There is nothing more heartbreaking than to see an earnest hard-working family with its back against the wall in bankruptcy proceedings being thrown out of their home because someone steered them towards cheap unreliable bankruptcy services to help solve their problems. Things are so tight these days, that even a few days of layoffs in the family can push everyone to the brink of financial disaster. People in temporary trouble like this do know that things could get better really soon; and to keep the creditors from foreclosing on their home, they could retain a lawyer out of the Yellow Pages who specializes in bankruptcy services. Lawyers are not strongly disliked for no reason; often they can just take your money, sell you hope, and just never do their job. They could salve their conscience with something silly like, “at bargain basement prices, what did you expect, all my attention?”. This kind of work isn’t even that complicated – he’ll just need to show up, and submit your undertaking that you intend to honor your debts. But if he doesn’t do that, they will rule against you, and you won’t even know until the day the bailiff shows up to inform you that you are now an intruder in your own home.
They call these cheap bankruptcy specialist firms, bankruptcy mills – you get the idea – they just give you run-of-the-mill revolving door service. These are huge offices with crowds of bankruptcy petition writers and fresh law students working in sweatshop conditions who for a fee you will be happy to give you shoddy advice on how to reorganize your money, keep the debt collectors away, and keep foreclosure possibilities out. You’ll get plenty of junk mail from them, and they advertised all over too. Some of these services run out of actual law firms. You might be impressed by the law firm-like name on the door, but this department may actually be run by just a hundred overworked secretaries directed by one very frustrated lawyer who couldn’t care less. The other kind of bankruptcy mill doesn’t actually call itself a law office; they call them bankruptcy-petition preparers. These are just people who have some kind of experience, having worked with or under a lawyer once. They operate out of a storefront, and boy, are they cheap.
So what happens when you go to one of these people. How bad can it be? These meatgrinder practices can cost you your life savings, your home, and your shot at happiness in the future. These bankruptcy services called mills, can give you such bad information, that you would have a hard time believing you’re in America, a country where everything is supposed to be properly regulated. Consider the case of three students in upstate New York who suffered under a crushing student loan debt. They thought they could approach a storefront bankruptcy petition preparer to file Chapter 7 to have their student loan forgiven. Of course such a thing isn’t possible, but that bankruptcy service was perfectly happy to take their money, and tell them a couple of days later that the job was done. And then the collection agents started calling a couple of years later, and they have this on their credit record.
We could go on and on, but the bankruptcy mills apparently have taken exception to this. They say that given the volume that they deal with, a few errors here and there are only to be expected. What do you do when you can’t afford a lawyer – you do need someone don’t you? The bankruptcy services say that they don’t promise to give you full service at the $200 they charge you. They’ll only do the bare minimum and it is up to you, the customer, to make sure that all the t’s are crossed and the i’s dotted. But how does anyone defend giving misinformation?
This reminds me of a trip to Mexico once; there was someone selling sneakers on the street for $1.50 a pair. This was astonishing of course and I thought I would check them out. They had used nails to hammer the soles to the uppers; and the nails protruded through to the insides of the shoes. When I asked him about the idea behind this, he just said what did I expect for $1.50? Not, bloodied feet, I’m sure.