The recent arrest of a California couple has placed a spotlight on the issue of consumer scams in relation to bankruptcy. The pair allegedly ran a debt relief business that defrauded consumers of as much as $120,000. The story is a cautionary tale for consumers who are attempting to stave off a bankruptcy filing by looking for a quick fix in the form of debt relief services.
Investigators believe that the couple placed ads in a variety of outlets that would attract primarily Hispanic clients. Once those clients approached the suspects for help with a debt load, the couple offered a range of services such as credit repair, loan modification and a scheme that promised to find “investors” who would purchase the clients’ homes then allow them to stay on as tenants.
In the end, investigators believe that at least 25 to 30 clients paid up front for services that they never received, although more victims may be identified as the investigation continues.
After the Federal Bureau of Investigation began looking into the matter, the man and woman were charged with defrauding distressed homeowners. The pair is also accused of filing fraudulent bankruptcies and conspiring to commit bankruptcy fraud. If convicted, they face between 20 and 25 years in prison.
Consumers who are overwhelmed with debt should be wary of businesses that offer a quick-fix solution. In addition, for Stockton-area residents who are considering bankruptcy, it is imperative to determine whether an individual offering such services is a legitimate legal professional or is part of a scam operation.
While no one anticipates having to file for bankruptcy, the latest recession has left many California consumers with little other choice. A successful bankruptcy filing can not only offer debt relief in the form of elimination of consumer debt; it can also provide the foundation for a fresh financial start.
Source: Imperial Valley News, “Couple Arrested for Loan Modification and Foreclosure Rescue Scheme,” Oct. 1, 2012