Bankruptcy

A Word of Caution: Foreclosure Prevention Counselors

By Bill McLeod, Esq.

There are a number non-profit organizations in Metro-Boston (and state wide) that provide mortgage and foreclosure assistance to homeowners facing foreclosure. Over the last several months, I have personally encountered situations where these (for lack of a better term) foreclosure prevention counselors have actually caused more harm than good (or at least have the potential to). Consumers seeking assistance of these non-profits need to be aware of a few things.

Firstly, they are not lawyers. They cannot provide legal advice. If any of these counselors tell you to do something that involves invoking a legal right ? such as filing a bankruptcy petition ? then you should seek the advice of an attorney.

I had a client who was told by a foreclosure prevention counselor to ?just go down to the court and file bankruptcy so you can get the [automatic] stay? so that a foreclosure auction could be avoided. The problem is the client did not have a credit counseling certificate, and had no clue about the consequences of filing the case without proper preparation. His case was dismissed. In addition, had the counselor been properly trained, the counselor would have known that this individual needed bankruptcy from the get-go, not the services of the non-profit.

Full post as published by McLeod Law Offices on March 27, 2008 (boomark / email).