Avoiding Bankruptcy Scams in Missouri: Protect Yourself

November 3, 2024
Kelvin Birk
Bankruptcy

When your debts and unpaid bills have become overwhelming and you are considering filing for bankruptcy, you are very vulnerable to being a victim of bankruptcy scams. Bankruptcy scams are fraudulent schemes that attempt to take advantage of people facing financial difficulties, and they can also be perpetrated by people who try to abuse the bankruptcy system. Scam victims find themselves bilked out of their money, and they still face the dire consequences of not being able to pay their bills.

Anyone facing the prospect of bankruptcy should be wary of any offer that seems too good to be true, tries to sell you unnecessary products and services, or makes outlandish promises to turn your financial life around. You should be aware of the common bankruptcy scams and how to avoid them. Seek the services of a legitimate and experienced bankruptcy attorney who can evaluate your situation, explain your options and what they will cost, and offer legal guidance to help you through the process.

Common Bankruptcy Scams in Missouri

With the increased personal information now available online, bankruptcy scams have increased as well. Scammers may impersonate lawyers, courts, and government officials; they may promise to reduce or eliminate your debts, but instead charge huge fees for poor results so that you are left sinking further into debt with your credit rating trashed.

Here are some common bankruptcy scams to be aware of in Missouri:

Bankruptcy mills: These are high-volume law firms that provide minimal personalized attention, increasing the risk of errors and case dismissals. They may offer “zero down” or “no money down” bankruptcies, with similar results.
Fraudulent debt elimination schemes: These scams use dubious legal theories and charge hefty fees for documents purporting to absolve the individual of their debts, but these documents have no basis in law and will not help avoid bankruptcy.
Mortgage rescue scams: Scammers promise to help with mortgage problems but instead file for bankruptcy without the homeowner’s knowledge, potentially leading to foreclosure.
Credit repair scams: These scammers promise to repair credit and boost your credit score quickly, but often use illegal tactics or make false promises. Improving credit scores needs to be done by building your payment record over time.
Fraudulent “debt management” or “credit counseling” services: Instead of reducing or eliminating your debts, these companies enroll you in a service that does little to address your financial troubles, charges huge fees for poor results, and wastes years you could have used to rebuild your credit.
Fake or phantom debt collection schemes‍: Scammers attempt to collect on a debt that either doesn’t exist, has already been paid, or is beyond the statute of limitations. They may pretend to be attorneys or law enforcement and threaten legal action or severe consequences if you do not pay immediately.

Red Flags to Watch Out For

Bankruptcy courts take the filing of a bankruptcy very seriously and try to preserve the integrity of the bankruptcy system, but scammers keep finding ways to take advantage of people with debt issues. Here are some red flags to watch out for that may indicate someone is trying to perpetrate a bankruptcy scam:

Suspicious communications: Unsolicited letters or calls claiming your bankruptcy case has been dismissed or that you must contact someone within 24-48 hours about your bankruptcy. You may receive communications from scammers impersonating your attorney, the court, or a bankruptcy trustee, so verify any suspicious communications.
Unrealistic offers and promises: Scammers promise to eliminate your debt or boost your credit score quickly using dubious legal theories that sound too good to be true.
Unusual payment requests: Scammers demand payment via prepaid cards, cash, or other unusual methods, or they ask for payment of upfront fees before providing any services.
Pressure tactics: You receive high-pressure sales techniques urging you to act immediately or attempts to get you to voluntarily dismiss your bankruptcy filing or sign blank forms you do not fully understand.
Lack of credentials and information: The companies or individuals pretending to help lack proper licensing or credentials and fail to provide detailed information about their services. There are discrepancies between promises they make orally and written agreements they try to get you to sign. They give you vague or misleading information about the bankruptcy process and make promises for quick fixes they are unable to provide.

How to Protect Yourself

With bankruptcy scams so common, it is important to be skeptical of unsolicited offers, verify all official communications directly with the court or your attorney, and take steps to protect yourself. The following are some tips as to how to do so:

Start by finding a legitimate licensed bankruptcy attorney to evaluate your individual situation and determine whether bankruptcy is right for you and, if so, which type. Your attorney can gather information and file all paperwork properly, provide legal advice, represent you in court, and prevent your being taken advantage of by scammers. Do not use a “bankruptcy preparer” or “document preparation service,” and avoid making any decisions without consulting your lawyer.
Be wary of any promises of quick fixes or claims to stop foreclosure or eliminate all your debt. No one should charge upfront fees before providing services, insist that you stop communicating with creditors, or ask you to transfer property titles or make mortgage payments to them. Do not pay anyone who demands that you pay immediately or with an unusual form of payment. Avoid “zero down” or “no money down” bankruptcy offers that often cost more in the long run.
Research any bankruptcy attorney or debt management firm thoroughly before hiring, and check their customer reviews, credentials, and disciplinary record with the Missouri Bar Association.
Be cautious of anyone pressuring you to file bankruptcy quickly without fully explaining your options or having you sign blank forms or documents you don’t fully understand. Get written verification of the debt and a written fee agreement that clearly outlines all costs before proceeding. Understand the terms of any agreement before signing.
Never provide personal or financial information to anyone who calls you, including your date of birth, Social Security number, banking information, or email address. You are under no obligation to talk to debt collectors or answer questions.

Get Help Avoiding Missouri Bankruptcy Scams

The best way to avoid Missouri bankruptcy scams is to work directly with an experienced, licensed bankruptcy attorney who can guide you through the legitimate process.

Bankruptcy is not something to be entered lightly, but when done properly, it can relieve stress and allow you to move on with your life. Bankruptcy laws are complicated, scams are prevalent, and making mistakes can be costly and result in not getting your debts eliminated. The skilled and compassionate lawyers at the Birk Law Firm can provide guidance and take care of all necessary legal hurdles and requirements to help achieve the best result possible.

Attorney Kelvin Birk is a Certified Public Accountant as well as a lawyer, with more than 30 years of experience in accounting and tax and business consulting. He knows how to avoid bankruptcy scams and obtain the fresh financial start a legitimate bankruptcy can bring.

Call us today for a free consultation to discuss your individual situation and get started on the road to a brighter financial future.

FREE CONSULT CALL NOW 573-332-8585

Attorney Kelvin Birk

Kelvin Birk is a lawyer as well as a certified public accountant, with more than 30 years of experience in accounting and tax and business consulting, and more than 20 years of experience in numerous legal matters. This combined expertise allows our law firm to provide a level of service above that of other firms. Whatever your legal situation, your attorney at Birk Law Firm can counsel you as to the tax implications. We have experience in providing myriad legal representation services to residents of southeast Missouri and other areas.. [ Attorney Bio ]