If you are in trouble with your mortgage and facing foreclosure, hire a lawyer, not a "mortgage assistance company" or a bankruptcy petition preparer. Many of them are scams and will take your money and not do anything for you. And worse, violate the law in doing so.
In a recent Houston bankruptcy court case, Tederal Jefferson was determined to be a bankruptcy petition preparer under 11 U.S.C. Sec. 110. Mr. Jefferson and other representatives of his company accepted $800 from an individual, and in return gave advice and assisted the individual in filing an incomplete chapter 13 case. In re Shelvin, Bankr. SD Texas 2013.
After finding that the conduct was intentional and violated Sec. 110 of the Bankruptcy Code, the Court awarded the individual plaintiff her actual damages of $550, plus statutory damages of $2,000, for a total of $2550.00. The Court also awarded attorney fees against Jefferson, in an amount to be determined after the plaintiff's attorneys file a bill of costs and Mr. Jefferson has an opportunity to object.
Further, the Court levied statutory fines against Mr. Jefferson of $9,000, to be paid within 14 days. The Court indicated that it was aware of similar proceedings pending against Mr. Jefferson in the Northern District of Texas, so the Court ordered the U.S. Trustee's office to transmit a copy of the Court's opinion to the U.S. Trustee for the Northern District of Texas and to the Texas Attorney General's office.
What do you think? Did the Court do the right thing?