You Have the Choice to Take Back Control of Your Financial Future.

Debt relief companies: seemingly everywhere, notably risky

On Behalf of | Feb 14, 2014 | Debt Relief

Anya Kamenetz, a contributor to the Chicago Tribune, makes two especially notable points about debt relief services in a recent article. We think they are interesting and relevant to many of our Florida and other readers and thus pass them along as something to think about.

First, Kamenetz notes there is no dearth of companies that advertise their services to debtors and boldly claim that they can erase debt and restore credit. Included among them are credit counseling agencies, debt settlement companies, credit repair enterprises, debt consolidation and/or elimination businesses and more.

Second, the phrase “caveat emptor” readily applies to most of these businesses, meaning that any debtor must tread carefully when approaching them for help. As Kamenetz says, consumers “are smart to be cautious” when dealing with such entities and to note well the risks attendant to using their services.

And, in many instances, there are risks indeed, and material ones at that. Kamenetz notes the many millions of dollars in judgments the United States Federal Trade Commission has obtained against such companies for a long list of transgressions. Those include exorbitant fees charged upfront to debtors and false promises that far exceed the mere promotional “puffing” allowed by law.

As commentators have routinely stressed in many articles focused upon debt relief companies, debtors’ best interests are rarely promoted through working with such businesses. Invariably, the interests being maximally promoted are those of company owners and other principals.

A bankruptcy attorney, conversely, has a legal duty to always act in good faith on behalf of a client, and couples that advocacy with years of specialized knowledge and training.

That contrasts heavily to debt relief companies, as noted by Kamenetz, who simply says this: “It’s best to stay away from these organizations.”

Source: Chicago Tribune, “Beware debt relief scams,” Anya Kamenetz, Jan. 28, 204


Kingcade & Garcia | A Miami Law Firm