State Bans Debt Resolution Firm From Doing Business

CHICAGO (CBS) — The State of Illinois has ordered a debt settlement company in Chicago to stop doing business.

As WBBM Newsradio 780’s David Roe reports, the Illinois Department of Financial and Professional Regulation has ruled that Legal Helpers Debt Resolution may not continue operating.

LISTEN: Newsradio 780’s David Roe reports

The department also issued a fine of $314,000 against the company, or $1,000 for each of 314 clients it has identified, according to a news release.

In one instance, Legal Helpers charged a client identified by the state as T.G. a “retainer payment” of $500, and a monthly maintenance fee of $50, the release said. Additionally, Legal Helpers subcontractor Eclipse charged a service fee of 15 percent of the total debt scheduled to be paid.

Altogether, T.G. paid more than $3,400 to Legal Helpers and Eclipse and more than $3,100 in fees, and ended up with only about $290 to go toward repaying his debt, the release said.

The state has also discovered that Legal Helpers, despite its name, does not provide legal representation or attorneys to customers, and the person signing contracts with customers is not licensed to practice law in Illinois, the release said.

CBS 2 Investigator Pam Zekman reported on Legal Helpers last year. Some former clients complained that the firm repeatedly lost documents they had to submit over and over again, like pay stubs and other records needed to file their bankruptcy petition.

In March, Illinois Attorney General Lisa Madigan sued the firm, saying consumers were misled into thinking their debt resolution cases would be handled by lawyers.

“They are essentially a referral source for a scavenger industry that is unfortunately seeking to profit from others’ financial misfortunes,” Madigan said in March.

  • Ella Worley

    If we are a client of LHDR what do we need to do? Are they required to refund us? Or can we have them stop debting our accounts immediately?? The guy who only paid 500 was lucky they made me pay over 500 dollars for 3 months as a retainer fee and then started paying 519 monthly after words for the past year. I have only had one credit card cleared according to them.

  • Ella Worley

    I wanted to add that also I’m from out of state. I didn’t know if I need to go to my attorney general or contact the Illinois one. Or do I even need to contact them at this point?

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