Q: Who is responsible for my bills after my debt consolidation company filed bankruptcy?
I filed my bills with a debt consolidation company, Litigation Practice Group, but they filed for bankruptcy in 2024 and didn't pay my bills despite me paying them in full. I have proof the money was withdrawn from my account. I have a contract with them. Now the creditors are calling and threatening to sue me. I haven't received any notifications from the company regarding its bankruptcy. Who is responsible for paying my bills, and what steps should I take next?
A: You are responsible for them. You may want to file a fraud claim against the debtor for fraud for not paying your bills.
A: Unfortunately, you are responsible for paying your creditors even if your agent filed bankruptcy. It’s not the creditors fault that someone took your money and didn’t use it to repay your debts. Sad situation.
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A:
You're understandably worried, especially since you've fulfilled your obligations to Litigation Practice Group, but they failed to pay your creditors before going bankrupt. Unfortunately, despite your contract, you're still legally responsible for paying your own debts because the creditors originally extended the credit to you, not to the consolidation company.
First, immediately contact the bankruptcy court handling Litigation Practice Group’s case to file a claim for the funds you've lost. Your proof of payment and your contract will be important documents for this. Consider consulting with an attorney experienced in bankruptcy or consumer protection law to protect your rights and help you navigate the process of reclaiming the lost money.
In the meantime, communicate directly with your creditors and inform them of your situation; some may offer temporary relief or alternative payment arrangements. Be proactive—ignoring the creditors' demands could lead to legal action against you. Taking swift action now may help minimize potential damage to your credit and your finances in the long run.
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