Laughing Too Hard to Title This

July 30, 2004 · 1 comment

Debt counselor, AmeriDebt, filed for Chapter 11 bankruptcy protection on June 5. See the full story here.
Now why’d they go and do that? For a low consultation fee, I could have worked them out a nice schedule with their creditors to help reduce their monthly payments, avoid an embarassing bankruptcy that will ruin their credit rating, and help them on their way to financial recovery!
Doesn’t it seem ironic that a firm set up to help clients avoid bankruptcy would… well… declare bankruptcy? Or maybe it’s just me.
I HATE companies that prey on people with financial problems. I’ve been there. You feel desperate and helpless. Then you have a company come in and offer you a lifeline — sometimes it’s those “Get a secured credit card to reestablish your credit” schemes… or “consolidate your debt and get lower monthly payments” (while not mentioning you’ll be paying a higher interest rate and for a longer period of time)…
But what Ameridebt did was morally reprehensible also. Ameridebt claimed that it was a non-profit organization and that their initial fee was actually part of a client’s debt-reduction payment to creditors, when in reality, it went to Ameridebt… to the tune of hundreds of thousands of dollars. Taking advantage of people when they were at their lowest.
Shame on ‘em.
I think their bankruptcy judge ought to make the Ameridebt board of directors provide their home, work, and cell phone numbers to all Ameridebt customers.. so they can contact the board members mercilessly to demand their initial fees back. Let THEM see how it feels.

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{ 1 comment… read it below or add one }

Chelle July 30, 2004 at 6:25 pm

Just so you know… I’m in a debt consolidation program, and they ARE nonprofit companies. I did some research and checked out a few companies’ annual statements before I committed to one. Their primary source of income is the voluntary monthly contribution, and if you can’t pay it, they can’t force you. I haven’t heard of one that charges an initial fee, but I am sure they exist.
My payments are at a MUCH lower interest rate, and are about 1/10 of what my payments used to be. I understand your frustration, but I also know the right side of debt counselors and consolidators.


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