Madigan introduces bill to limit debt settlement companies

01/31/2010

The attorney general for Illinois recently introduced legislation that limits debt settlement companies that require upfront fees for their services.

Lisa Madigan presented the bill to state lawmakers in an attempt to help consumers who are facing increasing credit card debt and the potentially false promises of debt settlement companies.

"Consumers seldom, if ever, see all their debts settled when they enroll with these types of programs," Madigan said, adding that many consumers may end up owing more than they originally did before entering into debt settlement programs.

The law would ban debt settlement companies from charging monthly or upfront fees. It would also cap fees at 5 percent of what the consumer saved from debt settlement, rather than the amount of debt they were in when they entered the program.

Companies that don't follow those, and other, guidelines would be barred from operating in the state.

Madigan is not alone when it comes to focusing on the potential dangers associated with debt settlement. Attorney generals in other states have also given warnings to their citizens that they may end up further in debt.

More Debt Settlement News

08-02-2010

If counseling and bankruptcy won't fit, debt settlement may be an option

07-30-2010

U.S. Courts offer bankruptcy comparison map

07-27-2010

Debt settlement with lump sum may help with overdue bills

07-26-2010

Debt settlement may act as alternative to bankruptcy, although other options also exist

06-29-2010

IRS may come calling after debt settlement

06-28-2010

Debt settlement may present its own financial challenges

06-26-2010

Debt settlement companies face new rules in Indiana

06-21-2010

Debt settlement may provide a better alternative to bankruptcy

06-09-2010

Debt settlement association urges Quinn to veto bill

06-06-2010

Bankruptcies see varied results, while consumers may consider other options

Related Resources