Our Debt Settlement Attorney Florida Lawyers have seen first hand just how many customers of debt settlement companies are mislead about debt relief. According to the attorney general of Florida and the Federal Trade Commission, they have obtained a court order that requires 11 companies to immediately cease all of their debt settlement activities in the state. These Debt Settlement Companies are accused of misleading consumers and violating several federal and state regulations. According to the complaint, the companies collected large amounts of money from consumers each month but failed to apply these sums to their outstanding credit card balances.
Debt settlement firms claim that they are able to convince credit card companies to settle overdue accounts for pennies on the dollar. What they do not always explain to consumers is how this can be achieved. These companies often collect payments from consumers each month and place them into escrow accounts and then wait until their credit card balances are seriously delinquent before offering a reduced amount to settle the outstanding debts in full.
Consumer advocates say that this strategy is very risky for borrowers. Additional borrowing can be extremely difficult when delinquencies have caused credit scores to plummet and there is no guarantee that credit card companies will even accept any debt settlement offers. Reports suggest that some of the customers of the 11 companies covered by the injunction were sued by their creditors or pursued a personal bankruptcy to escape unmanageable financial situations.
Debt Settlement Attorney Florida Lawyers with debt relief experience have a fiduciary relationship with their clients. This means that their fiduciary duty is to be completely candid and forthcoming when discussing the differences among debt settlement vs bankruptcy and credit counseling. They must also explain the possible consequences of pursuing these options. A Debt Settlement Attorney Florida Lawyer could also inform borrowers who have pursued debt settlement that a Chapter 7 or Chapter 13 filing offers the chance of a fresh financial start and puts an end to harassing calls from bill collectors.