Debt Relief

December 21, 2008 9:00:00 PM PST
A Wake County woman looking for debt relief says she ended up with more financial problems. During these tough times, there are many people who want to pay their bills, but are too far behind to catch up. Some turn to debt reduction or resolution companies that offer relief from your creditors, but beware who you chose.“Be rid of your debt in a year.” That’s the sales pitch that a Knightdale woman says sounded great to her. She signed up with Consumer Law Associates, a Texas company she found online.

“They tell you to stop paying credit cards, don't talk to creditors. If they call, don't answer their calls," explained the woman.

Consumer Law Associates claim they can negotiate settlements with your creditors. Their local customer, who asked us not to use her name, paid them $200 up front and $400 a month. But after 6 months, she says her overall debt wasn't getting any smaller, because of what she was paying them.

“I thought 'This is ridiculous. What am I doing,'” she offered.

Once she read the fine print of her contract, she says she found out that none of the $2,157.35 she paid Consumer Law Associates so far had gone to her bills. Instead, the majority of just went to retainer and service fees.

“They just take your money, and they sit back,” she claimed.

The woman was eventually able to cancel her contract, and Consumer Law Associates refunded her $808.35 of the $2,157.35 she paid them. They also waived her termination fee of $199. But after Troubleshooter Diane Wilson contacted them, they actually took another look at her case, and refunded her the remainder of her enrollment fees - an additional $766.67.

The woman says she’s happy with this resolution. Consumer Law Associates told Eyewitness News they did nothing wrong in handling the woman’s case and provided services for her outlined in the contract.

Glendola Beasley says she's heard many stories from people looking for relief from their creditors. Beasley is with the Durham Region Community Development Group, a non-profit that offers debt counseling.

“I think it's very important these consumers know who they're working with prior to relinquishing their life. In essence, your credit information is who you are," she offered.

Beasley's first suggestion is to work with someone local, that you can meet face to face. With online companies, you might never know who you’re dealing with or what the company is really about.

Secondly, she says make sure the company is accredited.

“Those organizations have been scrutinized quite well to make sure high level of integrity and consumer's information and assets are protected,” she explained.

She says consumers can also go to HUD’s website to see the list of organizations by state that have gone through the certification process. Beasley also says to make a check on the company with the BBB and the state Attorney General’s Office. She also says high initiation and monthly fees should be a big red flag. She said $50 is the typical amount you should pay for the initial fee, and after that, $25 to $30.00 for monthly fees. Glendola also points out that there's no quick-fix out there. It typically takes 3 to 5 years to repay a debt thru a debt reduction company.

For more information on Durham Region Community Development Group, their web-site is www.drfcenter.org. Their number is (877) 684-2778 or (919) 688-3381.


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