Readers of this blog know that one of the key messages we offer regularly is the importance of consulting with an experienced attorney when exploring options related to debt relief. Fear of the possible cost may keep many in Arkansas who are considering relief through bankruptcy from taking this important step. What many fail to take into account is that going through the bankruptcy process without the help of trusted legal counsel can bear other costs.

This is something that a single mother in Virginia discovered a little too late for her own comfort. Already stretched to the limit because of mounting debt, she lost her job in 2012. She decided to file for Chapter 7 bankruptcy. But instead of seeking the help of an attorney, she found an online company offering filing services at low cost. 

According to a news report on her case, the woman dug into her limited resources, paid USA Bankruptcy Associates $185, and saw her case filed. Almost immediately, though, she was told by the court that her paperwork was faulty. Important information was lacking, and whoever had prepared the documents hadn’t bothered to sign them.

The woman, somewhat frantic, got no help from the company in correcting the situation. The whole matter could have ended up being derailed, but she persuaded the court to not throw out her filing and she was eventually able to shed $100,000 of her debt.

In the wake of this woman’s difficulties, the U.S. Trustee Office investigated USA Bankruptcy Associates and found out it has been the cause of dozens of other similar cases across the country. Sanctions were sought and obtained, including an order barring the company and an affiliate operation from filing bankruptcy forms anywhere in the country.

It would be nice if that was the end of things, but it isn’t. The company hasn’t paid any of its penalties and continues to operate its online servicing from bases in Canada, Israel and England.

Source: The Virginian-Pilot, “Banned bankruptcy preparer stays ahead of law,” Tim McGlone, Dec. 15, 2013