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Court Appoints Chapter 11 Trustee for AmeriDebt By Stephen Manning The Associated Press GREENBELT, Md. (AP) - A federal bankruptcy judge appointed a Chapter 11 trustee Wednesday for AmeriDebt, the beleaguered credit counseling company that now faces a $15 million claim from the Internal Revenue Service over its disputed status as a nonprofit. AmeriDebt filed for Chapter 11 protection in June, saying it had $12 million worth of liabilities but only $8.4 million in assets. The trustee appointed by Judge Paul Mannes will guide the company and its creditors through the bankruptcy process. The Federal Trade Commission filed suit in...

GERMANTOWN, Md. — Credit-counseling company AmeriDebt (search), charged by federal regulators with using deceptive marketing to bilk hundreds of thousands of customers, filed for bankruptcy Saturday, the company announced. [snip] In November, AmeriDebt became the first credit counseling company to have a federal lawsuit filed against it. Minnesota, Illinois and Missouri are among five states that have filed separate lawsuits against the company. [snip] Regulators said AmeriDebt made customers think that an initial fee would be part of their debt-reduction payments to creditors. Instead, it went to AmeriDebt. AmeriDebt has disputed the FTC's characterization of the company, saying it provides...

BALTIMORE - Credit-counseling service AmeriDebt, accused of defrauding consumers and falsely portraying itself as a nonprofit, announced it will lay off most of its workers and stop seeking new customers because of recent "negative publicity." Last month, Missouri sued AmeriDebt, accusing the company of defrauding indebted consumers of millions of dollars. In February, Illinois filed a similar suit against the company. Earlier this month, the Internal Revenue Service and the Federal Trade Commission announced they would investigate nonprofit credit counseling services to make sure they serve consumers and qualify for their tax-exempt status. No specific firms were named. AmeriDebt announced...