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Bankruptcy protection can help consumers avoid scams

For Maryland residents who are having serious financial troubles, the need for debt relief can be pronounced. Many people will go to great lengths to extricate themselves from financial strife, including signing on for questionable debt settlement offers. News of a recent federal court ruling against one such company may leave many consumers considering bankruptcy protection as a means of avoiding similar scams.

The Federal Trade Commission imposed a $7.9 million judgment on the owner of DebtPro 123, a company that offered debt settlement and credit repair to consumers. After an investigation into the company's practices, it was discovered that DebtPro collected up-front fees before services were rendered. This should always be a red flag to consumers.

In addition, DebtPro collected significant monthly fees from clients. In many cases, no payments were made on those debts until the creditors threatened lawsuits. Clients were told to cease all communication with creditors, and were often unaware that their debts were not being paid until it was too late. Many were left in worse financial shape than when they began.

The recent judgment will force the owner of DebtPro 123 to hand over nearly $8 million, which will be used to fund an account that will give those funds back to some of the people victimized by the scam. For those in Maryland who would like to avoid falling prey to a similar scheme, it may be time to consider if bankruptcy protection offers a better (and safer) debt relief option. Bankruptcy is not a process that anyone enters lightly, but it does offer a relatively quick and simple path out of high levels of consumer debt. 

Source: consumerist.com, "Operator Of Bogus Debt-Relief Scheme Must Return $7.9M To Harmed Consumers", Ashlee Kieler, Oct. 5, 2015

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