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Bare Bones Filing Scam #1

With this type of scam, the scammer will make a promise to the homeowner that he can help stop his home from going into foreclosure by offering to negotiate with his lender to stop the sale. The scammer does this by convincing the lender that he can have the loan refinanced or sold by a date certain. The scammer will charge the homeowner upfront fees for the service and request that he is given all of the victims confidential and proprietary information (SSN, date of birth, etc.) Instead of fulfilling the promise of negotiating with the lender, the scammer files a bankruptcy petition on behalf of the homeowner and without their knowledge and/or permission. What the bankruptcy does is it stops the foreclosure in its tracks, but it requires the homeowner to participate in a very complex set of legal requirements under the bankruptcy code. The scammers normally will file what is known in the bankruptcy industry as a "bare-bones filing." A bare-bones filing requires little or no effort to file and can cost less than $50.00 if a homeowner or scammer asks the court for a payment plan. The bankruptcy can aggravate the homeowner's already sensitive credit rating because once the bankruptcy is filed, it serves as a hit on your credit report for at least the next ten years.

Bankruptcy Preparer Scam #2

The scammer will hold himself out as being able to stop the foreclosure by filing a bankruptcy petition on behalf of the homeowner. Unlike the first scenario, the homeowner is aware that the scammer will file a bankruptcy to stop the sale. What the homeowner does not realize, and what the scammer fails to disclose, is that his services are limited. The scammer cannot provide any guidance on the bankruptcy laws and his job is only to type the bankruptcy application. The proper name for a company or person that provides this type of service is called a Bankruptcy Preparer(s). The scammer understands that the homeowner will rely on him for help throughout the bankruptcy process. What the scammer does is charge high fees for the mere typing of the bankruptcy petition and once the bankruptcy petition is filed and the fees are paid, the scammer does nothing else to assist the homeowner with the bankruptcy process because he or she is not a lawyer and will not be recognized as proper legal assistance by the court. The fees that the preparer charge morro what a true bankruptcy attorney charges. The difference is the bankruptcy lawyer can give advice and participate in the full process of the bankruptcy.