Changes expected in the debt settlement industry

The debt settlement industry is going to have major changes (reform) in the coming months. Essentially, you can say goodbye to about 90% or more of the existing debt settlement companies. DS company employees should start looking for new jobs asap... it's only a matter of time.

Wishul thinking from a collector?

Any documentation or source quotes?

I need information on Liberty Settlement.
Is it Up and Up or a scam !

gov. cuomo supeoned many of the top ones and is starting a big investigation. just google it, it was an article in a ny paper

I'm not a collector but an owner of a DS Company. Insider info tells me a radical change in the next 10 to 18 months. AG Cuomo is part of it and simply gathering his discovery. Put it this way, no company gets subpoenaed by an AG and survives. There are also non governmental group lobbyists putting a Bill together that will only allow a DS company to charge $400 per client or 4% of the total debt, or whichever is less. There are only a handful of DS companies that can absorb this change and survive. It happened to the CCCS industry, now it's the DS industry's turn. No one can disagree that the DS industry in the Wild West and needs reform. This is my fair warning not to keep all your eggs in one basket. Start looking for other opp’s on the side…

OK...but what about the other 49 states?

This Bill will not be state specific but NATIONWIDE... just like CCCS

another post of BS by a humanoid.i love how they tell you to look it up.give us a link if it is legit.never hear anything of the kind until now.

I am with Halo and have been with them three months B of A wants to settle already and there are no funds because Halo gets paid first...B of A will settle for 50%. I am seeing where people can hold out for as low as 17% but if I pay Halo and then how am I going to pay any creditor? I asked Halo if I could do bankruptcy is I get sued by one of these company's and they said they would not allow me to do so because I am signed with Halo...is this true do they own me for the whold 3 years or can I opt out when I want? How am I going to put creditors who want 50% of $15,000 in four payments and pay Halo if that were a possibility then I would have done it my self..which is exactly what I have told Halo but no answer from them yet. HELP SOMEONE PLEASE!

So they'll go offshore or pretend to be Indian tribes . . . just like payday lenders do.

Or they'll pretend to be law firms like Lexington Law does with credit repair or {self-deleting before the Mods jump in and erase/lock the thread} already does for debt settlement.

I have discussed this in some detail on this thread. The particular post of this link is to the Testimony to the House for HR2309 - The Consumer Credit and Debt Protection Act.

So yes, they will need to reform or die. The FTC and the State Attorney Generals have received a lot of complaints about DS companies and others like it that are taking advantage of the flailing economy.

The legitimate and honest ones have nothing to fear.

And the new Legislation will make it even easier to close down law firms because an attorney can be easily disbarred for disobeying the law, or at the very least will have a nice black mark on their Bar records that will follow them around like a crazed pekingese.

I find it doubtful that your negotiating company has any say regarding bankruptcy. In fact, if anything, I would think a bankruptcy judge might order the negotiating company to return some of the money (to the court) they have collected from you.

Hardly. The market is huge right now and is going to get even bigger in the short term. The fight is not against the method or the companies themselves - anymore than payday loans, junk debt buyers, collection agencies, or credit counselors, etc. etc. The fight is with those who would be dishonest with the customers and those that would rip people off.

Period. Lie to people and mislead them and you go down. Simple as that.

Bill aims to regulate debt settlement firms, protect consumers

12:00 AM CDT on Monday, April 13, 2009

PAMELA YIP

Debt settlement companies, which have grown by leaps and bounds, are the target of proposed legislation that would set strict rules on how they operate.

These companies typically negotiate with a consumer's creditors to settle debt for less than what's owed. Financially distressed consumers have flocked to them.

But regulators have accused some debt settlement companies of unfair and deceptive practices.

Most recently, Texas Attorney General Greg Abbott sued Credit Solutions of America Inc. in Richardson, accusing it of defrauding Texans by failing to negotiate settlements with its customers' creditors.

Credit Solutions officials said they're committed to customer satisfaction and aim to reach an "acceptable resolution" with Abbott's office.

Regulation of this industry is scarce. Although the Federal Trade Commission held a workshop on debt settlement companies last year, it hasn't proposed a law.

So a nongovernment entity has stepped forward.

The National Conference of Commissioners on Uniform State Laws has put forth the Uniform Debt Management Services Act, which gives states guidance on the regulation of the consumer-debt management industry.

The Chicago-based group's legislation would require debt settlement companies to:

• Register with states. (It also would mandate that each state appoint an agency to administer registration.)

• Give consumers a list of goods and services to be provided and charges for each.

• Tell consumers the fact that defaulting on debts can lead to lower credit scores and increased charges.

The bill would allow debt-settlement companies to charge a set-up fee of no more than $400 or 4 percent of the client's debt, whichever is less, and to charge monthly service fees of no more than $50.

Debt settlement firms also would have to obtain $250,000 of insurance to protect against the risks of "dishonesty, fraud, theft and other misconduct on the part of an employee or agent of the provider."

The proposed law is being sponsored in Texas by state Sen. Kevin Eltife, R-Tyler.

"Particularly in light of this economy, I feel this consumer protection is necessary," he said.

Michael Kerr, legislative director of the commissioners group, said, "Texas is a key state," because many debt settlement companies do business in the state.

In fact, Texas, California and Florida have the highest concentration of debt settlement companies, according to the Association of Settlement Companies, an industry trade group.

"Reports of abuse by debt settlement companies have risen in frequency over the years, particularly against for-profit debt settlement entities," Kerr said. "Because most states do not currently regulate for-profit debt settlement companies, it is difficult to obtain concrete data on fees, success rates, and settlement outcomes."

Debt-settlement industry officials say they support the proposed statute.

"There are companies out there that are not really doing a good job at representing the consumers whom they sign up, and we think that does give the rest of us a black eye," said Wesley K. Young, a member of the executive board of the Association of Settlement Companies. He's also general counsel of American Debt Exchange Inc., a Dallas debt-settlement firm.

The bottom line for consumers? There's no easy way to get out of debt. It takes discipline, sacrifice and a laser-like focus on your goal to be debt-free.

dallasnews.com/sharedcontent/dws/bus/columnists/pyip/stories/DN-moneytalk_13bus.ART.State.Edition1.4a6766b.html