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Thursday, March 31, 2016

Consumer Fraud Protection Bureau Wins $173 Million in Case Against Bankruptcy Debt Scammer

When it comes to debt relief, there are good guys and bad guys. Unfortunately, the number of scammers entrenched in the debt relief industry is growing, and well-meaning Americans are facing disastrous consequences for working with so-called “credit counselors” and “consolidation specialists” -- all of whom are out to make a quick buck.

As practitioners of bankruptcy law, we know the options available to consumers -- and we are here to help. However, as one recent case points out, many debtors -- unaware of their choices -- turn to unscrupulous con artists for help with their fledgling financial situation, only to end up worse off than when they started.

Earlier this month, the federal Consumer Financial Protection Bureau (CFPB) reigned victorious over one such “debt relief” company, referred to in pleadings as “Morgan Drexen.” And, the verdict is hardly one to scoff at: $173 million.

According to the details of the lawsuit, Morgan Drexen offered clients “bankruptcy” services -- promising to help debtors avoid bankruptcy, or to minimize their exposure once the process began. However, Morgan Drexen performed “little to no” work on the clients’ files, and is even alleged to have falsified bankruptcy pleadings on clients’ behalf.

In essence, struggling debtors relied on the services of this “debt relief” company, and were ultimately taken advantage of in the process. If you are facing a difficult financial situation, the best resource is an experienced bankruptcy attorney that can offer realistic advice and reasonable solutions. As always, if it sounds too good to be true, it probably is.

For anyone defrauded by Morgan Drexen, the CFPB promises to forward letters to all former clients explaining their options moving forward. The letters will contain information as to whether certain debts have been repaid (or not) and what debtors need to do to rectify the situation.


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Miami Valley Bankruptcy, Brian Lusardi, Esq., assists clients with Bankruptcy matters including but not limited to: Common Myths, Cost of Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, The New Bankruptcy Law and Personal Bankruptcy in Xenia, Ohio, and the cities of: Wilberforce, Alpha, Spring Valley, Dayton, Bellbrook, Yellow Springs, Cedarville, Fairborn and Clifton; and the counties of Greene and Montgomery.



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