Filing Bankruptcy to Deal with the Wolf in Sheep’s Clothing

Written by Greenwood Bankruptcy Lawyer, Dee Compton

Filing bankruptcy to deal with only one creditor might seem extreme, but title lenders are often a “wolf in sheep’s clothing.”  Sometimes you need to take extreme measures like filing bankruptcy to deal with the threat.

Several years ago I represented a single mother who made the mistake of taking out a car “title loan.”  She didn’t think about the terms–her family was in trouble and needed money fast.  She didn’t have any savings, but her car was paid for so she went to the one place she could get money quick–the nearest title lender.

My client needed $1,000, but only earned $1,200 per month.  No problem!  The title lender gladly loaned the money because her car was worth over $3,000.  She didn’t even need a credit check.  Wow!

Problem was that the loan was made at the rate of 300% per year and was due, in full, just 30 days from when she came to see me about it.  After she was allowed to pay on the loan for a year, she owed a lot more than she had borrowed.  The title lender didn’t care that she had paid back more than the car was worth.  After all, if she missed a payment, then the car would belong to the title company.

Fortunately, I filed a Chapter 13 for her and got her car back.  I also sued the title lender in Bankruptcy Court because the terms of the loan were so unfair.  We ended up with the car returned, the loan forgiven, her title back and her attorney’s fees paid.  Unfortunately, thousands of people are preyed upon by these wolves, who don’t know how to get help.  Filing bankruptcy is sometimes an option to be considered.

After asking the creditors lawyer why a company would make a loan at such a predatory interest rate, he told me: “if companies like [his client] didn’t exist, some people couldn’t get credit.”

A wolf in sheep’s clothing indeed.

John DeVore “Dee” Compton, III is an attorney practicing Consumer Bankruptcy Law in Greenwood South Carolina. A product of the Greenwood public school system, Dee graduated Greenwood High in 1981. He also graduated from Lander College with a B.S. in Political Science (1986) and Mercer University Law School (1989). In 1990 Dee founded the Compton Law Firm, PA, and practiced solo until his wife, Alecia, joined him in practice in 1994. As a solo practitioner, Dee handled all kinds of legal work, from arguing appeals before the South Carolina Supreme Court and Court of Appeals, to DUI defense, to preparing Wills, to closing Real Estate transactions, to litigating a variety of Civil Cases. Dee began filing Bankruptcy cases in 1993. In 1994, Dee and Alecia decided to make Bankruptcy the focus of their practices, and have devoted 90% of their efforts to Bankruptcy ever since. Dee also devotes much of his energies in practice to litigating Consumer issues in bankruptcy court. Notable among some of his cases in South Carolina, Dee successfully brought the first Extended Right of Rescission Tender through a Chapter 13 plan, and its accompanying rescission case under the Truth in Lending Act; removal of State Court Foreclosure actions to Bankruptcy Court to assert consumer claims; Litigation to declare Car Title Lending unconscionable; Litigation against Lawyers for aiding and abetting the Unauthorized Practice of Law; Litigation against creditors and law enforcement agents for stay violations; and Litigation attacking Creditor Claims for various Federal and State consumer violations, and a successful Student Loan discharge, among other cases. Because the financial deck is stacked against debtors, Dee believes that the effective practice of bankruptcy requires attorneys to do more than run a “forms” practice. A bankruptcy attorney should litigate matters whenever there is a reasonable probability of adding value the bankrupt’s estate, or when unscrupulous creditors violate bankruptcy or consumer laws, and cause damage to a debtor. In addition to practicing law, Dee is a member of the Greenwood Lions Club, and has a long record of community service having served on many boards and committees. Dee is a past chairman of the S.C. Bar Consumer Law Section, and has spoken at CLEs on Consumer and Bankruptcy issues. He is the author “Legal Briefs”: a series of articles on general legal topics, and has published Op-Eds on matters of interest in the Greenville News, The State, the Index Journal and other newspapers. Dee has also appeared many times on local talk radio to discuss matters of legal and political interest. Dee has engaged in public service having served on Greenwood City Council, and as Vice-Chairman of Greenwood County Council. Dee handles consumer and business bankruptcy cases under Chapter 7 and 13 of the Bankruptcy Code. He is admitted to practice in all courts in South Carolina and Georgia, The 4th and 11th Circuit Courts of Appeal, and the United States Supreme Court. Dee and Alecia are the parents of three daughters.

Leave a Reply