It’s understandable for New York bankruptcy lawyers to cast a wary eye at LegalZoom, the Internet-based legal services company. Most media portrayals treat it as the innovative new business that disrupts the lawyer-dinosaurs, allowing everyday Americans to obtain cheap legal services without the help of an expensive licensed professional, including drafting wills and even preparing bankruptcy papers.
The lawyers aren’t usually persuasive in their rebuttals. Attorneys in some states have argued that LegalZoom engages in UPL—unauthorized practice of law. They argue that under state law, simply checking to ensure that forms are prepared properly is work that can only be performed in a lawyer’s office, no matter how routine it appears. The response, naturally, is that the lawyers are just making excuses for charging high prices for work high-school graduates could do.
The good news for us lawyers, though, is that BuzzFeed, a publication not known for extensive investigatory reporting, ran an article detailing LegalZoom’s foray into student debt relief, specifically enrolling debtors in federal income-based repayment programs. These programs are free for debtors to enroll in, but LegalZoom is charging as much as $699 to help debtors enroll in these programs and complete the paperwork for them. The cost is similar to what shadier debt relief companies charge.
(At this point, I’ll add that my practice offers free initial consultations, which is common among bankruptcy lawyers.)
BuzzFeed didn’t stop there: Its reporter contacted LegalZoom, posing as a debtor, and went through the process. At no time was the reported told that the forms are free, contrary to LegalZoom’s assertion that his company’s representatives explicitly say otherwise. Perhaps this article will encourage it to improve its practices.
Unsurprisingly, the government and nonprofit watchdogs are not amused either. One official complained that no outside help should be necessary, and an attorney with the National Consumer Law Center described the high fees as “troubling.”
You can read the BuzzFeed article here.
Millions of Americans have enrolled in federal loan repayment programs without paying for help—and they’re growing. If you are interested, a good resource to start with is the Department of Education’s Web site. If you have private student loans or substantial non-student-loan debts as well, then talking to a bankruptcy lawyer, for free, can help you assess your options.
For answers to more questions about student loans, bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney in Brooklyn Bruce Weiner for a free initial consultation.
