Consumer Bankruptcy News

Damn Scammers! Screaming “Don’t File Bankruptcy! debt settlement scam results

Call Us!  Don’t call those evil bankruptcy

lawyers!”

Well, a couple of, uh, excuse the term, bankruptcy lawyers, were suspended from the practice of law for running one of these debt settlement scams.

Under the business model, the ARDC alleged Legal Helpers would “market the law firm’s services and refer clients to the law firm … (then) refer the client back to the debt settlement company for ‘law-related services,’ which included managing the client’s file and negotiating the client’s debts with creditors.”

As I have ranted over the years, there is no “secret the credit card companies don’t want you to know”  there is no “new federal program” that helps you with credit cards.

More on the bankruptcy lawyer scammers:

“Clients came to LHDR because they were under financial pressures,” the ARDC Review Board wrote in its recommendation. “In many instances, their involvement with LHDR caused them to experience even greater financial problems as well as emotional distress. After ending their relationships with LHDR, many clients had to file for bankruptcy and incur additional attorney fees.

So, the long overdue suspension is good news.

The point of going through bankruptcy and getting a discharge of your debts, is, to get a fresh start.

That does not work if your employer can fire you for not paying a discharged debt.

An Arkansas bankruptcy court made the correct ruling when a bank, of all things, canned an employee who was not repaying all that bank’s credit card balance in his Chapter 13 bankruptcy.

The court website summary:

The court found that the bank/employer violated § 525 of the code when it terminated the debtor’s employment after the debtor failed to make a payment on his bank issued credit card and the debt was “charged off.” The termination occurred even though the debtor included the credit card obligation in the debtor’s bankruptcy petition. The court awarded the debtor back pay under § 105(a), to be paid to the estate in accordance with the debtor’s confirmed plan.

It is a rare week with two good stories!

But, the victims of the suspended Illinois lawyers are still out there, and, the debtor who won his job back, was still out of work for a time.

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