West Virginia Halts Debt Settlement Firms

West Virginia is cracking down on some companies offering big debt relief, but few results.

The state’s attorney general launched a probe of several debt settlement companies contacting residents.

Debt settlement or debt negotiation are often used by people with serious credit card debt who can’t make bankruptcy work. For example, if you already filed Chapter 7 bankruptcy once in the last 10 years, you may not be eligible to file again.

But debt settlement does work for many people. That is, when it’s done properly.

But the following the investigation, several of these companies are offering cash settlements to consumers and will stop operating in the state, ConsumerAffairs.com is reporting.

Clear Financial Solutions, Financial Freedom and Financial Solutions Legal Center will pay more than $214,000 to 226 residents. In many cases, these companies put charges on consumers’ credit cards without providing a service.

This is a reminder that you should do your homework before committing to a debt relief plan. Also, keep in mind that bankruptcy is a secured legal action, but a private company may not be held to the same standards.

Also, if a debt settlement agency charged you without providing services you may have some recourse. The complaint in West Virginia was started by consumers.