During the summer of 2005 several states filed actions against non profit credit counseling agencies. In fact, the State of Maine sued and won against a non profit NFCC member.

Essentially the same lawsuit could be filed against any of the Credit counseling agencies.

In order to clean up the mess, the IRS proposed new rules changes in October of 2005, which went into effect later in the year.

The rules changes explicitly detail what activities a non profit may engage and their relationship to for profit entities.

As it applies to non profit credit counseling, here is the functional analysis:

Credit counseling agencies that do not charge fees make their money from "fair share". Fair share is a percentage of the money sent to the creditor, which the creditor then sends back to the agency.

Historically it was a nice system, however, there is a conflict of interest. How can the non profit protect the consumer from the creditor who pays the non profit? What it really was, was kinder, gentler collections, as the agencies still must conform to the requirements of the creditor, rather than act entirely in the interest of the consumer.

AS the IRS rules apply: no non profit may engage in commercial activity. Collecting money from consumers for a fee (either paid by the consumer or the creditor) constitues a commercial activity and therefor is impermissible under the non profit rules. What this means, is that any non profit which makes its money from collecting payments from consumers for debt management plans is in violation of the non profit rules.

Secondly, collecting payments from consumers to pay for profit creditors benefits the creditors. The creditors even pay for the service via "fair share". This is not permissible under the non profit rules as the activity of the non profit benefits a for profit company.

Therefore, any non profit that collects money from consumers to pay creditors and is paid to do so will lose its non profit status. As most states prohibit the activity unless the entity is a licensed collector, non profit, or attorney, these agenceies are then operating illegally.

If anyone is interested in learning more (as this is but a brief synopsis) please feel free to contact me.

I was getting scared reading this thread lately, because I just signed up with Richard Brennan's office, but I have had no problem contacting his office, and in fact they have contacted me as well. Now that he replied to the thread, I feel even better. As of yet, everyone at that office has been very friendly, and always returned phone calls. Hopefully everything will continue to go smoothly.

[david]

I am happy that you have got a positive response from Richard Brennan's office. Hopefully, you won't have problems while dealing with them.

OK so Richard why did CEO Jeff Formulak call me this morning and shout at me for five minutes, telling me I better get my facts straight before I make accusations. What should I think of an organization that shouts at its clients? And then I got the same treatment from the office manager Michael Tenny. Why dont you give me my money back then Mr. Brennan, and Ill be on my way-Oh yeah right that would require professionalism on your part, thats why you dont do it!! Beware folks, these guys are shady-Stay clear of Richard A. Brennan and creditcure, they stole $1500 from me. Mark

It is important that I let everyone know that Brennan gave me a refund. He apologized for staff problems, and was very reasonable in his dealings with me. Richard A. Brennan is a stand up guy, who is truly in the business of helping people.

I am a current client and I have to agree with most of the people here. I have tried to contact someone from this office about my account for 2 weeks, phone and email and no one will respond to me. If no one calls me by tomorrow I will be blocking their withdrawl and contacting the creditors myself. Mr. Brennan can write whatever he wants about his services but when they miss a payment and I can't talk to anyone about it makes me quite upset.

[curlycarl]

Hi Robert

Companies not responding to consumer requests do not leave a positive impact on their business. It sounds shady at times. Put your request in writing also so that you can prove your actions at a later period. At this point, I will also think about blocking the company from making future debits in my account.

[Jedi Mistress Ari]

Mr. Brennan,

Did you happen upon the thread in this very forum where the people speaking are complimenting you? I'm sure you are a hardworking and upstanding gentleman. Is it possible that a few of these upset clients of your are so because some of your staff didn't function properly. It happens, and I'm sorry to say that most of the time, when one person does wrong, it's the one in charge who gets a pie in the face.

Take care,
Ari

I have also paid $900 and no payments have been posted to my credit cards. I have called and called. No one ever calls me back. The companies that did agree to work with them have cancelled the lower interest rates due to not getting the payments.

[john]

Hi

You must file a case against the law office. Do you have the copy of the agreement signed with the law office? It seems to be a breach of contract and brings up a civil action. You must take some legal advice from an attorney and file a class action lawsuit against the law office.

I have had a negative experience with the staff. The company made one of the credit card payments extremely late. I called all day for 3 straight days before someone finally talked to me, and she was rude and stopped short of calling me an idiot. I will be looking for other options, for sure.

The Law Offices have not applied my February payment as of yet to any of my creditors and two of my creditors have not received a payment since the beginning of February 2006. I have tried to resolve this matter with the Law Office but they have not resolved this situation and thus the two creditors have dropped me and are now seeking collection actions against me. This is very unprofessional business. I have been with the program since 2003 and have not experienced such careless and negative business. I pray that Mr. Brennan is a upright law office and corrects my accounts ASAP.

I am dealing with a bankruptcy lawyer now. Consolidation was a means of avoiding that, but when payments were not made, my interests rates went up and late fees were applied. I have no other options now. My lawyer may be contacting Mr. Brennan

[andyyoung]

If you use a consolidation plan, the counselor can bring the accounts to the current status. He will try to reduce the interest rates and wipe off the late fees. Take a free quote from a debt counselor before you decide to file for bankruptcy. If you can manage making the consolidation payments, your credit will show some improvement. Bankruptcy will hurt your credit negatively in the long run.

I am currently using the law office of Richard Brennan for some of my accounts, but I am doing a debt settlement, not consolidation. So far, no problems contacting his office. Email gets the quickest response I think...always by the next day. They even emailed me once to say that they had been trying to contact me and wanted a better number to reach me at.

I am also a client of United Christian Financial which was taken over by Mr Brennan's Law Firm. I would suggest to anyone thinking of doing business with them to look elsewhere!!!! They have done more harm than good!!! We have had payments that were not posted to the creditors, payments that were ment for one creditor and sent to another and the most god awful customer service I have ever experienced. IF and that is a big IF you are able to talk to a live human being, they are the rudest, degrading people I ever have come across. We have disassociated ourselves with them and like a previous poster mentioned, were able to work with our creditors and are actually paying lower interest rates then with the credit counseling. To those that were actually able to post positive comments about Mr Brennan's LAw Firm, congrats...you are one of the few!!!
Carrie