Outfit Suspected Of Running Loan Mod, Bankruptcy Petition-Preparing Racket Slammed With Bay State AG Civil Suit; Currently Also Faces Concurrent Disgorgement Proceedings Brought By U.S. Trustee

In Lawrence, Massachusetts, the Eagle Tribune reports:

• As a last resort, Pinnacle Financial Consulting LLC advised their clients they needed to file bankruptcy petitions to save their homes.
  
  “When their loan modification efforts fail, sometimes just days before the distressed homeowner’s home is scheduled to be sold at foreclosure, defendants pressure distressed homeowners into paying defendants thousands of dollars to file bankruptcy on their behalf in order to delay the foreclosure sale,” according to a lawsuit the state Attorney General’s Office filed against the downtown business.
  
  But about a quarter of the bankruptcy cases prepared by Pinnacle Financial were defective, according to court records filed in connection with the complaint.
  
  “Defendants’ bankruptcy filings on behalf of consumers are often incomplete or consist of erroneous paperwork, ultimately resulting in the dismissal of the bankruptcy proceedings,” the lawsuit alleged.
  
  “The U.S. Bankruptcy Trustee of Region I, District of Massachusetts, has identified, and the Commonwealth is aware of, 107 bankruptcy cases initiated by Defendants, at least 27 of which had fundamental defects in the documents Defendants prepared and filed,” the complaint noted.
  
  In eight of those cases, the U.S. Trustee has initiated disgorgement proceedings against defendants for illegally-prepared bankruptcy petitions.

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• The Attorney General’s Office maintains in its lawsuit that Pinnacle’s solicitation and acceptance of advance fees for loan modification and preparation of bankruptcy petitions was illegal.
  
  A Suffolk County Superior Court judge recently issued a preliminary injunction which prohibits Pinnacle from soliciting or receiving any fees for loan modification services, bankruptcy petition preparation services and investment advising services.

For more, see AG: Pinnacle clients paid for defective bankruptcy petitions.