Two bankruptcy petition preparers that lacked legal credentials yet provided legal advice and disregarded disclosure requirements were barred from providing bankruptcy-related services, thanks to enforcement actions by the Justice Department’s U.S. Trustee Program (USTP).
On January 18, the Bankruptcy Court for the District of Maryland entered an order permanently enjoining CA Enterprises, doing business as Premier Services and Premier Legal Services, from operating in the district. The order resolved a complaint filed by the U.S. Trustee’s office in Greenbelt, Maryland, and required Premier to refund $2,000 to the debtor in the case.
And on January 26, the Bankruptcy Court for the Eastern District of Virginia permanently enjoined Malynda Perez-Combs from operating in that jurisdiction. Perez-Combs – who did not defend against a complaint filed by the U.S. Trustee’s office in Norfolk, Virginia – was also fined $15,000, ordered to return $300 in fees and pay $2,000 in statutory damages to the debtor.
“Unscrupulous bankruptcy petition preparers prey on vulnerable debtors,” said Director Tara Twomey of the Executive Office for U.S. Trustees. “To protect consumer debtors, the Program stands firm in its commitment to keep fraudsters and scammers out of the bankruptcy system.”
The Bankruptcy Code strictly regulates the services of bankruptcy petition preparers, commonly known as BPPs. BPPs are not attorneys, cannot give legal advice or practice law and generally are limited to typing information provided by debtors into bankruptcy forms for the debtors to file. The Code requires BPPs to disclose information about their fees and their services to the debtors and to the bankruptcy court.
In the Maryland case, the debtor retained Premier and provided financial documents, believing the company would help her apply for a loan modification or other loan workout to stop a foreclosure on her home. Instead of working with the debtor’s mortgage lender, Premier emailed the debtor a completed chapter 13 bankruptcy petition and Social Security verification form and instructed her to file them with the bankruptcy court.
The debtor in the Virginia case hired Perez-Combs to prepare her bankruptcy documents. Perez-Combs recommended filing a case under chapter 7 and repeatedly provided other impermissible legal advice and engaged in the unauthorized practice of law. For example, Perez-Combs determined how the debtor’s assets and liabilities should be characterized on the bankruptcy schedules and selected exemptions that were legally inapplicable. Perez-Combs, who has repeatedly engaged in similar conduct in other cases in other jurisdictions, did not respond to or otherwise defend against the U.S. Trustee’s complaint.
The USTP’s mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders – debtors, creditors and the public. The USTP consists of 21 regions with 89 field offices nationwide and an Executive Office in Washington, D.C. Learn more about the Program at www.justice.gov/ust.
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