaged credit scores. In other cases payments made to debt relief companies to be disbursed to creditors were not made as agreed resulting in greater financial hardship for the debtor and debtors may not realize that if creditors accept a negotiated settlement the amount forgiven constitutes taxable income.~~Since October 27 2010 amendments to the TSR by the Federal Trade Commission prohibits for-profit companies that sell debt relief services by phone from charging advance fees before they settle or reduce a customer’s credit card or other unsecured debt. These amendments also require debt relief companies to make specific disclosures to consumers; prohibit them from making misrepresentations; and extend the TSR to cover calls consumers make to these firms in response to debt relief advertising. For-profit debt relief services include; credit counseling debt settlement and debt negotiation services. Non Profit firms are not covered by the amendments however for profit companies who falsely claim nonprofit status are included. ~~