Court Slaps Negligent Norfolk BPP with 7-Month Jail Term

by San Antonio Attorney

The U.S. Bankruptcy Court in Norfolk, Virginia handed down a 7-month jail term for local bankruptcy petition preparer (BPP) Sonya Skinner.  Skinner, owner of local debt relief agency A1 Credit Services, was found guilty of fraud, as well as repeated offences of violating bankruptcy regulations and criminal contempt.

According to records, the court first ordered Skinner to desist from arranging bankruptcy petitions in 2012, after it was revealed that she inappropriately provided clients with legal advice.  The 2012 court decision included an order for Skinner to settle fines amounting to $19,000, as well as refund clients who may have suffered negative consequences arising from Skinner’s legal advice.

In the US, BPPs do not require any specific training or experience, but are regulated by S110 of the Bankruptcy Code and are supervised by the United States Trustee.  The law states that bankruptcy petition preparers are prohibited from ever giving legal advice (including providing legal references for claiming exemptions) and must only assist clients with typing and organizing all necessary forms.  Bankruptcy petition preparers are also barred from assisting clients with a Chapter 13 repayment plan required for a Chapter 13 bankruptcy.

Instead of settling outstanding financial obligations, Skinner continued business as usual and even used the court notice to entice even more prospective clients.  Court records show that Skinner claimed to have been barred by the court because she was too brilliant and had “too many tricks” up her sleeve—thereby twisting the court’s unfavorable decision as a sales pitch to lure unsuspecting clients.  After failing to settle the abovementioned fees for a year, the court decided to permanently ban Skinner from assisting clients in preparing bankruptcy petitions.

Despite the ban, Skinner continued to operate as a BPP in clear contravention of the court’s orders.  As a result, bankruptcy courts found Skinner in civil contempt in 2014 for deliberate violation of two previous orders.  She was also ordered to pay yet another fine, which she disregarded again.

Last March, Skinner finally pled guilty to deliberate violation of bankruptcy laws, as well as criminal contempt.  However, court records reveal that despite her guilty plea, Skinner continued to assist a woman with filing a bankruptcy petition, and even met with the client a couple of times after her arraignment.  Because of her repeated refusal to abide by the court’s orders, Skinner’s bond was rescinded last May.

After her bond was rescinded, Skinner pled guilty to a felony, in the hopes of securing an amended plea agreement.  The case culminated in a 7-month jail term for Skinner, shorter than the 9 months requested by the prosecution but longer than the 5 months asked for by her defense attorneys.

Skinner’s lawyer Nicholas Renninger, attempted to defend his client by describing his her as a kind, soft-hearted person whose good intentions overshadowed her compliance to existing rules and regulations.  According to Renninger, Skinner was “a good person who merely wanted to help poor people access legal services—especially those unable to pay for expensive lawyers or bankruptcy petition preparers.”

However, Joseph Kosky, an Assistant U.S. attorney familiar with Skinner’s case, vehemently disagrees with Renninger’s assessment.

In Kosky’s view, Skinner was a cunning woman who deliberately and blatantly disregarded the law and should be penalized for it.

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