Page 4 of 4

But in early May, Zeigler continued, he had "learned" that Hessinger bill collectors were again threatening clients' debtors. That's when he wrote his beat-them-to-the-punch letters to the bankruptcy judges.

Baum scheduled a May 24 hearing on Zeigler's revelations. If the collections continued, the judge told Joseph Hessinger at the hearing, "I can promise the full wrath that I have the power to deliver will be delivered."

After the hearing, Zeigler and Hessinger penned an in-house memo to the collectors. It warned that the judge seemed to mean business.

But in mid-June, according to Zeigler's affidavit, he was contacted by Mesa-based bill collector Kevin Miller, who has held about 90 percent of Hessinger's zero-down contracts in Arizona.

Miller said a Utah lawyer had given him the go-ahead to return to business as usual, no matter what the Bankruptcy Court had ordered.

Zeigler phoned Joe Hessinger in Pinetop. Hessinger told him he knew nothing about the Utah attorney's instructions and would look into it. A week passed, during which Zeigler got calls from zero-down clients complaining that bill collectors were pushing them for payments.

Skittish about "the full wrath" of Judge Baum, Zeigler and two other Hessinger attorneys wrote to Joe Hessinger on July 7. "Be advised," they said, "that we will not appear on behalf of the firm at any hearings, meetings or other proceedings relating to collection activities from bankruptcy clients. None of us wishes to place our careers and licenses in jeopardy."

On the morning of July 11, Zeigler concluded in his affidavit, he "discovered that my office computer was missing and that my office had been ransacked."

He had been fired. Sources inside Hessinger say the firm had decided to scale back its bankruptcy section, at least until things blew over.

It would be nice to cast Murray Zeigler as an attorney who finally saw the light and took steps to correct things before it was too late. But that's not entirely true.

On August 4, he filed notice with the Bankruptcy Court that he will be representing Hessinger in its appeal of a judge's fee-collection ruling against the firm.

Zeigler is working out of an office at his Tempe home. He did not respond to requests from New Times for an explanation of his changes of heart.

@body:Many judges, such as Redfield Baum, prefer arbitration and negotiation to contention and controversy. But there are other jurists who react in the strongest way they can.

One such is Alan Jaroslovsky, a San Francisco-based bankruptcy judge. On August 9, Jaroslovsky dealt Hessinger and Associates a greater blow to its practice in northern California than any it has suffered in Arizona.

In a scathing, 17-page ruling concerning the firm's zero-down practices, the judge disbarred Hessinger from practicing in the Northern District of California. He also fined the firm $100,000.

Jaroslovsky traced the firm's origin back to Arizona, where the "unconscionable" fees and hardball collecting began.

"The individuals receive no counseling," the judge wrote of the zero-down debtors, "and in fact are looked upon as customers to be bilked and milked rather than clients."
Jaroslovsky concluded that Hessinger's ethical violations "are rampant and outrageous," and demanded the strongest sanctions possible. "This conduct is reprehensible beyond words. To anyone who has any degree of love for the law, it is physically revolting.

KEEP PHOENIX NEW TIMES FREE... Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
Paul Rubin
Contact: Paul Rubin