National Consumer Bankruptcy Law Firm Agrees to Pay Over $ 300,000 in Consumer Relief and Six-Year Practice Ban in Settlement with US Trustee Program | Takeover bid
The Department of Justice’s US Trustee Program (USTP) has entered into an agreement with the national consumer bankruptcy law firm Deighan Law LLC, formerly known as Law Solutions Chicago and doing business as ‘UpRight Law (UpRight). The settlement is set out in a consent order issued by the Montana District Bankruptcy Court on March 9 and resolves enforcement actions filed by the USTP regarding allegations of misconduct regarding UpRight’s representation of Montana consumers in as debtors or potential debtors in bankruptcy cases. As stipulated in the settlement, UpRight has paid or will pay more than $ 300,000 in monetary relief and will be prohibited from representing bankrupt clients in Montana for six years.
As a result of dozens of USTP actions filed since 2016, UpRight has paid or was ordered to pay almost $ 900,000 in monetary relief, including reimbursement of costs to more than 500 affected consumers and payment of legal penalties. , legal fees and costs. Additionally, bankruptcy courts have imposed practice bans against UpRight in at least four jurisdictions.
“Lawyers who misrepresent their services to vulnerable clients and break their promises harm debtors, creditors and the integrity of the bankruptcy system,” said Cliff White, Director of USTP. “This settlement shows that the USTP will continue to hold lawyers accountable who do not properly and honestly represent their clients.”
In the present case, the USTP alleged that UpRight engaged in wrongdoing and misrepresentation affecting hundreds of consumers in Montana, which came to light as a result of investigations conducted by the USTP in two bankruptcy cases. In one case, UpRight significantly delayed filing its client’s bankruptcy case for almost a year after falsely claiming it had a local lawyer licensed in Montana to file the case. UpRight’s delay led a creditor to garnish more than $ 6,000 of the debtor’s salary. In the other case, UpRight secured payment for its attorney fees by advising debtors to participate in an inappropriate plan whereby they turned over their vehicle to an out-of-state towing company. Another bankruptcy court has previously sanctioned UpRight for implementing the towing program – which it has used in more than 200 cases across the country – describing it as a “scam from the start,” and owners of the towing company were indicted for their role in the program. UpRight’s advice led debtors to be sued by their auto lender for the conversion of their collateral.
In the settlement, UpRight does not dispute the USTP’s allegations that it erred in its dealings with Montana consumers, including claiming it had a sufficient number of licensed local attorneys. in Montana for providing adequate representation in bankruptcy, misrepresenting clients the extent of legal services to be provided and the cost of such services, failing to provide clients with timely written agency contracts that clearly and visibly explained the legal services to be provided and the cost of those services, failing to discuss non-bankruptcy alternatives, failing to adequately supervise the firm’s non-lawyer staff (some of whom were engaged in unauthorized practice of law) , providing erroneous legal advice and failing to adequately supervise its Montana “partner” lawyers. This misconduct contributed to UpRight’s substantial delay in filing bankruptcy cases for Montana consumers. Additionally, UpRight filed bankruptcy cases for just 109 of the 473 Montana customers from whom the company received at least partial fees.
To resolve the USTP’s allegations of misconduct, UpRight has reimbursed or will reimburse more than $ 300,000 in fees paid by consumers in Montana for whom UpRight has never filed for bankruptcy. UpRight also agreed to pay a civil fine of $ 10,309 and reimburse all costs, totaling $ 3,770, to debtors in the two cases in which the USTP brought its enforcement actions. Additionally, UpRight will not be permitted to accept bankrupt customers or provide bankruptcy services to consumers in Montana, from July 2, 2018 through July 2, 2024.
Although the agreement resolves disputes with the USTP in the two underlying bankruptcy cases, it does not affect the rights of the debtors in those cases or of any other party or government agency not participating in the bankruptcy. regulations, including other Montana consumers, or the USTP’s rights to sue UpRight in other jurisdictions or to seek relief in other Montana cases. The two underlying cases are captioned About Dailey, case n ° 15-61088-7 (Bankr. D. Mont.), and In the case of Emerson, Case No. 16-60056-7 (Bankr. D. Mont.).
The US Trustee Program is the part of the Department of Justice that protects the integrity of the bankruptcy system by overseeing business administration and advocating for the application of bankruptcy laws. The program has 21 regions and 90 field offices. To learn more about the program, visit: https://www.justice.gov/ust.