Bankr. E.D.N.C.: In re Bowen- Illegal Bankruptcy Petition Preparer

Summary:

In an action brought by the Bankruptcy Administrator,  the bankruptcy court sanctioned Informational Services Group, Inc. (ISG), TNT Rapid Refund, LLC (TNT), and Berdina and Talia Wright for illegal bankruptcy petition preparation and debt relief services provided to James Davis Bowen, Jr. The court found that the Wrights filed a bankruptcy petition on Bowen's behalf without his consent, failed to inform him of necessary filings, and did not comply with various legal requirements for petition preparers and debt relief agencies. The Respondents misled Bowen into thinking they would help with his mortgage delinquency but instead filed an unauthorized bankruptcy petition, causing further financial harm.

The court imposed several penalties on the Wrights and their business entities:

1. Fines of $15,000 for violating bankruptcy code requirements.
2. Ordered them to return $1,720 in fees and pay $10,434.30 in sanctions to Bowen for actual damages and additional penalties.
3. A $10,000 civil penalty for violations of debt relief agency laws.
4. A permanent injunction preventing them from preparing petitions or providing debt relief services in the district.

As noted by Judge Warren,  this is far from the first time the Wrights have been sanctioned for this.  See In re Farrow, No. 19-04431-5-JNC, ECF 94 (Bankr.

E.D.N.C. Nov. 16, 2020); Gargula v. Wright (In re Alexander), No. 20-04002-JTL, ECF 18 (Bankr. M.D. Ga. Apr. 9, 2020); Gargula v. Wright (In re Mills), No. 17-01025-SDB, ECF 123 (Bankr. S.D. Ga. May 14, 2019); McDermott v. Wright (In re Mahone), No. 18-04016-JTL, ECF 8, 9 (Bankr. M.D. Ga. Nov. 5, 2018). (All attached.)

Commentary:

This matter is scheduled for a Show Cause Hearing  next week on September 30th,  as the Wrights do not seem to have paid the sanctions awards (totalling $37,154.30), so further updates may follow.

And  for the convenience of any members of the North Carolina bar that happen to read this,  since we all may now have an obligation to report the Wrights to the North Carolina State Bar for investigation and potential criminal prosecution for the unauthorized practice of law,  I've attached a copy of the NC State Bar Authorized Practice Complaint Form that you  can submit to thale@ncbar.gov with the Wright's addresses already included.  This is a Class 1 misdemeanor pursuant to N.C.G.S. § 84‑8 and give the continued actions by the Wrights,  both in North Carolina,  Georgia and, one might guess,  elsewhere,  perhaps prosecution is long past due.

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