Document Preparers or Paralegals Ripping Off Consumers
Published On: November 28, 2018
ANOTHER DOCUMENT PREPARATION SERVICE IN TROUBLE FOR NOT FOLLOWING THE LAW – SAUNDRA EHRHARDT and AIRHARDT ENFORCEMENT SERVICE
In re Munoz, 2:19-bk-05828 (7/3/2019)Judge Collins, Arizona bankruptcy judge, found Ms. Ehrhardt violated bankruptcy law and forced her to return the money paid by her “clients, plus fines for these illegal actions. She is also barred from preparing bankruptcy documents in Arizona.
November 2018: The Arizona Supreme Court established a committee to review the current process authorizing documents preparers to do certain work normally done by attorneys. Administrative Order 2018-111
The following is part of a discussion by fellow attorneys who describe some very expensive mistakes created by document preparers or paralegals (the Arizona Supreme Court does not allow them to call themselves paralegals).
Document Preparers are not permitted to give legal advice which leads to people losing their tax refunds and more.
Document preparers are regularly involved in filing Bankruptcies for better or worse. There are some very able document preparers and there are some that create plenty of trouble for pro se debtors; the Self-Help Center see this all of the time. The problem in bankruptcy is that is impossible to be a document preparer without giving legal advice as to vehicle reaffirmations and declaration of exempts (otherwise the “document preparer” is just a typist).
Document preparers do not warn people about the problems with filing bankruptcy.
With that caveat, I have seen a lot of bad work. I have seen where PCs were charged $3,000-$4,000 for bad documents that were not in the client’s best interest. Many of these said documents, I would have done for $2,000 or less.
Document Preparers preying on Hispanic and other minority communities
In my experience, this particularly pervasive in Hispanic communities where lawyers have a huge stigma, but it is the document preparers that they should be fearful of.
I have routinely seen doc preparers swindle one party; they draft Consent Decrees or Rule 69 Agreements that are overly favorable for one party and that they sign without understanding.
Recently, I have seen:
a Consent Decree where the parties agreed to Father paying 300% more than the child support guidelines suggested;
Someone paid $3,000 to Respond to an uncontested divorce and was considering an additional $4,000 for the doc preparer to draft a Consent Decree – No children, no assets, no debt;
And a couple was quoted $5,000 to draft mediation agreements when their combined income was well under $60,000.
So to throw another monkey wrench into this, what about LegalZoom? Is this a document preparer? I can’t tell you how many cases I’ve had to unwind or attempt to unwind after folks got their operating agreements from Legal Zoom and agreed that Delaware LLC law applied to this small AZ company.
Flyers Left on Doorsteps Lead to Cease and Desist Order of Non-Lawyer
If it is “too good to be true” – then it is a scam. Someone is always happy to take you hard-earned money.
PHOENIX – Nov. 16, 2018 – A Judgment of Default and Cease and Desist Order was issued by Pinal County Superior Court Judge against Barry L. Cox for engaging in the unauthorized practice of law in Arizona.
The order stems from a complaint filed by the State Bar of Arizona after Cox advertised estate planning services.
A flyer reading “Estate Planning Documents” was left on several San Tan Valley residents’ doorsteps listing a menu of services and identified Cox as “Barry L. Cox, Esq., Legal Document Writer.” In its complaint, the Bar asserted that offering estate planning services, identifying himself as a legal document writer, and using the “Esq.” designation for lawyers led the public to believe he was authorized to practice law in Arizona.
The State Bar found that Cox had never been authorized by the Arizona Supreme Court to engage in the practice of law in Arizona nor certified as a legal document preparer.
On Nov. 9, 2018, Barry L. Cox, and any corporate or business entity owned, controlled or operated by him, was ordered to immediately and permanently cease and desist from engaging in the unauthorized practice of law in Arizona and enjoined from using the designations “lawyer,” “attorney at law,” “counselor at law,” “law,” “law office,” “J.D.,” “Esq.,” or equivalent words. He must also pay for costs and expenses associated with the State Bar of Arizona’s investigation.
MUSINGS BY DIANE:
Bankruptcy is a very complicated Rubik’s cube in even simple cases and everyone has a right to know how bankruptcy can cause serious damage (lose tax refunds, have family sued or other really bad results.
I am not trying to scare people, but instead to inform them. Whether they hire our office or another good bankruptcy attorney (I give referrals out all the time), my goal is to educate everyone – even document preparers and fellow lawyers.
By Diane Drain|Published On: November 28th, 2018|Last Updated: July 14th, 2022|
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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You and Jay are the best attorneys I have ever had or needed and thank God for the Honorable Robert Gottsfield in recommending you folks – I would have never made it through the entire process without you and Jay and God Bless you both always and stay in touch as well. You folks are the BEST OF THE BEST in Arizona.
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