Business of Law

Ex-client sues firm for allegedly accepting credit card payment for bankruptcy legal fees

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Updated: When Loyd Cadwell decided to file for bankruptcy, he allegedly paid legal fees to the Orlando, Florida-based KEL law firm in January using two credit cards.

But that’s not allowed under bankruptcy law. So when Cadwell later decided to switch to another law firm, Jacksonville-based Mickler & Mickler noticed the unusual payment and filed suit Tuesday against KEL on his behalf, reports the Orlando Sentinel.

The suit, which seeks class-action status, contends that KEL “uses standardized procedures when attempting to collect attorney’s fees by charging credit cards prior filing Chapter 7 bankruptcy.” It seeks disgorgement of all bankruptcy fees paid by credit card—the amount of which is cited at $1,700 in the suit—and $1 million in punitive damages.

However, “It is KEL’s policy never to take a credit card payment for bankruptcy retainers,” said managing partner Matthew Englett in a written statement provided to the newspaper. “Due to the active litigation we cannot comment further.”

Managing partner Matthew Englett announced earlier this month that KEL has rebranded as LawyerASAP, the Orlando Sentinel reported. Former partners Jeffrey Kaufman and Craig Lynd will be operating a new firm, Kaufman and Lynd, PLLC.

KEL was previously in the news when it tried to sue the Better Business Bureau in 2012 over an ‘F’ rating. That suit was dismissed in 2013. The firm’s founders were also reprimanded by the Florida Supreme Court in 2014 for failing to properly communicate with clients, the Orlando Sentinel reported at the time.

Updated on May 18 to clarify language about the rebranding of KEL and correct a reference to the 2014 reprimand.

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