Bankruptcy Filers Beware: Con-Artists Posing As Attorneys

Telephone-Scam Soliciting Wire Transfers Prompts NACBA and Vermont Attorney General to Issue Consumer Warning

Across the country, consumers are falling prey to a new scam targeting people who have filed for bankruptcy and others just getting started with the process. Bankruptcy attorneys are joining forces with public officials to sound the alarm bell to unsuspecting consumers.

The con artists are using software that 'spoofs' the Caller ID system so that the call appears to be originating from the phone line of the consumer’s bankruptcy attorney. Victims of the scam are being instructed to immediately wire money to satisfy a debt that supposedly is outside the bankruptcy proceeding. Some consumers have been threatened with arrest if they fail to wire money to pay the debt.

In some instances, the perpetrators are using personal information from public filings to identify consumers, assume the identity of their attorneys and sound more convincing by phone. These calls are typically placed during nonbusiness hours, making it difficult for clients to verify the call by getting in touch with their attorney to ask about it.

National Association of Consumer Bankruptcy Attorneys (NACBA) and its individual members want consumers to know that under no circumstance would a bankruptcy attorney or staff member telephone a client and ask for a wire transfer immediately to satisfy a debt. Nor would the bankruptcy attorney and staff ever threaten arrest if a debt isn’t paid. The United States Court System has posted a bulletin and warnings have been posted in the states of Virginia and Vermont as well.

Consumers should be advised that legitimate debt collectors and agencies cannot threaten arrest in order to satisfy. If you or a family member receive this kind of call, the best thing to do is to hang up and contact your bankruptcy attorney as soon as possible. Do NOT give out any personal or financial account information to the caller.

My office will never call after hours and you should always verify any such instruction by emailing me directly if you should receive such a call.

How Long Does Bad Credit Stay on My Credit Report?

This is a question that comes up regularly in my office and it recently turned up on If you are bad with paying your debts on time, that history stays on your credit report for a full seven years. So Gerri Detweiler asked me that question.

Why seven years? It turns out that there is no particular reason other than a compromise between the Senate and the House when the Fair Credit Reporting Act was being drafted was back in the late 1960’s. It has nothing to do with the Bible or the Statute of Limitations for collection of a debt. It was just an arbitrary time period picked by elected representatives as a “reasonable” time.

Is it reasonable? The answer is that your history is in the past. If you do things to manage your debt better now and pay everything onetime, most lenders will take that into consideration. While no one knows exactly what does into your credit score, time has to be a factor.

Can a Debt Collector Grab My Bank Accounts?

Recently, Gene Melchionne was interviewed by writers for on the question of seizure of bank accounts. The interview was later picked up by MSN Money and Yahoo Finance because of the importance of the question.

When collecting delinquent accounts, collectors will many times claim to be able to seize bank accounts for the payment of the debt. It’s not so easy. But it is possible. In most cases, you need to be sued first, unless the bank account is with the same institution where the money owed. Read the article on for more.

Gene Melchionne Interviews Gerri Detweiler on Podcast

IF you aren’t listening to the Money Go Roundtable Podcast, you should. Recently, Gene Melchionne interviewed Gerri Detweiler of Talk Credit Radio and about credit reports. IF you want to know about credit reporting, credit scores and what it all means, take a listen to this podcast episode.

Law School Grads Looking At Bankruptcy

This week, the Connecticut Law Tribune published an article on student loans, law schools and the current economy. It is no mystery that recent graduates from colleges are having a hard time finding a job. Compound that with the expense of attending graduate school for an advanced degree and then pile the time and money spent on something like law school. It is no small wonder that law school graduates are both having a hard time finding a job AND paying their student loans. The result? Yound lawyers looking at filing bankruptcy.

The author of the article turned to well-known
Student Loan Lawyer, Josh Cohen, and Attorney Melchionne for an insight on both the scope of the problem and the remedy. The sad end to this story is the same for most young people struggling with student loans; there is no escape in bankruptcy for any student loan. For more, see the story here.