When overwhelmed with financial difficulties, some Arizona residents may consider filing for personal bankruptcy to wipe out most of their debts. Already strapped for cash, debtors may come across quick and easy options for filing for bankruptcy, and thinking they are legitimate, may turn to random websites for assistance. However, this cut-rate assistance may end up costing Arizona debtors even more, as the paperwork that these businesses file often has problems.
The U.S Trustee Office has launched an investigation into one such company that offers to file bankruptcy papers for less than $200, but ends up filing incomplete paperwork, causing the case to be dismissed. After paying the company and being informed her papers had been filed, a single mother of two was informed that key information in her documents was missing and that the preparer had failed to sign the papers. When she tried to get in touch with someone from the company, she was unable to get in touch with an actual person. The company finally informed her that she could not be held responsible for something she did not know-which is not true, as debtors often have their cases thrown out of court for incomplete paperwork.
The Trustee Office found that there were dozens of similar cases of shoddy paperwork across the country filed by this company, against which many lawsuits have been filed. Courts have ordered sanctions against the company and even a legal order barring the company and its affiliates from preparing bankruptcy petitions anywhere in the country. However, the company continues to operate from abroad and reel in unsuspecting victims.
Bankruptcy preparers, including this company, usually use software programs that fill in forms automatically. However, bankruptcy rules vary from state to state and these programs fail to account for those differences.
Debtors already struggling with debt who turn to bogus sites for a quickie bankruptcy filing should be wary of these programs, as all that ends up happening is that debtors have to pay twice-once to the website and then to a professional to fix the problems in the filed paperwork. Even more frustrating than the money is the stress Arizona residents have to go through during this time.
Source: The Virginian Pilot, "Banned bankruptcy preparer stays ahead of law," Tim McGlone, Dec. 15, 2013