Debt Settlement Company Files Bankruptcy, Leaves Consumers in the Lurch

The debt settlement company, Debt Relief USA of Addison, TX, which several of my clients have had the unfortunate experience of signing up with, filed for Chapter 11 bankruptcy relief today in Dallas with about $5 million in debts owed to thousands of consumer debtors it was supposed to be helping.  They took in payments from consumers and were supposed to be negotiating and settling debts.  The company was being investigated by the Federal Trade Commission and Attorneys General in several states.

This illustrates why the Kansas Legislature saw fit to outlaw debt settlement in Kansas except by licensed Kansas attorneys as part of their private law practice.  Debt settlement companies you find on the Internet or television advertising are not a viable alternative for resolving your financial problems.  Read good advice from my colleagues on the Bankruptcy Law Network, Wendell Sherk‘s “nine questions to ask a debt negotiator” and Steve Otto’s “billed as bankruptcy alternative, but are they really?”

About Jill Michaux

Jill Michaux is a Kansas bankruptcy attorney. She can be found on Google+. She and her partner, Mark Neis, are Topeka's only board certified consumer bankruptcy law specialists.