J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

 I've seen this happen before, a debt settlement company going bust. It seems to be happening more often. Our Texas Attorney General is going after restitution from a "Debt Settlement" company in Bankruptcy Court. In this particular one, it is "Debt Relief USA." I don't recommend "debt settlement" companies.

But if you are going to use one, at least choose one that is properly registered and operating legally in Texas. They have to put up a bond, for one thing! For a list of the ones that are legally operating, go to the website of the Texas Consumer Credit Commissioner click on Search for "Debt Management Service Providers."

Those are the only ones that can legally settle debts in Texas, besides attorneys. And of course you can settle your own debts, but it can be tricky. Don't forget that if you settle a debt for less than what is owed, the company will likely send a 1099 to the IRS and you may have to pay tax on the amount that they forgave. This is not true if you file bankruptcy; there is no tax problem if you file bankruptcy.

We also do debt settlements for a few clients, if it is feasible in the particular case. But we charge reasonable fees, and we make sure that you understand all the pros and cons. Call the office at 713-772-8037 for an appointment.

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