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Better Business Bureau issues warning against 'bankruptcy' firm

The owner of a firm calling itself the Affordable Law Center is facing law suits in Colorado and other states for allegedly providing legal services it is not qualified to offer. According to the President and CEO of the Better Business Bureau, there is a "clear pattern of deception" on the part of ALC when it advertises that the firm offers legal expertise in bankruptcy filings when, in fact, the firm does not have a single attorney on its staff.

In 2005, the federal government changed some of the rules for filing bankruptcy and in doing so made the paperwork process a bit more complex in certain cases. This in turn increased the cost of filing for business and personal bankruptcy and in some cases put bankruptcy out of the financial reach of up to 1 million consumers. Another result has been an increase in fraudulent businesses offering low-cost debt consolidation or bankruptcy services, such as ALC is accused of doing.

According to the ALC website, they bill themselves as a life-saver for financially-strapped consumers by offering bankruptcy services for a third of the average cost, according to research reported by the National Bureau of Economic Research. The costs for filing for bankruptcy are leading many consumers to seek debt relief with credit counseling services and other official or legal-sounding agencies who promise guidance for pennies compared to the price at legitimate legal counseling services. And often without the results consumers are told to expect.

The Better Business Bureau advises those considering filing for Chapter 7 bankruptcy to check out the BBB's report on a company before doing business with them. Some bankruptcy attorneys in the Denver area offer free initial consultations to help you determine what the right approach to debt relief is in your specific situation. If you are considering personal bankruptcy, do your homework before signing up with an agency and know you are getting honest advice and guidance in your quest for relief from debt.

Source: Business Insider, "The BBB's Investigating A Company That Allegedly Posed As A Bankruptcy Firm," Zachry Floro, June 26, 2012

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