'Debt Consolidation' Scams in Missouri and Illinois

‘Debt Consolidation Companies’ are organizations whose purpose is to reach some sort of settlement with an individual’s creditors (such as St. Louis credit card companies and hospitals).  This settlement is supposed to be beneficial to the individual, in that the monthly amount of all bills is aggregated into one consolidated payment (a payment that is hopefully lower than what an individual is currently paying per month).  This is how the organization is presented to the consumer, and there have been several hundred thousand people who have taken part in its plan since 2008 (when the economy started its precipitous downturn).

However, what has emerged over the years has not been encouraging.  In fact, the Attorney General of most states across the union have filed suit against these companies for having engaged in consumer fraud.  The scam seems to work as follows:  you are told that the debts are going to be consolidated into a small, manageable monthly payment; that you will no longer have to make individual monthly payments to the various creditors you are currently dealing with any longer; that the consolidation company will work out a settlement with your creditors; and that you should use their services instead doing anything else (like filing for bankruptcy).  This sounds reasonable enough on the surface.  But what ends up happening is something quite different.  What you are not made aware of is that the monthly payments being made to the consolidation company are not distributed to your creditors.  Instead, these monthly payments are put into the pocket of the debt consolidation company itself (and the creditors never get a dime).  By the time you learn what is happening (because your creditors start calling you every day wondering where their money is), the consolidation company has made off with thousands of your hard-earned dollars.  The company justifies taking the money you have been paying each month by referring to it as their ‘fees’ for handling your case. 

This scam has been pulled on many good people over the last several years, and state-level action has been taken against them.  But these types of companies still exist, and they are willing to take advantage of people who are suffering from difficult financial situations.  If you have been a victim of this type of action, we would be more than happy to talk to you about your range of options.  The affordable St. Louis bankruptcy attorneys at Brinkman & Alter, LLC have been helping people rebuild their financial standing for years.  Our goal is to put you back on the road towards economic health, and get you the fresh start / clean slate you deserve.  Whether you file a St. Louis Chapter 7 bankruptcy, or a St. Louis Chapter 13 bankruptcy, we will help guide you through each step of the process.  

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