Hey Wingnut,

Since you are filing for bankruptcy, just put it on there to be on the safe side. I am very suspicious about this situation, I think that this CA is up to something no good. Sounds very fishy. You should have received the 1099, the fact that you didn't makes me think that either you have not told the whole story, or that we are talking about a dishonest bottom feeder here. If they owned the debt and then settled it, it would show as settled just after they reported the settlement to the CRA. That is absolute nonsense that they have to wait for the "contested" note to drop off. There is something shady going on here.....
What is the collection agency? (Sorry if you have already stated it.)

Consumer Law (Hess Kennedy) has over $18,000.00 of my money. I paid this amount to them over an almost two year period without them settling on even one of my accounts. When calling them to stop derict withdrawals from my account, they continued to take money out of my bank account, knowing that they were on the verge of receivership. I just want my money returned so that I can settle directly with my creditors.
What I have read about possible settlements is that, large creditor, such as Capital One, are getting money from Hess Kennedy before the consumers like you and me. It's 'our' money! Anyone else heard anything similar?

Hate to say it but the Receiver is taking $150,000 per month, the attorney representing the Receiver is taking $225,000 each month, and miscellaneous money is being taken in an amount equal to about $330,000 per month.

How they intend to pay anyone is beyond me. How does a lawyer take over an illegal business, run it for several months and then pay themselves from the "illegal proceeds"

It sounds "business as usual" in the new world order.

The last correspondence I got was that this was going to
be settled in March 2009. This is April, what is happening?

Anybody Heard anything new?

Hi Chrys, thanks. We did file ch 13, and that one suspicious account was included on my lawyer's advise to be safe. The next 60 months are going to be tough, but at least I see a light at the end of the tunnel.
Honestly, all I ever got was a letter from a Daniel Stermer, who was the receiver I think it was for Hess/Kennedy, stating that 1 specific cap1 acct had been forgiven, it would be reported as contested for late 08, and forgiven sometime in early 09. I tried email and phone calls, but never got a response, although I understand some folks in this forum seem to have had better luck. Since I own a home, and had 2 auto loans, etc it will be some time before the unsecured creditors see much, been a very painful, but educational process. Thanks all for the support.

-->> link removed - Jason. Please read TOS

Hi Wingnut,

Good to hear from you.

Yes, it is very unfortunate that you are basically ending up paying on an account twice.

But now I understand the 1099 issue, it's because everything got held up in the Hess Kennedy court case. So you should get it next year.

I assume you are on the suit? "http://74.207.205.46/claimstatus.asp" to check your claim status, although the site says that "the debt forgiveness and the tradeline deletion will occur early in 2009" so it is hopefully updated now on your credit report.

Yeah, 5 years is a long time. But at least you come out of it reborn with a clean slate, rather than the sloppy mess your credit report would show after debt settlement.

Yes, Thanks Chrys. There were other benefits for us after the 60 months are up involving 2nd mort I won't go into here. I never really looked into the 'why' part of how we received the forgiveness on 1 card, just figured that Allegro and Hess/Kennedy were somehow intertwined shall we say. Allegro did nothing for us but take our money, and get us sued, so I felt I had to take this route. I will say when I talked to them, they did do what they said they would, but they just wouldn't commit to much. Perhaps another settlement firm would have done better, but I felt for us, it was too late to find out.

Well, that's actually a standard complaint against the debt settlement industry, so while another one may have been better (or worse, for that matter) most likely it would've turned out exactly the same way. The FTC strongly advises the consumer to avoid these companies and do it on their own (watch the video). Perhaps you should file a complaint with the FTC also, as they are presently investigating the industry and suing companies left and right, on top of that many states are enacting debtor protection laws and suing companies that operate in their states - Colorado, for instance. There is no federal regulation of this industry, although there are attempts, especially the Uniform Debt Management Services Act, which is pretty much what the states (11 so far) are enacting. This is mainly because it is largely a new industry, the vast majority of these companies opening within the last 5 years. See also the National Law Center's "An Investigation of Debt Settlement Companies: An Unsettling Business for Consumers".

Eye opening stuff. Especially the chapter entitled "The Industry’s 'Ideal' Customers Are the Least Likely to Benefit". Did you know that, according to an investigative report during FTC's lawsuit against the National Consumer Council (a debt settlement company that the FTC closed - see "http://www.consumeraffairs.com/news04/national_consumer.html") stated that only 1.4% of consumers complete a DS program after enrolling? Most are eventually forced into bankruptcy anyway, and that after their credit report has been ripped to shreds, and after bravely trying to be responsible. Most (of those still on time with their payments) would benefit from Debt Management instead but that makes for a lot less profit for these greedy companies who will happily shoehorn the hapless debtor into a much more expensive (and dangerous) Debt Settlement.

BK 13 is basically debt settlement, but with strong consumer protections attached, and a clean slate when complete. Not to mention, no 1099s! It's easier to build your credit score up from the ground when it's all cleared out than when you have to comb through the wreckage first.

With the non-profits, the IRS has much more power of enforcement than the FTC. The IRS has removed many non-profit statuses from deceptive companies who are for profit in all but name. This is a list of recent non-profit status revocations.

Oh, and that article quoted in the post above is from a debt settlement company. The 30 year spiel is highly deceptive.

Like bottom feeder debt buyer firms, these companies rely on consumer ignorance. Many are foreign companies with little to no practical knowledge of US law. Many of them don't really care at all. After all, even if they get closed down and charged fines it will take years for that process and in the meanwhile they would have raked in millions and can just pop up in another guise or with another name and do it all again, like those annoying gophers on your front lawn.

So what to do? Fight! Keep fighting! Arm yourself with the knowledge of law that is required for survival in an ostensibly free country.

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"It is the common fate of the indolent to see their rights become a prey to the active. The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt." - John Philpot Curran

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Thanks Chrys. That post above, when I read it the other day, I took it for exactly that, a post from a settlement company. I already know that pretty much the only way it's going to take 30 yrs to pay off a card is if you keep charging it back up again, even if you pay minimum, it will take a long time, and cost you, but not 30 yrs. I may go ahead and file something with the FTC, these companies are running rampant out there, making all kinds of claims, and not delivering much for most people except grief.

Good stuff Chrys, good stuff here that you explained. Found the links and video quite enjoyable.

GREAT post Chrys!!

I am glad the FTC put that page together.

I will disagree on one point.
Chapter 13.

I believe settlement to be a far better option than chapter 13 for the vast majority of people forced to consider the 2 side by side.
The number one reason is flexibility. Chapter 13 provides NONE!

Historically chapter 13 has a 70% failure rate.

Chapter 7 trumps all.

My opinion... mileage may vary

Well....

1) Thanks!

2) It Ain't Necessarily So.... There is more flexibility than you think, it's main purpose is to take every bit of available income and pay down your debt as fast as possible. In fact, I just did a post on it here. Converting a Ch 13 to a 7. Plus, you can go back and forth with the courts to work out a plan by submitting an alternate plan and seeing if they will accept it.

Chapter 7 is hard to get these days, however, many times a Chapter 13 will cause undue hardship (based on large payment amount and limited income) which could sound bad to begin with, but could allow that person to convert to a 7 even if they were not eligible to file for a 7 to begin with.

and 3) Debt Settlement, per the above investigation, has a 98% failure rate, so I will stick with the 13 as the better option. That, combined with the Automatic Stay make it a better option for larger amounts of debt. If you only have a few thousand in debts, then 13 may be overkill, but other than that, is a better option, especially if you have a good chance of being sued. A judgment can stay on your credit report as long - or longer, depending on your state - as bankruptcy. Also, with a judgment, they can garnish your wages and tax refunds. Not to mention, in the first few months after discharge you will get many pre-approved offers for new credit so you can re-build your credit score much faster. Given the choice, it's better to voluntarily mow the lawn than have the state clean up your yard for you.

Chrys,
It appears we will have to agree to disagree. I do wish to further this a tad though.

Chapter 7 numbers nationally have increased year over year since BACPA was enacted in October 05. Chapter 7 is as available as it ever was. It just has a few initial hurdles attached to it now. Dont get me wrong, the changes were a bad idea then, and an even worse idea now (with the current economy). Lobbyists worked hard and spent tons of money to get the changes and misrepresented the need for it through manipulation of survey data etc... Kind of like you did above in your post where you say settlement has a 98% failure rate. Your reference and the citation you provided do not conform to backing up your statement/question (you ended with a ?). I was unable to find that reference in your links and url's. In point 3) of your most recent post in this thread you state 98% failure as fact (or near enough so). My many conversations with regulators, consumer advocates, legislative directors and activists have made it abundantly clear that there is a huge lack of analytics on success rates with settlement as the companies providing the services are not volunteering the data necessary to formulate percentage "guestimates". Anyone publishing data along these lines would fall well short of reliable unless it were perhaps specific to a company. This may indeed be the case with regard to the company referenced above. This company was targeted as a scam so, a poor completion rate would not be surprising. Regardless of my symantics on this, I will agree with you that completion rates at many companies in the industry are poor, just not that poor. In my opinion, the broad brush you used of the industry having a 98% failure rate is sensationalism.

I am not an apologist for the settlement industry. I am in fact, an outspoken critic of it. Not settlement itself, but many of the companies and sales groups associated with it. I also work in the field and have for longer than most. I strongly advocate consumers do as much, if not all settlements themselves. There are instances though, where a consumer would be better served working with an experienced negotiator.

Chapter 13 is a dibilitating experience on many levels. I do agree that the automatic stay would be of benefit, but when being sued as that is what it is pertaining to. If a consumer can get relief in a chapter 13, go for it! As with many things in life, there is no one size fits all answer. Research your options, know the short and long term implications of each and choose the path that best fits your needs.
Chapter 13 is a court enforced belt tightening experience. If a consumer can commit and follow through with a self induced belt tightening, my opinion and experience shows most would be better off.

Chapter 13's do not just get to convert to chapter 7. Unless the dynamics of what forced the use of 13 over 7 change. Loss of income being the norm, where the consumer would then be able to qualify under the means test to convert to a 7.

My opinion. Mileage may vary.