Penny-wise and pound-foolish: phony bankruptcy law firm caught and shut down, but what about their clients?

The New Jersey Law Journal reported  that a Baltimore bankruptcy judge shut down  a fictitious law firm run by a  man with only a high school education, and imposed heavy fines. This person is reported to have represented over 50 clients, charging a flat rate of $400.00 to prepare and file bankruptcy petitions and other papers needed to start bankruptcy proceedings. According to the United States Trustee, his Baltimore office  was “decorated with law books to give the impression of a legitimate practice”

What about all those people who relied on this person? We know from practice (and our clients soon learn) that bankruptcy only looks simple. There are many “land mines” that can trip up the ill informed, resulting in civil or criminal liability, loss of assets, or complete loss of a discharge, forever.

To do the job right requires a lot of time, even in the simplest cases. Proper advice and representation requires that those anticipating bankruptcy be asked a lot of questions, and that they be given a careful and complete understanding of what they are getting into, and why it is or is not their best course of action.

This is an area where a few extra dollars to hire someone to do the job right is money well spent. After all, once a bankruptcy is filed, it may take on a life of its own, and it often cannot be “withdrawn”. Just as important, a bankruptcy discharge is not a “cure-all”. We think it is just as important for our clients to develop a plan so they can get back on a balanced budget, and once and for all take control of their lives.

So this story is an object lesson…

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