Article Date: June 23, 2013
The Massachusetts Bankruptcy Court, pursuant to an enforcement action brought by the United States Trustee, ordered sanctions and issued an injunction against a bankruptcy petition preparer in Lawrence, Massachusetts. The case can be found here. The petition preparer, Pinnacle Financial Consulting, LLC (“Pinnacle”) along with its owner, were ordered to pay monetary sanctions, return money to bankruptcy debtors and were enjoined from filing any future bankruptcy petitions in Massachusetts.
The gist of the U.S. Trustee’s complaint and the Court’s findings was that Pinnacle engaged in the authorized practice of law when it charged consumers for the preparation of bankruptcy petitions. There were no lawyers at Pinnacle. However, the fact that Pinnacle’s president went to law school (but never was admitted to the bar) was used to suggest to consumers that the company had legal expertise. In fact, Pinnacle touted a “Pinnacle System” that it suggested had significant value. Non-attorney bankruptcy petition preparers are not illegal, per se, but they are not allowed to advise clients or do anything more than simply type forms. By emphasizing its supposed expertise, Pinnacle was acting as more than just a typist, and it encroached on a province only allowed to licensed attorneys.
It turns out for good reason. Consumers are usually harmed by operators who talk a good game but who are unregulated and unaccountable. In this case, Pinnacle falsely advertised its discharge rate, and it also guided clients on how to claim the Minnesota exemptions instead those in place here in Massachusetts.
It is in immigrant communities, like Lawrence, Massachusetts, that these types of organizations usually thrive. In Latino communities, especially, such organizations have a special ability to mislead because, in certain Latin American countries, the popular term “notario” has a very different meaning from the term “notary” here. To help protect consumers, the U.S. Trustee should consider bringing more enforcement actions of this nature.
Though consumers sometimes think that the bankruptcy system will protect them simply because they are needy and hard-up, that is not always the case. Bankruptcy is an adversarial process, and there is little recourse for a consumer who loses property or has his case dismissed due to filing errors or poor strategic choices.
Nicholas Ortiz, Boston Bankruptcy Attorney
Latest posts by Nicholas Ortiz, Boston Bankruptcy Attorney (see all)
- Bankruptcy and Arrest Warrants - August 23, 2013
- Massachusetts Mortgage 150-Day Right to Cure and Bankruptcy - July 23, 2013
- Unauthorized Practice of Law Gains Attention of U.S. Trustee - June 23, 2013
- What is a Prepackaged Chapter 11 Bankruptcy? - May 23, 2013
- Marital Adjustment Allowed to Set Commitment Period - April 25, 2013
Last modified: June 24, 2013