Foreclosure Delay Scheme - Bankruptcy Abuse

11 U.S. Code § 110 - Penalty for persons who negligently or fraudulently prepare bankruptcy petitions. https://www.law.cornell.edu/uscode/text/11/110 

The most common resources that most if not all Loan Modification Shops would tell their customers if a "Sale/Auction Date" is coming up is to file a "Skeleton Bankruptcy" or "Emergency Petition Filing" they would call it for most bankruptcy cases or petitions, and “skeletal” petitions, are terms that are used fairly often in the Bankruptcy world and you may come across the terms in various websites (such as this one). The terms are related, but have different meanings.

An “emergency” Bankruptcy case is, as the name implies, a Bankruptcy case that has to be filed quickly to stop an event that is about to happen. That could be a foreclosure, an eviction, a trial, judgment, vehicle repossession or any number of other things. Immediately upon the filing of the case (literally, the very instant the clerk stamps the petition), the automatic stay takes effect to stop these events. However, the problem arises when a non-attorney provides any legal advice as to when or which bankruptcy should a consumer file and in this case there are consumers coerce into filing for bankruptcy not knowing the repercussion a bankruptcy can do to their situation. Be careful when someone who is a non-attorney provide you with any legal advice and always seek advice from a licensed bankruptcy attorney.

There are many paralegals or "Bankruptcy Petition Preparer" must uphold Bankruptcy Petition Preparer Guidelines and steer clear from any petition preparer who refuses to abide by the law follow the correct procedures when preparing a petition for its debtor. Below is a breakdown of what to watch for before hiring a paralegal or petition preparer to file your bankruptcy case.

Violations can be costly for these paralegals. Report this immediately to U.S Department of Justice Trustee if you are a victim of this unlawful practice by a paid petition preparer by visiting here and select the state you are located.

Bankruptcy Petition Preparer