A lawsuit filed on May 20, 2009 by the Texas Attorney General names as a defendant a Louisville-based business, HABR, LLC, which does business as Debtor Solution. The lawsuit states in part:
“…representations and promises made by Debtor Solution…are often false, or at best misleading, and contain several material omissions regarding Defendant’s…debt settlement program.”
DebtorSolution currently has an "F" rating with the Better Business Bureau, as stated in the company's BBB Reliability Report. The company's website includes the Better Business Bureau logo although the company has never been a BBB Accredited business and was never authorized to use the BBB logo. False claims about the company's BBB affiliation are cited in the Texas Attorney General's lawsuit.
According to the lawsuit, HABR, LLC was established in March 2007 and operates in Texas and throughout the United States under the assumed name “Debtor Solution.” The Louisville business is one of four debt settlement companies targeted in separate lawsuits filed by the Texas Attorney General. CLICK HERE for a copy of the lawsuit against Debtor Solutions.
According to a news release from the Texas Attorney General, the four companies are charged with “orchestrating fraudulent debt settlement schemes…(which) unlawfully misrepresented and overstated the nature of their services.”
Keep in mind that allegations contained in a lawsuit have not yet been proven in court and that a lawsuit gives one side of the case.
Consumers contact the BBB on a daily basis to inquire about firms that say they can help renegotiate a mortgage or settle credit card debts for a fraction of the total debt. The BBB frequently finds that:
- These companies often charge substantial fees and want payment in advance.
- The companies often make promises that cannot be fulfilled.
- Consumers are frequently misled about the impact of debt negotiation or debt settlement on their credit score.
- The negative effects of debt relief through bankruptcy may be exaggerated to make their debt negotiation services seem more appealing.
Both debt settlement and bankruptcy have undesirable consequences. In certain situations, seeking relief through the bankruptcy courts is a better option than relying on a debt settlement business. Unethical debt settlement businesses too often mislead consumers regarding such decisions.
In Kentucky, debt settlement firms are required by the Kentucky Debt Adjusting law to register with the Kentucky Attorney General. The BBB is receiving numerous inquiries from Kentucky consumers about firms offering debt settlement or debt negotiation services. However, many of these companies are not registered as required by the Kentucky statute. CLICK HERE for a list of registered debt adjusting firms which are registered with the Kentucky Attorney General.
For consumers struggling with debt, the Federal Trade Commission and Better Business Bureau offer excellent information to help consumers in make sound decisions. Knee Deep In Debt is a good place to start for anyone trying to develop a plan of action for dealing with a pile of debt.