Recent observations by our firm of cases in the Augusta Division Bankruptcy Court, as well as information obtained from across the nation, have revealed increase in consumers who access the bankruptcy courts by way of Internet bankruptcy services. These services are run more like a business than an actual law firm, seeking to market bankruptcy preparation services to desperate consumers. Initial contact is usually with the sales personnel of these companies, who lack legal training and are not authorized to give legal advice. These agents will often discourage consumers from meeting with local attorneys, by arguing that their fees will be higher. (Cite to “Do I need an attorney to file for bankruptcy”) Assuming that the potential clients meet their minimal criteria, they will ask them to sign up for a bankruptcy package. Information is shared with these Internet services via phone, email or text. (Cite to “How to lose an asset in bankruptcy court without even trying”) Most of the time, there is no face to face contact with the individuals who are preparing the bankruptcy paperwork. Even more problematic is that some of these services go beyond simply preparing the paperwork, and venture into the unauthorized practice of law.[i]
These companies typically advertise that they have a nationwide network of “partners”, and that they will forward the bankruptcy paperwork to a local attorney who will handle the filing of the documents and representation of the debtor going forward. In some cases, the debtors will meet with the attorney for the first time when they sign and file their bankruptcy petition. However, in other instances, the debtors who utilize these Internet services will not meet their attorney for the first time until they arrive at their first court hearing. The terms of the representation usually exclude fundamental matters, such as the reaffirmation of secured debts, redemptions, and lien avoidance motions. Additionally, ancillary paperwork responding to pending lawsuits and garnishments are not prepared. (Cite to “What your bankruptcy attorney will need to stop a garnishment”) If any issues arise during the bankruptcy case that were not contemplated in the consumer’s original bankruptcy “package”, the unfortunate debtor may be left unrepresented. (Cite to “Common Mistakes which may prevent effective bankruptcy relief”)
Our firm offers a free bankruptcy consultation for Georgia residents. If you are considering using an Internet bankruptcy service, then at least take advantage of the opportunity to meet with one of our attorneys in person to discuss your bankruptcy options, and the services that our firm will provide. This will allow you to compare both the fees to be paid and the services to be rendered.