Bankruptcy

Top Ten Consumer Bankruptcy Options NOT To Use in Arizona; These Top Ten non-Bankruptcy Alternatives Don't Work Very Well!

By Joseph McDaniel, Esq.

And a lot of people don't know what they're talking about.

Recently I heard about a very nice lady who had been advised to ignore a major bank credit card debt totaling a bit more than $10,000.

Now she's been sued by the bank for the credit card debt, which simply complicates the repair job I'll need to do a bit; kinda like trying to patch the roof during a Monsoon. You can do it, but you'd really rather it wasn't so dark, and rainy, and windy. And that lightning seems to be getting closer! But you really don't get to do it at your leisure, because the rain is coming down now!

And a second alternative that I personally dislike is smacking the hornets nest and then standing still while they sting you. That is, some people make the bank cranky, because the bank doesn't want to negotiate in exactly the way the debtor wants to negotiate.

So the debtor gets sued, and instead of answering the complaint on the credit card or the complaint regarding the unpaid second or third mortgage, or the deficiency after the trustee's sale in Arizona, and then negotiating during the litigation process, the debtor does nothing, and a judgment is then taken against him, her, it or them.

That, too, complicates things a bit more than I would like, although consumer bankruptcy practice in Arizona is a little like golf; you get to address the ball where it is, not where you wish the ball had stopped.

And the FTC made today's consumer bankruptcy education article for Arizona easier than usual, because they gave me the next eight non-bankruptcy alternatives and non-bankruptcy options that don't work, all in one tidy bundle!

So now I have today's top ten bad non-bankruptcy alternatives wrapped up, along with a very nice FTC Press Release discussing the non-bankruptcy options that didn't work in Arizona or anyplace else!

Turns out that a lot of the operations that say they attempt to do "mortgage rescue" don't do much in the way of rescue, except to take money from consumers so the consumers are not burdened with all that bad, dirty, dusty money.

It's a health thing, you know?

But the FTC, when it gets enough complaints, tends to get downright cranky, and it is quite serious when it goes to war.

I note, parenthetically, that I have always been disappointed by credit repair operations that promise to remove derog credit information and improve credit scores; and there are some of those discussed below, as a bonus!

And below is the press release from the FTC that discusses the injunction against the mortgage rescue business and the credit repair businesses, and the large judgments against the individuals and the mortgage rescue scams and the credit repair scams, although my guess is that it will be difficult to collect the judgments and distribute the money to the victims of the scams:

For Release: 04/22/2010

Marketers Banned from Selling Credit Repair and Mortgage Relief Services; Ordered to Pay $7.5 Million

At the Federal Trade Commission?s request, a federal court has banned eight companies and their principals from selling credit repair and mortgage relief services, and ordered them to pay more than $7.5 million for deceiving consumers throughout the United States.

In February 2009, the FTC charged seven of the companies and three officers with making false promises that they would improve consumers? credit scores by removing negative information such as late payments, charge-offs, collections, inquiries, delinquencies, judgments, and accounts discharged in bankruptcy. According to the FTC?s complaint, the defendants charged consumers up to $2,000, including illegally charging an advance payment of $300, and failed to provide written contracts and other materials required by law. In August 2009, the FTC added defendants to the case, alleging that they and one of the original defendants falsely claimed they would help consumers get mortgage loan modifications or stop foreclosure in all or virtually all instances. The court entered default judgments against all of the defendants except Gerald Serino, also known as Jerry Serino, after they failed to respond to the lawsuit.

The credit repair defendants are United Credit Adjusters, Inc., doing business as United Credit Adjustors and UCA; United Credit Adjustors, Inc., d/b/a United Credit Adjusters and UCA; United Counseling Association, Inc., d/b/a UCA; Bankruptcy Masters Corp., National Bankruptcy Services Corp., Federal Debt Solutions, Ltd., United Money Tree, Inc., Ahron E. Henoch, Ezra Rishty, and Gerald Serino. The loan modification defendants are The Loan Modification Shop, Ltd., Casey Lynn Cohen, a/k/a Casey Lynn Collins, and Rishty.

The court order prohibits the credit repair companies and their owners from selling credit repair services, and it bans the loan modification companies and their individual owners from selling mortgage loan modification and foreclosure relief services. The order also prohibits the defendants from misleading consumers about financial goods and services, such as loan terms or rates, how much a consumer will save by enrolling in a debt relief service, and credit terms other than those a lender actually offers. The order also bars the defendants from misleading consumers about any good or service, such as refund terms, government affiliation, and total cost.

In addition, the order bars the defendants from trying to collect payment from their customers, and from selling or otherwise disclosing their customers? personal or financial information. The order imposes a $7,500,334 judgment against the credit repair defendants, and a $32,710 judgment against the loan modification defendants. Litigation will continue against Serino.

The default order was entered in the U.S. District Court for the District of New Jersey on February 4, 2010.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC?s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC?s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:
Frank Dorman
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Sara DePaul
FTC?s East Central Region
216-263-3429

(United Credit Adjusters)

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on August 09, 2010 (boomark / email).