Going for Broke

Dick Berry claims his bankruptcy services are cheaper than an attorney's, and just as effective. While court officials and many customers agree it's a scam conceived by white-collar felons, those who would shut him down are discovering they don't know Dic

In spite of their recent eviction from Bankruptcy Court, Dick Berry and People's Paralegal are maintaining their powerful market share through the new arrangement with Fred Taylor.

"The bottom line," Berry told a judge last April, "is that we have found out how to market this and, most importantly, in all candor, the antilawyer sentiment out there is so deep it is unbelievable. There are people, literally . . . who would come in there and pay us more than they'd pay a lawyer, just have a nonlawyer do it."

It will take more than a mere court order to shut down Dick Berry and People's Paralegal.

People's Paralegal's ascendancy is testament to three things--the firm advertises relentlessly; people buy the promise of cheap, quality service; and many people hate lawyers.

Since starting its advertising blitz in early 1996, People's Paralegal has become a million-dollar mill, having lured more than 2,000 customers.

By August 1996, it had assumed the lead position in the local bankruptcy market. In the first five months of 1997, the firm attracted almost 900 debtors, accounting for about one in nine of all filings.

Hundreds of people, however, have paid dearly for hiring People's Paralegal.
New Times interviewed debtors who unnecessarily have lost homes and cars or found their bankruptcy cases in tatters after taking the firm's illegal and often misguided advice.

Undaunted, Berry says People's Paralegal has provided uniformly excellent service to thousands of satisfied customers.

". . . There is no harm to the debtor, and there's never even been an allegation from day one as to that," he told a judge at a June 17 hearing.

During a March hearing, People's Paralegal co-owner and director of operations Paul Dvorscak testified: "There's never been a general complaint by a given customer."

That would come as a shock to numerous People's Paralegal customers, including Kelly and George Soto, a young Phoenix couple who wrote to People's Paralegal on June 2:

"This letter is to inform you of our request for a refund of $464. . . . Your representative, whom we met with on May 21, 1997, did not give us sufficient cause for the amount of $995 to be charged versus the $200 as per said court order. . . . Furthermore, on May 9, 1997, a response to an objection to our [Chapter 13] Plan from [a secured creditor] was drawn up and was to be mailed [by People's Paralegal] . . . Recently, we have learned that this was not done. This only compounds our dissatisfaction with your company."

As of last week, the Sotos still hadn't gotten a refund.
New Times examined more than 600 bankruptcy files involving People's Paralegal customers, and spoke with 36 people whose petitions were prepared by the firm.

Some endorse People's Paralegal, including Martin Wolf, whose bankruptcy, ironically, became the test case that led the court to impose the $200 limit.

But many contain disturbing examples other than those already noted:
* Eva and William Rankin, an elderly Phoenix couple, paid $995 to People's Paralegal in a bankruptcy case that became far more costly than necessary because of the firm's poor advice. "This is indicative of the type of advantage that People's Services takes of debtors," a representative for the couple's sole secured creditor--a car-loan firm--recently wrote to a court official. "It most certainly appears that these people were preyed upon."

* Lorey Clark, a disabled Phoenix woman, says she took the advice of People's Paralegal and stopped making payments on rented furniture, a bed and a dinette set after declaring bankruptcy. She ended up losing all of the items, and her Chapter 13 reorganization plan wound up being dismissed.

* Henry Vaughn, a Phoenix man who said under oath last April that People's Paralegal threatened to ruin his bankruptcy case if he didn't pay the rest of his bill--which he did.

Few of those burned by People's Paralegal have fought back with the gusto of Francine and Nelson Bregio. After the Mesa couple clashed last month with attorney Fred Taylor, they drove to People's Paralegal.

"I made a beeline for Dick Berry's office," Francine Bregio says. "'Yo, DB, we got to talk.' I told him, 'You guys screwed up our paperwork and almost cost us our house. Now, you're laying this lawyer on us we don't want.' He kept telling me he had to have someone's name on it. I told him I just wanted my file."

It turns out People's Paralegal had erred in collating the Bregios' bankruptcy petition. Francine Bregio says she handed copies of the court's injunction against the firm to People's Paralegal customers in a waiting room.

"It was my little public service," she says. "We got ripped off like fools."
But the Bregios' problems were far from over.
These people pay big money for Dick Berry to fill out some forms, then they wind up at their 341 hearing thinking they'll be protected by their paralegal. It's seductive. But then it's, "Where's this schedule or that form?" I've had to ask debtor after debtor. "I don't know, People's Paralegal did it." So now Dick has found an attorney to front for him. Isn't that false advertising from someone whose sign screams to the world, Why Pay a Lawyer?

--Chapter 13 trustee Russell Brown

In 1997, People's Paralegal has billed about $420 per case in Chapter 7 filings, or, on average, a few hundred dollars less than most attorneys charge. It has charged much less in Chapter 13 cases--about $800 per filing compared with about $2,000 by an attorney.

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