Location: Iowa, US
So back in spring 2024 I signed up with a debt relief company (DRC) to help get rid of some credit card debt I was dealing with.
The way they work is they have you stop paying your creditors and start paying them instead. While you’re doing this they reach out to the creditors on your behalf and inform them that you are working with them to settle the debt. When you build up enough money in their program they then negotiate with the creditor to get the amount lowered. They also have a legal team just incase you were to get sued. This is how it worked for 4/5 of the creditors I added to the program.
The last creditor called me several times and I was instructed by the DRC to just tell them that I was working with them and they should be reaching out to negotiate on my behalf. Long story short they never reached out to that last creditor even after I reached out and requested them to.
Then in July of 2025 I was served with a lawsuit from that creditor. So I turned it into the DRC for them to pass to their legal team. I received an email response from someone on the legal stating that they were working on it and reaching out to the creditor and that they would appear in court on my behalf and if they needed anything they would reach out.
So I don’t hear anything about it until April 2026 when I was in the process of selling my house. My realtor found out that the last creditor had a lien on my house. I immediately called the DRC and the person I talked to told me that they were going reach out to the creditor again.
My realtor ended up having the closing company write it up that we would use the sale of the house to pay the debt but we would need a pay off amount. So I called and got to the same person I spoke to a few days before and tried to get that info from them. Unfortunately they didn’t have the paperwork I needed but they sent my other paperwork that stated they the DRC legal team failed to appear on my behalf.
I ended up having to pay the debt using the sale of my house which took all of what little proceeds there were plus about $2500. All in all it was about $4200 and a few days of stress but it got dealt with.
So to recap, I have an email from someone on their legal team that says “We will appear on your behalf.” I also have a court document that said “Judgement in favor of (creditor), defendant failed to appear.” Is this enough to make a case that they did not uphold their part of the contract? Older family members are saying to take it to the state attorney general.
TL/DR: Debt relief company told me they would appear in court on my behalf but failed to appear costing me about $4200. Do I have any recourse?