CHICAGO (CBS) – Bankruptcy filings are soaring in the Chicago area and more people are looking for legal help from low-cost law firms. CBS 2 Investigator Pam Zekman checked out mistakes made by a law firm that claims to be one of the largest in the country.
Tracy Diaz was shocked when she saw someone else’s debts on a draft version of her bankruptcy petition prepared by a law firm.
“We found that they had pulled the wrong credit information,” she said. “I think that’s a huge mistake. We paid for a service that we didn’t get.”
After another client, who asked us to conceal his identity, corrected mistakes on a draft the law firm prepared for his bankruptcy petition, “Lo and behold, we show up to court and none of these corrections had been made,” the client said. “The income figures were way off.”
Both had used the law firm of Macey and Aleman, which markets itself as Legal Helpers. Its website says Legal Helpers provides clients with “great service” for “low fees” and “experienced” attorneys.
But former clients told us the high volume firm headquartered at Willis Tower repeatedly lost documents they had to submit over and over again, like pay stubs and other records needed to file their bankruptcy petition.
And, clients said, they constantly had lots of trouble even talking with an attorney.
The Better Business Bureau has given Legal Helpers an “F” rating based on all kinds of complaints it has received in the last three years from 136 clients of Legal Helpers.
“I was devastated,” said Doris Just.
Devastated, she says, because she was misled from the beginning when she inquired about filing a Chapter 13 Bankruptcy petition to repay $80,000 in debts.
“They said it was going to be interest-free, which is why I went with them,” she said.
But her final five-year plan required her to pay 8.25 percent interest and 100 percent of her debt, because the home appraisal used by Legal Helpers was done online and obviously erroneous.
And Legal Helpers failed to revise her plan after additional creditors filed claims.
“We had really a tragedy of errors,” said David P. Leibowitz, an experienced bankruptcy attorney, who reviewed the case for us.
“Bottom line here is we just had a systemic failure from start to finish. The valuation was wrong, the plan didn’t add up. And then no one caught it for four years,” said Leibowitz, who also said it’s a problem that could have been caught in the first few months of the case.
Over those four years, Just made every payment required by the bankruptcy court: a total of $63,000 of the $80,000 she owed.
But a bankruptcy trustee realized that she could not possibly finish the plan within the five years allowed, and the case was dismissed.
Because of all that interest, she’s now left owing $47,000 to credit card companies that can now charge her much higher interest.
“So she might be finding herself even in a bigger hole than she was four years ago,” Leibowitz said.
When she heard what happened, Just said, “I’m like, ‘oh my God, what am I going to do here?’ I have been in tears for the last month.”
After reviewing the file, Richard Gustafson, a partner in the law firm of Macey and Aleman, told CBS that Legal Helpers would file a new bankruptcy petition to help Doris Just free of charge and “make things right.”
In a written statement, Gustafson also said Legal Helpers “has addressed every complaint and has taken all reasonable steps to accommodate and satisfy all clients and former clients whenever possible.”
He said Legal Helpers “takes seriously its professional obligations to the courts and its clients, including the obligation to refund money to clients who decide not to proceed with their cases, whatever the reason.”
For example, he said Legal Helpers gave Tracy Diaz a $730 refund, out of the $1,600 in fees she had paid.
After corrections were made on the bankruptcy petition filed by the other client in this report, he continued to use the firm.
Gustafson noted that Legal Helpers periodically uses client satisfaction surveys, which show they “overwhelmingly rate their experience with Legal Helpers as ‘very good’ to ‘excellent.’”
And he said, “Legal Helpers has been successfully representing consumers in bankruptcy since 1994 and has filed more than 182,000 bankruptcy cases across 20 states. He said it has also “given valuable legal advice and services to over 351,000 consumers.”
Experts say that regardless of which attorney you hire to handle a bankruptcy, you should carefully read all papers prepared for you to be sure there are no errors, and if there is something that concerns you, consult with your attorney immediately.
For websites that can provide valuable information on bankruptcy, click the links below.
The Illinois Supreme Court’s Attorney Registration and Disciplinary Commission handles complaints about attorneys. You can reach them at (312) 565-2600.