Managing Debt For Dummies
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Beware of debt settlement firms that may be out to fleece consumers in crisis. If you get taken by a disreputable credit counseling organization or by a debt settlement firm, contact a consumer law attorney right away.

The attorney will advise you of your rights. He may recommend sending a letter on his law firm stationery to the credit counseling organization or debt settlement firm threatening legal action unless the firm makes amends to you (such as by giving you your money back).

The credit counseling organization or debt settlement firm may agree to the attorney’s demands in order to avoid a lawsuit. If it does not respond or refuses to do what the letter asks, you can decide if you want to go forward with a lawsuit.

Assuming that you have a strong case, the attorney will probably represent you on a contingent fee basis. This means that you won’t have to pay the attorney any money to represent you. Instead, the attorney gambles that you will win your lawsuit, and the attorney will take his fee from the money that the court awards you as a result.

If you lose your lawsuit, you do not have to pay the attorney a fee. However, depending on your agreement with one another, win or lose, you may have to pay the attorney’s court costs and any other fees and expenses related to your case.

Regardless of whether you sue the credit counseling organization or debt settlement firm, you should file a complaint against it with your state attorney general’s office, your local Better Business Bureau, and the Federal Trade Commission (FTC). Although none of these organizations can help you get your money back or undo any damage to your credit history and your FICO score, other consumers who may be thinking about working with the same credit counseling agency or debt settlement firm may think twice after reading your complaint.

Also, if your state attorney general’s office or the FTC receives a lot of complaints about the credit counseling agency or debt settlement firm, it may take legal action against it. For example, it may file a class action lawsuit on behalf of everyone who was ripped off.

About This Article

This article is from the book:

About the book authors:

John Ventura: John is a best-selling author and a nationally boardcertified bankruptcy attorney. He is also an adjunct professor at the University of Houston Law School and the director of the Texas Consumer Complaint Center at the Law School.
As a young boy, John dreamed of becoming a Catholic priest so he could help everyday people, and he spent his high school years in a Catholic seminary. After graduating, however, John decided to achieve his dream by combining journalism with the law. Therefore, he earned an undergraduate degree in journalism and a law degree from the University of Houston Law School. Later, he and a partner established a law firm in Texas, building it into one of the most successful consumer bankruptcy firms in the state. He subsequently began a successful consumer law firm in South Texas.
Today, as Director of the Texas Consumer Complaint Center, he supervises law students as they help consumers with their legal problems. He is also a regular speaker at law conferences around the country and serves on the Bankruptcy Council for the Texas Bar Association.
John is the author of 13 books on consumer and small business legal matters, including Law For Dummies, 2nd edition; The Everyday Law Kit For Dummies; Divorce For Dummies, 2nd edition; and Good Advice for a Bad Economy (Berkeley Books). John has been interviewed about consumer money matters by numerous national media including CNN, NBC, NPR, Bloomberg Television & Radio, The Wall Street Journal, USA Today, Newsweek, Kiplinger’s Personal Finance, Money, Inc. Martha Stewart’s Living, Bottomline, Entrepreneur, Bankrate.com, CBSMarketWatch.com, and MSNMoney.com. In addition, his comments and advice have appeared in major newspapers around the country, and he has been a frequent guest on local radio programs.

Mary Reed: Mary Reed is a personal finance writer who has coauthored or ghostwritten numerous books on topics related to consumer money matters and legal rights. The books she has coauthored with John Ventura include The Everyday Law Kit for Dummies, Divorce For Dummies, and Good Advice for a Bad Economy (Berkeley Books). Mary has also written for the magazines Good Housekeeping, Home Office Computing, and Small Business Computing, and she has ghostwritten numerous articles that have appeared in national and local publications.
Mary is also the owner of Mary Reed Public Relations (MR•PR), an Austin, Texas-based firm that provides public relations services to a wide variety of clients, including authors, publishers, attorneys, financial planners, healthcare professionals, retailers, hotels, restaurants, and nonprofits.
Prior to starting her public relations business and writing career 20 years ago, she was vice president of marketing for a national market research firm, marketing director for a women’s healthcare organization, and public relations manager for Texas Monthly, a national award-winning magazine. She received her MBA from Boston University and her BA from Trinity University in Washington, DC.
In her free time, Mary serves on the board of a community development corporation in her neighborhood. She also enjoys long morning bike rides, road trips with her husband, gardening, working her way through the stack of books by her bed, taking care of her six cats, and spending time with her family and many friends.

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