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Wisconsin consumers caught up in illegal debt settlement scheme

When a company proposes to help consumers get out of debt, it is believed that company has a heart for helping the people. However, one particular company had a heart for helping itself and has allegedly taken advantage of many Wisconsin residents struggling with overwhelming debt. There is little doubt that some Appleton consumers were also victims.

According to court records, Legal Helpers Debt Resolution has allegedly victimized over 1,900 Wisconsin debtors in its illegal debt collection scheme. The Chicago-based company operated as a debt settlement company but consumers were charged an average of $500 to $900 in upfront fees and then paid a monthly fee ranging from $50-$75 for their services without getting the expected results. It was alleged that the company fraudulently portrayed itself as a law firm with attorneys negotiating settlements but that was not the case as most cases were handled by non-attorneys. The complaint also alleged that the company promised to negotiate and reduce debts, which it failed to do while charging hefty fees. For example, it was alleged that one debtor paid over $18,000 but never saw any debts resolved or negotiated.

The complaint also alleged that when consumers had a downward change in their financial situation, there was no discussion with an attorney to determine the necessity of modifying the payment plan or filing bankruptcy. Appleton consumers facing overwhelming debt can consult with a bankruptcy attorney to learn more about filing bankruptcy. A Chapter 7 bankruptcy can help consumers to eliminate debt. Another option available to Appleton consumers is filing a Chapter 128 which is a three year payment plan alternative where debts are paid off with little damage to the credit rating.

An Appleton bankruptcy attorney can help consumers determine if bankruptcy is right for them. A local bankruptcy attorney, as opposed to an out of state agency, can offer consumers more peace of mind, a real attorney working the case and a wider range of legal advice. Consumers who have been defrauded by a debt settlement agency can file a complaint with the Wisconsin Department of Financial Institutions.

Source:¬†JSOnline.com, “Wisconsin sues Chicago debt firm, alleges illegal fee collection,” Gitte Laasby, June 17, 2013

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