ALERT! Scam Targeted Towards Some Bankruptcy Debtors

17 Sep ALERT! Scam Targeted Towards Some Bankruptcy Debtors

ALERT! It has been reported that some Chapter 13 debtors have received letters from the “Chapter 13 Trustee” telling them to sign over their home to the Trustee and to call an 1-800 number. If you have received this letter, it is a scam being pulled on unsuspecting Chapter 13 debtors.


In today’s world everyone needs to be sure that you NEVER GIVE OUT OUT PERSONAL INFORMATION to any unverified source, and you certainly don’t sign over your house without getting absolute confirmation that you have to do so.

If you have had any contact like this, you should contact your bankruptcy attorney immediately, and if you don’t have a lawyer, call your bankruptcy Trustee at a number that you get from the Court website, the Yellow Pages or some source that you are sure is a reliable phone number.

This is the second bankruptcy scam I have heard about where people were scammed. In the other, people were called and told that a fictitious bankruptcy hearing was scheduled and they needed to make a payment by credit card in order to avoid having to go to Court.

I suppose we may look forward to other scams targeting all bankruptcy debtors in both Chapter 7 or Chapter 13. Since so much of a debtor’s personal information is contained in their petition, and since it is available to the public, scammers can access information to trick debtors into thinking that the scammer is legitimate.

Every day a new scam pops up, whether it is an inheritance from a long lost relative, or targeted to a bankruptcy debtor in the disguise of coming from the court system.

The first thing that should tip you off that this scheme is a scam is that Chapter 13 Trustee’s don’t contact clients who are represented by a lawyer for any substantial matters.

They might send out reports, as they do in my district, but if you have a lawyer the Chapter 13 Trustees would never issue such a request without your lawyer’s knowledge and help.

Second, to force a debtor to sign over property to a Trustee would require a Court Hearing in front of the Judge in the case, and the debtor would always be notified of a time and place of the hearing.

The hearing will take place at the official place your bankruptcy court holds hearings. If you receive notice of a hearing, you should ALWAYS appear at the hearing if you don’t have a lawyer. If you have a lawyer, your lawyer will often appear at hearings in your place, but you need to discuss this with your lawyer.

Third, I can safely say that no actual Chapter 13 Trustee in this country would ever send a letter to a client asking them to sign over their homes without a Judge’s Order, since no Chapter 13 Trustee would ever WANT a debtor’s house to be signed over to them. Chapter 13 Trustees are not in the house owning business and never take legal title to property without very stringent oversight or guidelines.

Also, Chapter 13 Trustees usually don’t have 800 numbers, since most cases involve local clients and they aren’t the type of business that absorbs the long distance costs of people who call them.

To read my article on the Credit Law Network outlining see: Fraudulent Scheme Involves Utah Bankruptcy Court

By Susanne Robicsek, Charlotte NC Bankruptcy Lawyer

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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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