This Debt Relief Company Isn't Helping Me At All

Summary

Summary of "The Ramsey Show Highlights" Episode: "This Debt Relief Company Isn't Helping Me At All"

Release Date: March 29, 2025

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Introduction

In the March 29, 2025 episode of The Ramsey Show Highlights, host Dave Ramsey addresses a distressing call from a listener named Patricia. The episode delves deep into Patricia's struggles with debt relief companies and the legal repercussions she's facing as a result. Experts Rachel Cruze and insights from George Kamel further enrich the discussion, providing listeners with actionable advice and cautionary tales about debt management and financial scams.

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Patricia's Financial Crisis

Patricia's ordeal begins with a rapid escalation of debt. She shares:

"I went from zero debt in January 23rd to 54,000 in April 24th. I was trapped in this abusive relationship that I was hospitalized and arrested for fighting back, but I'm out of that now." (00:06)

This harrowing experience thrust her into survival mode, leading her to seek assistance from a debt relief company. Unfortunately, Patricia's trust was misplaced. She reveals that the company prioritized their fees over her actual debt relief:

"I signed up for a debt relief company, and I trusted them. But now that I'm able to take a look at what's going on, I see that they're taking all their fees up front. They're barely paying my creditors..." (00:25)

Additionally, expired DocuSigns and unresolved negotiations exacerbated her financial predicament, culminating in impending lawsuits from her creditors.

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Issues with the Debt Relief Company

Patricia provides a detailed account of the financial mismanagement by the debt relief company:

"I have given them $7000. Over $7000. And $4000 of debt has gone to their fees. Only 3000 have gone to my creditors." (02:15)

She explains that the company's structure allows them to take a substantial 25% of her enrolled debt as fees once they've made a settlement:

"What's considered settling is when they negotiate a settlement and make the first payment, then they're eligible to take all their FEES, which is 25% of my enrolled debt." (02:37)

This revelation underscores the predatory nature of certain debt relief companies that prioritize their profits over clients' financial well-being.

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Advice from Dave Ramsey

Dave Ramsey empathizes with Patricia's situation and outlines a strategic approach to regain control:

1. Canceling the Agreement:

   • "Well, you have to cancel your agreement with the debt relief place first so that they're not signing and making decisions for you." (03:06)
   • Emphasizes the importance of obtaining official documentation to sever ties with the debt relief company.

2. Responding to Lawsuits:

   • Guides Patricia on filing a response to the summons:

     "So you have two business days to try to get out of this. And if you can, then you can apply, go to the court summons and say, I just got out of the debt consolidation. I have the money here and I'm ready." (04:51)

   • Advises maintaining thorough documentation of all communications and payments.

3. Revoking Power of Attorney:

   • Addresses the need to revoke any granted power of attorney to prevent the debt relief company from making unauthorized decisions:

     "You have to cancel your agreement with the debt relief place first so that they're not signing and making decisions for you." (08:01)

Dave’s guidance centers on empowering Patricia to take immediate and documented actions to rectify her financial and legal status.

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Insights from Rachel Cruze

Rachel Cruze complements Dave's advice with additional perspectives:

1. Understanding Debt Settlement Tactics:

   • "They're there. They just want the money." (05:12)
   • Highlights the often aggressive and misleading tactics employed by debt relief companies.

2. Encouraging Prompt Action:

   • "I would call this company back and show them and tell them, hi, I had a document. I'm a few days late, but I have $3,800. I can pay you and just settle this now." (05:48)
   • Stresses the importance of acting swiftly to settle debts independently rather than relying on untrustworthy companies.

3. Maintaining Financial Autonomy:

   • Advises Patricia to not let the debt relief company's timeline dictate her responses:

     "I wouldn't let their timeline be the one that's dictating all this either." (05:36)

Rachel’s input reinforces the necessity of proactive and informed decision-making in overcoming debt challenges.

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Technical Assistance and Support

During the episode, George Kamel briefly introduces a sponsor message about deleting personal information online to prevent data misuse. While not central to Patricia's story, it underscores the broader theme of personal empowerment in financial management:

"Delete me will scrub your data from all of these sites so that you can focus on the Ramsey show instead of who's buying and selling your info." (01:18)

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Conclusion and Encouragement

The episode concludes with heartfelt encouragement from both Dave Ramsey and Rachel Cruze. They reassure Patricia that reclaiming her financial stability is attainable through decisive action and due diligence. Rachel emphasizes:

"You can do this. For sure. You can do this. It's going to take some time, but we hope that helps. We're cheering you on." (08:20)

Their support serves as a beacon of hope for listeners facing similar financial struggles, emphasizing resilience and informed action as keys to overcoming debt-related adversities.

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Timestamp Reference

• [00:06] Patricia shares her initial debt surge and personal trauma.
• [00:25] Patricia discusses her experience with the debt relief company.
• [02:15] Detailed breakdown of fees and debt allocation by the company.
• [02:37] Explanation of the company's fee structure upon settling debts.
• [03:06] Dave Ramsey advises canceling the agreement with the debt relief company.
• [04:51] Guidance on responding to legal summons.
• [05:12] Rachel Cruze critiques the debt relief company's motives.
• [05:36] Rachel emphasizes not letting the company's timeline control actions.
• [05:48] Rachel suggests proactively settling debt independently.
• [08:01] Discussion on revoking power of attorney.
• [08:20] Rachel offers encouragement and support to Patricia.

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Takeaways

• Vigilance with Debt Relief Services: Not all debt relief companies operate ethically. It's crucial to thoroughly vet any service provider and understand their fee structures before engagement.

• Documentation is Key: Maintaining detailed records of all communications and transactions can safeguard against misunderstandings and legal complications.

• Empowerment through Action: Taking proactive steps, such as canceling unfavorable agreements and responding promptly to legal summons, can significantly impact one's financial recovery journey.

• Seek Trusted Advice: Engaging with reliable financial advisors and leveraging expert advice can provide clarity and direction during tumultuous financial periods.

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This episode serves as a poignant reminder of the complexities surrounding debt management and the importance of informed, decisive actions in navigating financial crises. Listeners are encouraged to stay informed, seek trusted guidance, and prioritize their financial autonomy to avoid falling prey to predatory financial practices.

Transcript

[Dave Ramsey]

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[Patricia]

So I need help. I went from zero debt in January 23rd to 54,000 in April 24th. I was trapped in this abusive relationship that I was hospitalized and arrested for fighting back, but I'm out of that now. Oh, my gosh. I didn't survive. Yeah.

[Rachel Cruze]

I'm so sorry.

[Patricia]

Thank you. I was in survival mode. So I signed up for a debt relief company, and I trusted them. But now that I'm able to take a look at what's going on, I see that they're taking all their fees up front. They're barely paying my creditors, and I have to respond to my second lawsuit by next week.

[Dave Ramsey]

Oh, my gosh.

[Patricia]

I also found expired docusigns that I never saw. They would expire really quickly. And. And so I don't know what they've negotiated. I know they've negotiated about 36,000 of it, and there's still. The rest of it's outstanding. And I did pay off my first lawsuit privately.

[Dave Ramsey]

So the companies that they stopped paying are suing you, right? You stopped paying your debts, and the money that you sent, they weren't paying it. So is that who's suing you? Your creditors?

[Patricia]

Well, there were like 12 or 13 cards altogether, so they've settled with some of them, but the ones that they just wanted, except waiting in line, they're the ones suing me. Yeah, that's right. Like I said, I've paid off one. And. Yeah.

[Dave Ramsey]

How much have you given them, the debt relief company?

[George Kamel]

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[Dave Ramsey]

How much have you given them, the debt relief company to start?

[Patricia]

I have given them $7000. Over $7000. And $4000 of debt has gone to their fees. Only 3000 have gone to my creditors. And I did Find that when they settle. What's considered settling is when they negotiate a settlement and make the first payment, then they're eligible to take all their FEES, which is 25% of my enrolled debt.

[Dave Ramsey]

I'm sorry. I mean, you're finding out what's absolutely true, which is these places are a scam. And I hate that you're finding that out the hard way. Do you know what it will take to get, like, how can you get out of this? Have you kind of researched what it would take for you to get out? Will you be dinged if you say, listen, I don't want to pay any more into this. I don't want to do this anymore? What's their. What's their policy on that?

[Patricia]

Well, the contract, they say I can end any time. So that's why I figure they're padding their fees up front in case I decide to end.

[Dave Ramsey]

Yeah, you're right.

[Patricia]

But. But I do the one that I want to settle right now because I do have some money to settle the second lawsuit. But I tried to call them directly and they won't talk to me because of the power of attorney, so the company won't call me back either. And so when I called them this morning, they said, there's no update except we got the power of attorney. And I'm like, no, stop. I don't want them to settle with them.

[Dave Ramsey]

Well, you have to cancel. It sounds like you have to cancel your agreement with the debt relief place first so that they're not signing and making decisions for you. So I feel like that's first in line. First in line is getting documentation that I'm no longer part of this program. I'm not giving them any more money, and I have my power of attorney back so they can no longer sign for me. So I, I'd want that first. I'd want documentation of that. Not just, okay, over the phone. Right. And then after that, then you can really do for yourself what they were saying, quote, they were going to do for you, which is. Yeah. At this point. At this point, because there has been no payments made on this debt. Yeah. They're going to be ready to settle, and you should be able to do that.

[Patricia]

Okay. Yeah, they said they want to talk to me. And so do you think I have time before. Because I have to respond to the summons by next Tuesday. Do you think I would.

[Rachel Cruze]

How much do you owe?

[Patricia]

How much.

[Rachel Cruze]

How much do you owe for the ones that are suing you?

[Patricia]

So the ones that suing me is he. They want like 4,500. But I enrolled 3,800 with the. With them in April. Well, I did just pay off one lawsuit, and they were wanting 3,800, and I settled that.

[Dave Ramsey]

And you got that writing. That's in writing, the first one you paid off.

[Rachel Cruze]

Yeah. So, I mean.

[Patricia]

Yeah.

[Rachel Cruze]

What I would say, Patricia, is this 4500. I don't want to give you the wrong advice, but from what I have gathered over the years of doing this show and talking to people, it's 4, $500. They say it expires on Tuesday. If it takes you another week to get out of the debt settlement, you call them back, they'll give you another 10 days later. They're gonna. They're there. They just want the money. I mean, at this point, too, with debt settlement, you haven't paid them for. They'll. They're lucky to get anything.

[Dave Ramsey]

Right?

[Rachel Cruze]

I mean, at this point. And how these companies work, too. They. These debts are sold so many different times. They've gone through three different companies. I mean, they're not really keeping track. They're. There's a level of intimidation always with them, whether they're on the phone or through mail. And so, I mean, some of it is legit, right? I mean, they can. But. But I really think, Patricia, if you take all of next week to get out of the debt settlement and it takes you a couple of days and for them to email over paperwork like what Jade's saying and have documentation that you are really out, then I would call this company back and show them and tell them, hi, I had a document. I'm a few days late, but I have $3,800. I can pay you and just settle this now. They're gonna take your money. They will take it. So I wouldn't be. I would be on it. I would be urgent about all of this. I want you out as soon as possible. But I wouldn't let their timeline be the one that's dictating all this either.

[Dave Ramsey]

Yeah, I mean, like you said, Rachel, a lot of it's fear tactics and you going, oh, my. They're suing me. Oh, my gosh. I have a timeline. Oh, my gosh. If I don't. And Rachel is exactly right. It's. You'll have the opportunity to make a deal again.

[Patricia]

Well, I have to reply to the summons by next week, because if I don't reply to the summons, and they'll make a judgment again.

[Dave Ramsey]

And what do you. What's the reply? What's the process of that? What does that mean?

[Patricia]

I have to go to the courthouse and file a response. It costs $250. That's what I did.

[Dave Ramsey]

Your response be? Well, here's. There's two things happening here. A, you're concerned about filing the response, which is next week. Right. What day? What day?

[Patricia]

It's the 13th.

[Dave Ramsey]

The 13th?

[Patricia]

Yeah.

[Dave Ramsey]

I don't know. What day is that? Is that Tuesday?

[Patricia]

Like, Wednesday? Okay.

[Dave Ramsey]

So you have. You have two business days to try to get out of this. And if you can, then you can apply, go to the court summons and say, I just got out of the debt consolidation. I have the money here and I'm ready. Right. That's one response. The other response is, I've been trying to get out of this debt consolidation, and I have record of me trying to call and pay this, and they have not taken my payment, but I have the money. I have the check here. I'm happy to pay it today. Right. So there is part of this where you might have to, like, plead your case on that, and that's why it's so important to document everything you're doing. I called them on this day at this time, and they have to record those calls, too. I called them at this day and this time. So you just do be. Do your due diligence on making sure you're keeping record of everything, and then show up at the summons with. Wherever you're at in life. I just filed the paperwork or I'm waiting to hear back on them. And just take it one day at a time, because I think you're freaking out a little bit about what may or may not happen. And if the. If you have the money and you're saying, judge, I want to do this, I don't think the judgment's going to be against you. I think they'll be fair on that.

[Patricia]

Right. So how would I go about revoking the power of attorney? Do I need to get a lawyer to do that, or can I do it myself?

[Dave Ramsey]

You know, I don't think so. I mean, it sounds like whenever you signed up for this debt relief, part of the papers you signed said, and you guys can speak for me and sign for me and all of that. And so it should be that when you get out of this.

[Rachel Cruze]

Yeah. Revoked along with the entire agreement. Yeah, for both. Oh, Patricia, I'm so sorry. You know, you've gotten. You've gotten yourself out of a lot worse situation than this. So this is. You can do this. For sure. You can do this. It's going to take some time, but we hope that helps. We're cheering you on.

[George Kamel]

Create your free every dollar budget today.

[Dave Ramsey]

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