The main GreenPath lawsuit was Pries v. GreenPath, Inc., a 2020 class action filed in federal court in Georgia alleging that the nonprofit credit counseling agency charged debt management fees exceeding a state cap of 7.5%. In January 2021, a federal judge rejected GreenPath’s method of calculating that fee and let the case move forward. The parties settled a few months later, on terms that were not made public.
What the Georgia Class Action Alleged
Kay Pries and Pamela Daniels filed their complaint in the United States District Court for the Middle District of Georgia in 2020, on behalf of Georgia residents who had done business with GreenPath from July 1, 2003, onward.1Get Out of Debt. GreenPath Hit With Two Lawsuits Days Apart The suit claimed GreenPath violated the Georgia Debt Adjustment Act and the Georgia Fair Business Practices Act by charging fees above what state law allows.2FindLaw. Pries v. GreenPath, Inc., Civil Action No. 5:20-CV-353 The plaintiffs were represented by James W. Hurt Jr., a Watkinsville attorney who had brought earlier fee-cap cases under the same statute.3CourtListener. Pries v. GreenPath, Inc. – Parties
The Fee Calculation at the Heart of the Case
The Georgia Debt Adjustment Act caps what a debt adjuster can charge at 7.5% of the amount the debtor pays each month “for distribution to creditors.”4Georgia Consumer Protection Division. Debt Adjustment Companies The dispute was over what that 7.5% applies to.
GreenPath calculated the fee on the debtor’s full monthly payment, which included the fee itself. The plaintiffs argued the cap applied only to the portion that actually reached creditors. Under GreenPath’s method, consumers were effectively paying a fee on top of a fee, so the percentage taken relative to money delivered to creditors ran higher than 7.5%.5Get Out of Debt. GreenPath Suffers Setback in Recent Lawsuit That Applies to All Debt Management
What the Judge Ruled
On January 5, 2021, Chief District Judge Marc T. Treadwell denied GreenPath’s motion to dismiss the case.2FindLaw. Pries v. GreenPath, Inc., Civil Action No. 5:20-CV-353 On the fee question, he sided with the plaintiffs. The statute ties the 7.5% cap to the amount distributed to creditors, not the total payment. GreenPath’s reading, the judge wrote, would require debtors to pay a fee calculated on the fee itself, which he called a “stilted calculation” that “makes no sense.”5Get Out of Debt. GreenPath Suffers Setback in Recent Lawsuit That Applies to All Debt Management
The court also allowed the Fair Business Practices Act claims to proceed. Under Georgia law, a violation of the Debt Adjustment Act is automatically a violation of the Fair Business Practices Act. The judge found the plaintiffs’ pre-suit notice adequate and declined to strike their request for treble damages at that early stage.2FindLaw. Pries v. GreenPath, Inc., Civil Action No. 5:20-CV-353
How the Case Ended
The parties settled rather than continue litigating. GreenPath filed a notice of settlement on April 29, 2021. On May 5, the parties jointly moved to dismiss the complaint with prejudice, which bars either side from refiling the same claims. Judge Treadwell granted the motion on May 6, 2021, and entered final judgment that day.6PACER Monitor. Pries et al v. GreenPath, Inc. The settlement terms do not appear in the public court record.
A Separate Lawsuit Filed Days Later
Around the same time, a Minnesota resident sued GreenPath in Michigan on different theories. That complaint alleged violations of the federal Credit Repair Organizations Act and the Minnesota Credit Services Organization Act, claiming GreenPath had acted as a debt settlement provider and failed to apply monthly payments toward the plaintiff’s specific debts, with a creditor eventually suing the plaintiff. GreenPath publicly denied that it offers debt settlement or credit repair services.1Get Out of Debt. GreenPath Hit With Two Lawsuits Days Apart That case is separate from the Georgia fee-cap litigation and did not involve the same legal claims.
Why the Ruling Matters Beyond This Case
Georgia banned debt adjusting outright in 1956, then reversed course in 2003 by allowing it under a regulatory framework that requires insurance, independent audits, trust accounts, and the 7.5% fee cap. Companies must disburse funds to creditors, minus authorized fees, within 30 days. Consumers who successfully sue under the act are entitled to a refund of all fees and may seek an additional $5,000 in restitution.4Georgia Consumer Protection Division. Debt Adjustment Companies
The 7.5% cap had been litigated before. In 2012, attorney James Hurt Jr. brought Snyder v. Financial Freedom Southwest in Carroll County Superior Court, alleging the defendant kept roughly 41% of a client’s payments as fees between 2002 and 2006.7Courthouse News Service. Debt Adjuster My Eye, Class Says Because the Pries case settled before trial, the January 2021 order stands as the court’s guidance on how the cap must be applied: 7.5% of what reaches creditors, not 7.5% of the total payment. Any debt management company operating in Georgia has to work within that reading.