Legal Question in Credit and Debt Law in Georgia
I've been working hard to pay off my credit card debts and am going through a third party to manage them.
I was recently under the impression that I had paid off a certain credit card just a few weeks ago. I was notified that the creditor filed a suit against me for my delinquency in payment. Upon speaking with my debt consolidator, they informed me that they were putting that money ($2,000 over the past 10 months) into an IRA instead of paying off my creditors. They said they would close the account and use the money to help pay off the appropriate card. The only problem is that there was less than $150 in that account, the rest of the money they say went towards the lawyer fees for the suit against me.
I reviewed the contract with the consolidator and nowhere in it does it say anything about my money going to an IRA and I feel this is a breach of contract. They have been a huge headache for me the past few weeks, not to mention the hit to my credit score. Is there anything I can do?
2 Answers from Attorneys
Most debt consolidators are either scams or a disaster and it is a huge mistake to use them. (There are a handful of real ones - in metro Atlanta that real one is Consumer Credit Counseling of Atlanta).
Instead of continuing on this path, see a lawyer. A lawyer can advise you on your options, which, omce there is a suit, usually include bankruptcy. They may also include a referral to real credit counseling rather than with the scam you are in (it is a scam as no one can set up an IRA for you without your paperwork and consent, so be aware you are possibly dealing with criminals).
Consult with a local attorney. You may have a claim against the consolidator, but the agreement between you and the consolidator needs to be reviewed.
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