Hired a debt settlement company and got sued – what now?
I received a summons for 2 of my Wells Fargo accounts. I started with a debt settlement company in February. I am told they are going to try to settle these accounts so we don't have to go to court. I have asked this debt settlement company if i should contact a lawyer and now they will not give me any advice only say to call back in 5 days and they will send me a packet in 10 days.
I was told I have to answer this summons/complaint but they don't have a form. I was told to contact county court and they don't have forms. I don't qualify for legal aid advice since both accounts are 12, 000.00. I do not know where to turn to since I do not have any money for a lawyer and I don't want my wages garnished. I believed this debt settlement company was a better choice than bankruptcy but I still couldn't afford it. I appreciate any response.
What do I do next?
—Michelle
I have some questions about the debt settlement company you hired and the timing of all that has transpired. You can answer those questions in the comment box below.
Debt Settlement Company Questions
My immediate answers are going to be more of a benefit to later readers of this page who may be considering hiring the typical debt negotiation firm, but will also help me offer you more foundational feedback about what you do next, and how to navigate the lawsuits with Wells Fargo.
- When you hired the settlement company, were you still current with your credit card payments?
- If you were not current, how many months late were you?
- Debt settlement companies generally have you deposit a set amount of money in escrow each month to save up and pay the deals they get. What amount have you been putting in escrow each month? What is the total amount you have in your account now?
- Do you have other debts than these 2 accounts you are being sued on? If so, who with and what are the balances?
- What were your settlements originally estimated to be by the debt settlement rep you spoke with?
- What amount of fees are you supposed to pay for the service? Are any of those fees already paid?
- What is the name of the debt settlement company you hired?
Answering the above questions will help me to give you much more than general feedback. I will also be able to make some comparisons of your remaining options to handle the situation, and the affordability of each path.
Debt Negotiations When You Have Been Sued
You do have options to manage your way through being sued for a debt. I know your intention was to settle earlier, but you still can after being sued. Which direction you go from here will be affected by who owns the debt, who is suing, your cash flow, and the best way to handle the accounts that are in the court.
Wells Fargo does sell debt to debt buyers. Those debt buyers do use the courts to collect. Each debt buyer will handle the deals they are willing to accept when settling accounts before and after suing. Are your Wells Fargo accounts sold? What is the name of the plaintiff on the lawsuit? What is the name of the attorney suing?
Filing an answer with general denials at this point will preserve your options and buy you some time to regroup and make some informed decisions. You mentioned you do not have money to hire an attorney. But you should at least consult with an experienced debt collection defense attorney. The consult is generally free, and you will be far better prepared to make some informed decisions afterward. You may still be able to avoid filing bankruptcy. But it is not going to be as simple as hiring a debt settlement company and leaving it to them at this point.
I can help you locate the type of attorney you will want to speak with in your area. Post the name of a larger city near you along with your answers to my questions. I will email contact information to you.
What you do next is going to be based on comparing your remaining options, the costs, your income, and personal financial goals right now and looking forward 2 years.
Post in the comments below and lets go from there. Anyone dealing with a similar situation is welcome to participate in the comments for feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
Hi Michael,
I went through Citadel Documents Solutions
5 years ago. They guaranteed me that although my credit would be bad in the beginning, at the end of the year it would be good! I paid them over $5,000 in monthly payments, and at the end of the year my credit was in not much better shape than it was to begin with, and I have never been able to reach them by phone.
I tried email, when I began to receive statements from two of the credit cards, and their reply was that they had already completed their case with me.
One of the credit cards offered me a very good deal, of dropping the amount to almost nothing, and paying that in 3 monthly payments of slightly over $187n. I took the offer and they gave me a fairly good credit report.
Now, after 5 years I still have only fair credit, and CAVALRY SPV I, LLC Assignee of CITIBANK, N.A. has just this morning filed a lawsuit (citation) against me, and I’m supposed to answer w/in 14 days. They’re demanding $5197.66 plus attorney’s fees and court costs. I’m now a senior citizen, retired, with a monthly income of my Social Security $913 and Retirement $384.51, so clearly I can’t afford this. Do I really need to appear? Do I need to hire an attorney? I live in the State of Texas; if I lose this, will I actually have to pay, or will it just show as a judgment against me. That would still be bad, because I wouldn’t be able to leave my house to my children when I pass away, or get a Reverse Mortgage, which is something I’ve been considering.
Thank you, Michael!
Patricia Schultz
What is the total of all the debts you have combined? Be sure to include the ones you thought that company handled.
I am currently experiencing this with Americor. I had three accounts Discovery, Chase and American Express. I was told to make “X” amount of payments and down the road I will be debt free. The Chase account was settled, nothing on the American Express account and they have added almost $500 to the balance since I started. Discovery was a larger account and they added over $900 since I started and filed a suit. Working with Americor they were able to reach a settlement and stop the suit but it amounted to me paying practically the original amount with a time restraint. If I had know this ahead of time I certainly would not have gone this route.
I am currently in the same situation with Americor, I have since canceled my service from them 3 days ago, I was told I would receive Cancellation Notice within 24-48 hours, and I have not received it. This debt collector has lied about the settlement total, and took their own portion out for themselves, yet I have to file a tax statement saying a larger amount was forgiven. I am being sued 2 times by citi bank, different cards. I want to work directly with my creditors as Americor has been stealing my money during a pandemic, but the companies will not talk to me until I get a confirmation that i have canceled their services. Can I sue, Americor? How can I sue?
Talk with an experienced consumer law attorney in your state about your options.
What is going on with the Citibank lawsuits?
I do not think it would be worth hiring an attorney, cost vs how much Americor took out. I just need confirmation I have canceled their services to directly make the negotiations myself!
I was served around 5 or 6 pm on a Friday before a 3 day weekend (MLK) stating I had 14 days to appear in court and would have to pay full amounts including interest accumulated. When I called the collection agency for information, they told me they cannot discuss is with me only Americor.
Look for the cancellation policy in your agreement, or call Americor to cancel.
You can ask them their policy for rescinding the power of attorney they have, and ask them to expedite it too.
Looking for the cancelation policy I noticed the agreements says they cannot be sued or held responsible etc. Why are companies like this legal?
I still cannot get contact from them so I typed a letter of termination, requesting they do not make any demands on my behalf.
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My agreement says if I don’t pay my contract is canceled. They keep the money.
Who is your agreement with?
What is your agreement for?
I was served by Wells Fargo because of a credit card debt. I have been working with Freedom Debt Relief since August 2009. They told me in the beginning that they would contact all my creditors to negotiate. And just recently found out from one of their representative that they only handle one credit card debt at a time. They did not make any contact with Wells Fargo. Now I’ve been served by them. Is there anything I can do to settle my debt with them without this going to court or me receiving a judgment? Please let me know. I need help right away!!!
What is the balance on the Wells Fargo debt?
What was the date you were served?
What state are you in?
Just recently signed up with fdr have several credit card and unsecured loan totalling 63k I’m second guessing my decision. I live I. Ny and I’m worried about my bank account bei g frozen or check garnished or bei g sued can this happen they tell me no that ther are federal laws to protect us. Just not at ease with this any advice cards are
Chase
Syncroy
Pay pal
Home depot
Capital 1
Barclay
And u secure loan with pay off
Us bank
If you were told that you cannot be sued because federal laws protect you, that is untrue.
You are at risk of being sued when you stop paying creditors in order to later settle with them.
That said, you can dramatically reduce, or even eliminate the risk of being sued, by pulling money together as fast as possible in order to settle quicker, and by settling with the banks that sue more first.
If you want to get a full assessment of that risk you can schedule a phone consult with me here: https://calendly.com/debtbytes/15min
I am at a loss and in financial ruin because of signing up with Freedom Debt relief. Ive been making monthly payments of $1588 since august 2019. I am in quite a substantial amount of debt hence signing up for what I believed to be financial help. Ive been sued by Amex and have a pending lawsuit from Wells Fargo. I have tried to connect with FDR , however just get a brush offand told”this iswhat you signed up for”. Out of my 8 accounts, only 1has been settled, with no other accounts being addressed. I also had to pay extra for their legal department to represent me in the Amex suit. I have not received any communication since January.
I am completely stressed and physically ill because of the amount of financial and legal stress I now face. They were so misleading at the beginning. I have no where to turn to because My credit score now is in the toilet(my score was well over 700 even with all my debt) I never missed a payment before the but i was drowning trying to make ends meet. Now my credit score is in the toilet, with no end in sight.
Hi
I ended up filing chapter 7 bankruptcy
Nice! It is a way faster and much more affordable option than debt settlement for those who qualify for chapter 7.
Best of success to you with your fresh start!
Hello, I didn’t know if you are still active. My story is 14 accounts and very mind boggling. Suffice to say credit cards need much reform.
Still kicking. You are welcome to post the details and ask questions if you like.
I was scammed over 10,000 from a debt çonsoldation company Prime Solution is there a chance to recover
Hi. I am finding myself in a similar situation. I have been with FDR since February and have been making bi-weekly deposits. AmEx is suing me. It appears they sold my debt to Zwicker. I don’t know what to do next. I as well thought I was taking the right steps to get out of debt and following the instructions of my debt relief company only to find myself in the court system now. Could you please offer me suggestions of what steps to take? Refer me to experienced debt collection defense attorney in LA county? Thank you so much!
I need to serve someone that is enrolled with National Debt Relief. Can I just send it to NDR?
Single mother being sued by ex nanny for wage underpayment, 15k in cc debt, lawyers fees handling the law suit. No settlement has been judged. But she’s suing me for her lawyers fees. Condsidering bankruptcy.
Time sensitive.
Suing me personally, not business cas, but federal wage suit.
Have you consulted with an experienced bankruptcy attorney yet? Read this article about finding the right attorney if not, and then do that.
I am a poor disabled person on SS and 67 yrs old. I had 2 years ago consolidated my credit card debt with united debt relief company. I now need to pull out. They want more money, but i can’t afford to pay them anymore. They want $660 more. Says for their payment. They said I could pull out anytime.. Can they do anything to me?
What is the name of the debt relief company?
It’s almost a year now that I joined freedom settlement..they settled one of my credit cards and were working on settling with Bank of America..I received a notice from another consolidated attorney on top of the notice it said I was being sued..so I called freedom and they told me I would most probably be getting a summons soon..I’m completely freaked out and thought I was doing the right thing trying to pay everything off and now I’m worried that they will garnish my pay and I’m hardly making ends meet now..I’m not sure what to do and am wondering if I made a mistake going to freedom and if I’m just better off filing bankruptcy
Let’s talk about it.
Which account filed the law suit recently, and for how much?
What creditors do you still have left to settle and what are the balances on those?
What amount are you adding to your escrow account each month?
Hello . I was in here in hopes of useful information my husband and I could use the advice . We are going through the same and have no where to turn . We’d sincerely and greatly appreciate any help. Thanks in advance!!!
If you post the details of your situation I can often offer feedback that will help you navigate your debt collection situation.
I received a court summons regarding my Wells Fargo credit card. Before receiving the summons I enrolled in a debt repayment program and the first payment has gone through. The summons was sent through Zwicker and Associates out of Enfield, CT. The amount I owe is $11K.
I have no idea how to respond to this, this is completely new to me.
What steps do I take regarding this summons? Will they see that I am enrolled in a program to pay this debt off?
What is the debt settlement company you hired doing for you on this account?
When did you stop paying Wells Fargo?
If it were me I would want to defend the suit if I could not raise the money to settle now. That would buy me time.
Wells Fargo probably knows you are in a debt settlement program because the company you hired sent them a limited POA. That actually triggers aggressive collection actions in some situations. Being in the program will not stop collections from rolling forward.
Thank you for the response.
The company is Consumer’s Alliance. I fully intend on paying off the debt and take full responsibility. I guess I just am stuck on how to begin and how to respond to summons. Do I include the debt program I am enrolled in or will that make it worse? Is there any other specific information I should include in my response?
Also, I never received any phone calls from Wells Fargo but I knew I was in debt and was trying to get it paid down, which is why I went the route of the debt program. It wasn’t until after I was enrolled that I received the summons so now I feel completely stuck and terrified of doing something wrong or getting into more legal trouble.
Thank you again.
Talk to Consumer Alliance and find out what they offer to their customers that get sued. I would also talk to an experienced debt collection defense attorney in your state. I can email you a list if you like? What state are you in?
I am in CT, thank you.
Hello! I just got an offer from Debt relief company named ‘Macklock National Credit’ . It seems like they want me to pay them $720.00 monthly for credit monitorning , help repairing credit score, and dispute . I am not sure if this company is trustable and will help me to free my debt… At this point i have 11credit card and 1 personal loan. Total amount of debt is $33000.00. I am making every minimum payment but had 2,3times of late payment. My credit score is 495 .. Having hard time to make payment . Would you please adivse me if I should do settlement debt with this company named Macklock National credit? I could not find them in BBB… Please help me with this!
That is too much to pay for credit monitoring or repair, so the fee must be for disputing, which is typically not resolving debt. Can you describe what it is the company is offering to do when they dispute your debt?
I have a pending judgement that is going to court soon. Is there a way to settle with the company before it goes to court? My debt settlement company didn’t make much progress with them. Could I try to set up a payment plan or something to avoid garnishment or frozen account?
Who is the creditor that sued and what collection law firm are they using?
Yes, you can settle before a judgment is entered, and set up payments to avoid garnishment or bank account levy.
What other accounts are left to settle? Will you be able to stay on track with knocking any remaining accounts down?
I was working with Freedom Debt Relief on settling my debts. I was being sued by one of the creditors and FDR negotiated with the creditor on my behalf. When FDR called to discuss the settlement, they were very vague and told me that I had to quickly authorize the settlement. So I verbally authorized. When I actually read the paperwork, I realized that the only thing FDR did for me was work out a payment plan. The amount I owed wasn’t lower. It was actually higher. At this point, I realized that this was not suitable and declined the offer with a writen letter and felt that bankruptcy was the right choice for me. I never signed any of the documents, but they said I made a verbal agreement and now they will not return the $2800 that I paid into my settlement account. They said I verbally agreed to the
settlement and they are keeping the money for their work. Do I have a chance at getting my money back if I pursue this?
You may be able to escalate your concerns to management, or even outside of the company, in order to get a refund. I have always found Freedom Debt Relief to have reasonable management.
I enrolled in freedom debt relief last September, 2016. I have been late on all my credit cards since September when I enrolled in the program. I am $45000 in debt with credit cards and am
On 44 month program at $550 a month going into escrow. I found out that my discover was sent to an attorney but I have not received a summons. Do you think I should stay in this program or woul bankruptcy be a better option considering my situation?
I have 11 credit cards
If you can do chapter 7 bankruptcy than it is something to consult with an attorney about. If you can only do a chapter 13, it is often better to try settling first.
How much is the Discover card balance? Who are your other debts with and what are the balances?
I am kind of in the same boat as the one who asked a question.
After 3 years of paying a debt solutions company, I am being sued by Bank of America. They told me to stop paying and wait for the credit to go to a third party.
Then I am being sued now. What can i do?
Also, I have not received the summons but I received letters from lawyers that a case was filed. The debt solutions company I had been paying said that they will refund what I had paid for the Bank of America account once the summons is served. It is stressing me out as I am pregnant and about to give birth. Please help.
Also, do you think I should call the lawyer filing the case and try to settle with them instead? I have no idea how to do it though. This is my first time to ever have a case filed against me and it is terryfying. And stressful as I am about to pop and give birth.
I can coach you up to do that, or get you to an experienced collection defense attorney to buy you time (as in many months).
You can fill out the talk to Michael form in the right column Aggie. I will see that and email you in order to set up a time to talk on the phone and go over your situation and best options.
You will get through this.
How much are you being sued for? How much do you have saved up to pay a settlement as of right now? Which debt relief company did you hire?
I haven’t made a payment since about may 2013 discover card is suing me for 14500 it has been in court for 18 months or a little longer the company I hired to take care of my debt was a scam but they did retain a lawyer in my state to take care of the law suit but im afraid I might get a judgment against me for the full amount in the end most of the debt on the card is from fraudulent and or scam businesses charges that I disputed with them and late fees and interest
thank you for your time
vincent
Is your attorney taking up that angle on the fraud charges? Did you file a police report or identity theft affidavit when you learned of the unauthorized charges? Is your attorney preparing for trial? Is there a trial date set?
What state are you in?
I have not heard from the attorney she is not very good and getting back with me haven’t talked to her sine may of last year when I gave her the information I have called her several times and have not heard back from her so im not sure if she is using that angle or not no police report or affidavit was filled these were authorized charges but the businesses was scams and I didn’t get the services and products that I was promised and paid for as far as I know there is no trial date at least I haven’t been notified of one
im in the state of Indiana
thank you
Because you were connected with the attorney through a scam, it might be a good idea to get a second opinion on your situation from another attorney. I can email you a list of attorneys in Indiana with debt collection defense experience if you like?
yes that would be great what advice would you have about trying to do a settlement 0n my own with discover card or their attorney that they have hired to sue me