Debt Relief USA Inc. was considered to be one of the big kids on the block when it came to offering debt relief services. The problem according to the Governor’s Office of the state of Georgia is that they violated the Georgia Debt Adjustment Act. This act set the boundaries for debt adjusters such as Debt Relief USA Inc.

According to the Consumer Affairs Office, the company which negotiates debts down for borrowers who have problems paying creditors, charged more than the 7.5 percent the law allows debt adjusters to take from the amount customers deposit each month to pay their creditors.

And here is one that really infuriates me; I’ve warned debtors more times than I can count, to always read a contract before signing. If at all possible, have an attorney look at it on your behalf. Especially when it comes to debt relief. In this case the Consumer Affairs Office, also said Debt Relief USA did not pay clients’ creditors within 30 days of receipt as the law requires and that it did not maintain separate trust accounts and insurance for each customer.

The truth is, the agreements they signed most likely indicated that no funds would be released to any creditor until the fee was paid in full. That’s a standard contract virtually all debt relief companies. You should note, check with your state to make sure the debt relief company you signed up with is not violating any state laws.

In the end Debt Relief USA Inc., agreed to refund $527,205.55 in fees to 330 Georgians to settle charges it violated state law. Plus, reimburse the Governor’s Office of Consumer Affairs $40,000 for expenses and will cease operations in the state until its practices comply with the Georgia Debt Adjustment Act.

Let that be a lesson, even if you signed a contract with a debt relief company or a debt counseling company, that contract may be made null and void by your state if it violates their laws.

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