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CalAttorney2
CalAttorney2, Attorney
Category: Legal
Satisfied Customers: 10238
Experience:  Civil litigation attorney for individuals and businesses.
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Anyways so I res Lexington Consumer Advocacy to consolidate

Customer Question

Anyways so I hires Lexington Consumer Advocacy to consolidate they 4 payday loans they continued to take their payments but would never tell me the status of the conversations with the companies, on 5/10/16 I finally found out they made four attempts to call them never rec'd a cb so I cancelled my account with as they did not comply with our contract. But they did send each of them a letter stating that they no longer represent me and now I am being sued by Mt Loan for over$1000.00 and for $817.00 for Speedy cash, they never did anything they agreed to do, please advise!
Submitted: 4 months ago.
Category: Legal
Customer: replied 4 months ago.
I am not sure if you got the whole picture I took out four payday loans, last fall due to my husband and i losing our jobs, and I repaid for as long as I could I was told that plain tree $1000.00 did not have to be pd back, and not to worry about the other 3 as the "typically never respond to a consolidation co" and then I find out the truth about this company they made 4 attempts to contact the pydy companies NEVER rec'd a call back and that was that..total fraud they did not even follow their own contract
Expert:  CalAttorney2 replied 4 months ago.

Dear Customer,

Thank you for using our forum. My name is ***** ***** I hope to assist you today.

Unfortunately this kind of scam is very common (see: https://www.consumer.ftc.gov/articles/0225-credit-repair-scams), and while there are many variations on the scam, the basic idea is that the consumer is led to believe that their debts are being dealt with (often sending money to the debt consolidation company) while the fact of the matter is that the loans are going into defaualt and the creditors may sue the borrower.

As between you and your 4 creditors, you still owe the money as agreed - and unless you reach a payment agreement (such as the $25/month one you referenced above) you will need to pay the debt in full in order to clear this debt from your credit history. (Some creditors will remove the negative entries for non-payment from your credit history due to the consumer being scammed in this nature, but they have no obligation to do so).
I would recommend that you get any payment agreement in writing.

The advice you received from the local attorney (file bankruptcy) is probably the most accurate way to deal with all of the loans you took out together (so it isn't bad advice as far as that goes, but it probably doesn't help as far as reaching your goal of purchasing a home in the next 12 months - although long term a bankruptcy is not as bad as most people think for their credit when compared with unpaid debts).

Without filing bankruptcy, or without reaching a settlement agreement, your creditors can continue to report your loans as being in default (so there will be "non-payments" listed on your credit report, and they have the option of suing you for breach of contract.

With regard to the credit reporting company (the fraudulent ones that tried to scam you into believing they were dealing with your debt). You can do 2 things:

  1. Report them to the state attorney general's office (See: http://attorneygeneral.delaware.gov/fraud/cpu/complaint.shtml), this does not recover any money for you, but the AG's office can take regulatory action and criminal enforcement against the company - hopefully protecitng other citizens/consumers and punishing the company/individuals for their actions.
  2. You can sue the company for breach of contract and fraud. The measure of your damages would be calculated based on your position if they had performed their contract as agreed (so how much you would have had to pay if they had performed as agreed) as compared to your position based on their failure to perform (so the added costs of you having to settle your loans without their performance). The court may award additional "punitive damages" - but do not rely on these additional damages when calculating whether or not it is worthwhile to file your lawsuit.
Customer: replied 4 months ago.
Thank your advise is very helpful and I am so happy you and so angry with this other company I think I will go forward in suing them for breaking our contractual agreement !
Expert:  CalAttorney2 replied 4 months ago.

You are welcome, and I do wish you the best with this matter.

Thank you for using our forum, and please do not forget to rate my service (the series of 5 stars next to the chat window) so that I can receive credit for assisting you.

If you would like to direct future questions to me specifically, you can do so by starting your new question with "For William B. Esq." and a moderator will notify me.

Thank you again, and again I wish you the best.

Bill

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