For the fourth year in a row, the debt settlement industry is attempting to pass legislation that would remove the current fee cap protecting consumers who use debt adjustment services. The current fee cap is at 7.5% and allows non-profits to charge nominal fees for their meaningful debt management programs. Consumers who use debt settlement services typically end up in worst shape, collecting legal notices, racking up late fees and destroying their credit score. Georgia Watch opposes the debt settlement model contained in this legislation because it would permit exorbitant debt settlement fees. This model exploits the desperation of financially strained families, typically leaving them even deeper in debt. We will continue to work against passage of a bill that puts consumers at risk.
In 2013, a bill put forth by the Debt Settlement industry was voted down overwhelmingly in Committee, but a new version of the bill was introduced on February 19th as HB 387. Specifically, the bill would have removed the current fee cap on debt adjustment services, which is currently set at 7.5% of the amount paid to creditors. Last year the bill was heard both in the Judiciary Committee and Committee on Banks and Banking on the House side, but was not favorably voted out of either committee.