Ironic Debt Settlement Class Action Lawsuit is Ironic

We’ll start by visiting the website of Persels & Associates*. Specifically, this:

“Persels & Associates is one of the only law firms in the country that is dedicated to helping people get out of debt.”

[* Pretty sure none of those people in that picture on the home page are actual attorneys for Persels & Associates. However, I’ll share with you who my favorite person is: The tall drink of water waaaaay in the back, sort of creep-lurking above everyone.]

Great. Good to know. Except: “Lawyers Get Paid, 1 Client Gets $5K, 125K Others Zip If Judge OKs Pact in Suit Against Law Firm.”

That’s a link to a story about the aforementioned Persels & Associates. It seems that, rather than helping people get out of debt, they sort of did the exact opposite. Consumers who hired Persels & Associates to help them negotiate lower debt payments found that instead the money they were sending to the law firm was being used, first and foremost, to pay attorneys’ fees. This often meant little, or nothing, was left at the end to pay creditors with.

The settlement is what makes the story newsworthy. A federal judge in Florida is being asked to sign off on the following:

• $300,000 to the lawyers who brought the class action — because no one has learned anything from this case
• $5,000 to the lead plaintiff
• $0.00 to the 125,000 or so other plaintiffs in the class action because the legal system is just another long-form sophisticated joke-factory

Ironically, Persels & Associates itself is struggling with debt — which might be why it needed to get the money upfront, even if it never told consumers that they would be paying that money upfront. According to a story in the Tampa Bay Times: The firm would agree to collect no attorney fees until after it negotiates a settlement rather than getting its money upfront; and additionally, it would agree to provide clients at the outset with an estimate of fees and the amount to be paid to creditors.