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Allegro Law Receivership Frozen by Bankruptcy Court. All Client Accounts are Closed.

I just got off the phone with the former Official Receiver of Allegro Law, Louis Colley. He broke some very unfortunate news to me regarding Allegro Law and how this impacts ALL Allegro Law clients.

Allegro Law clients were broken up into two camps. One was the debt settlement camp and one was the debt management camp. Debt settlement clients were still having their accounts drafted and creditor paid each month while the receivership was proceeding with an orderly shutdown of Allegro Law. As of Friday, April 2, 2010 that stopped cold turkey.

What appears to have happened is that Andy Nelms filed personal bankruptcy and listed Allegro as a personal asset. Because of that the bankruptcy court had no choice other than to take over full control of his assets including Allegro and close it down.

This is really bad news for all past and current Allegro clients and appears to clearly be the result of actions of Andy Nelms, the attorney that owned Allegro Law.

What this means is that debt settlement consumers that would have received funds back from the seized company will now receive less back as business claims from marketers of Allegro Law will be added back into the pot that will divide available funds.

Effective immediately AmeriCorp is going to stop servicing clients according to Mr. Colley so this will leave all remaining clients with a tie to Allegro Law left out in the frigid cold with no light, no rope, and no hope.

If you were an Allegro Law debt management client I suggest that you immediately contact this credit counseling group that has experience in an orderly transition from Allegro Law to their debt management program. If you don’t get your account moved immediately it can result in the creditor dropping you from the debt management program and all the money you’ve paid up to date will be most likely wasted since you will wind back up in collections and many will decide to go ahead with bankruptcy instead.

If you are a debt settlement client and have been waiting for a refund of your money held by the court, it is very unclear what percentage of money you will get back, or when.

I’m so sorry to report this news. This mess occurred as result of legal rules rather than the wishes of the receiver and Attorney General of Alabama.

Allegro Law Receivership Frozen by Bankruptcy Court. All Client Accounts are Closed.
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Tomorrow

    i think its mind bending how us struggling people go to “professionals” for help & they screw it up funny how they look down on us but take our hard earned money from us .anyway i went to my creditors told them what happened they worked out a plan for me over next few years & it was better than allegrolaw offfered go to the creditors not these fly by night theives

    • Bent

       I agree with you.
      It is equally bending that consumers fall for the crap in the first place.
      A sales pitch should never take the place of personal research and due diligence into your options, or the company you think to hire.

    • Damaris

       Hello. have you people hear anything about this case?

  • Steve Rhode

    Allegro has gone bankrupt. The only money you will get is is what the court can recover and distribute. It will be less that you are owed. You will need to negotiate a solution to that debt directly with the creditor. There is no date by which the bankruptcy trustee might distribute any funds.

  • Bob Schwietert

    I was a client of Allegro settlement. I paid my settlement payments, and received a letter that my debt was settled, that was months ago. I have found out recently found out that the credit card company was not paid, by the time I found out about another $888. had been added. I have paid the debt. I received a proof of claim form that has to be filed by 11/29. I don’t know what to do.

    Bob

  • Bob Schwietert

    I was a client of Allegro settlement. I paid my settlement payments, and received a letter that my debt was settled, that was months ago. I have found out recently found out that the credit card company was not paid, by the time I found out about another $888. had been added. I have paid the debt. I received a proof of claim form that has to be filed by 11/29. I don’t know what to do.

    Bob

    • http://GetOutOfDebt.org Steve Rhode

      Allegro has gone bankrupt. The only money you will get is is what the court can recover and distribute. It will be less that you are owed. You will need to negotiate a solution to that debt directly with the creditor. There is no date by which the bankruptcy trustee might distribute any funds.

  • Joel

    So, I received the proof of claim in the mail, but it’s really confusing as to what I need to fill out and what I need to check. Does anyone have any suggestions. I was a debt management client, and they took out the March $$, but never distributed to the creditors.

    I guess my biggest question relates to Priority Claim. It’s confusing whether I qualify under any of those options. I guess I might fall under wages, but if someone could clarify what that means, that would be great.

    Thanks

  • Joel

    So, I received the proof of claim in the mail, but it’s really confusing as to what I need to fill out and what I need to check. Does anyone have any suggestions. I was a debt management client, and they took out the March $$, but never distributed to the creditors.

    I guess my biggest question relates to Priority Claim. It’s confusing whether I qualify under any of those options. I guess I might fall under wages, but if someone could clarify what that means, that would be great.

    Thanks

  • http://dontpaycreditcards.com Gary Anderson

    Wow, I have been advocating debt revolt, a walking away from credit cards. These poor people probably should have done just that.

  • Deserie Martin

    I have been paying into this for over a year and now how do I get my money so I can payoff these creditors I can not believe companies can get away with this,you try do do the right thing and now things like this happen. There has to be something the company can do with your own money

  • Michelle

    I have already made arrangements with all but 1 of the companies Allegro was paying in my behalf. HOWEVER, the one company says they have not received a payment since April of last year. Yet when I go on the FCDC website I have check numbers and amounts paid up to March 2010. So somewhere sits $450, which is approximately half of what I owe this company. I’ve been told that the money is sitting in a FCDC account until they have the full payoff amount. FCDC will NOT answer my calls at all.The company I owe money advised me to stop paying anything to anybody until the bankruptcy is cleared up. The only problem with that is it will remain a stain on my credit which I have been working very hard to repair. Please tell me what I need to do about the one bill that I’ve already paid half of but the company has not received funds for.

  • shaun

    steve,
    i enrolled in an 18 month program in june 2008 that was supposed to have all my creditors payed off by no later than june of this year allegro has made no attempt over the last year to settle any of my debt they have just been takin my money and now allego files bankruptcy what a scam do you know if we as clients are gonna be entitled to any of the fees ive paid close to 2000 in fees plus 2700 for settlements how is it legal for someone to file personal bankruptcy with other peoples money thats stealing allegro is supposed to be providing a service to help people not screw them even more i think we should be entitled to a full refund

    • http://GetOutOfDebt.org Steve Rhode

      If you get any money back you will have to file a claim with the bankruptcy court and hope there is some money left to divide up among the creditors, of which you are now one of.

      Steve

    • Georgia

      Shaun, you can contact the bankruptcy court that is handling this case at 334 954-3800. Every Allegro client in the world should call them. I’ve spoken to them once about filing a claim, they sent me to http://www.allegrobankruptcy.com. There were no forms there, so I’m calling them again. Call them.

      • Michelle

        Thank you for the number Georgia. I called them this morning. I was told that the online forms probably would not be forthcoming but I should see them in the mail within 2-3 weeks.

      • Georgia

        Michelle, that’s great. I’m going to call them again today too. I want to make sure that I’m on the list to get the forms. I don’t trust the government either. They don’t care. I never received anything from the receiver Colley, so how do I know that I’m on the list. We need to make sure that they have us on the list to get forms. I’ll let you know what I find out.

  • Andrew Marquez

    Steve,

    When I first heard about the receivership I knew right away that things were going down the drain for Allegro. They were more than willing to keep receiving monies, but could not send anything out until approved (nobody knew how long it would take). I cancelled my account with them and requested all of my money back as they had not done anything for me. I paid my accounts on my own and still have over $50,000 to account for. With the bankruptcy of Allegro going into effect will I still receive paperwork from the courts, or will I need to do the legwork on my own? After all, even as a client I was not even notified that they went into receivership.
    Thank you

    • http://GetOutOfDebt.org Steve Rhode

      Andrew,

      If I read your comment correctly you did still have money on deposit with them when they failed. In that case you should make a claim with the court. You can either wait for the bankruptcy court to send you the forms to fill out or you can watch http://www.allegrobankruptcy.com/ and see when they will post the claim forms online to complete.

      Steve

      All assets belonging to Allegro Law, LLC are now within the jurisdiction of the United States Bankruptcy Court for the Middle District of Alabama. The State Court Receivership that operated Allegro Law, LLC from July 2009 until recently is now superseded and will no longer have responsibility for Allegro Law, LLC. All activity previously conducted by Allegro Law, LLC and any activity that continued through the Receivership has now ceased.

      Instructions to cease withdrawals from all Allegro Law, LLC customer accounts were recently provided to the company responsible for this activity. All assets held by and claims against Allegro Law, LLC are to be administered pursuant to the United States Bankruptcy Code and distributed according to Title 11, U. S. Code. Notification to all potential claimants of Allegro Law, LLC will be provided by mail and they will be entitled to file a claim in this case.

    • Georgia

      Andrew, you can contact the bankruptcy court that is handling this case at 334 954-3800. Every Allegro client in the world should call them. I’ve spoken to them once about filing a claim, they sent me to http://www.allegrobankruptcy.com. There were no forms there, so I’m calling them again. Call them.

  • D

    Hello. Is the Bankruptcy Court going to initiate contact with me or is there a way to follow up that they are contacting people. How do they know for sure that they owe me money. I’m out a $1000 and want to recover as much as I can.. Thank You.

    • http://GetOutOfDebt.org Steve Rhode

      The form from the court will be coming, probably in a few weeks.

      Steve

      • Georgia

        Hi Steve, I called the court 334 954-3800. They said that claim forms could be found on the newly set up website. I went to the site http://www.allegrobankruptcy.com and did not see any forms. I will be calling the court again to find out about the forms to file a claim. The number for the court responsible for this bankruptcy case is 334 954-3800. All Allegro clients should call them. I am not waiting on anyone to mail me a form that I will probably never get. I never received anything from the receiver Louis Colley, so I don’t feel too confident that I will get anything from the bankruptcy court. It’s the government. Nelms should not be allowed to file bankruptcy. What he has done is nothing less than theft and should be treated that way. He should be in Jail. Plus we have no idea how screwed up their records must be.

      • http://GetOutOfDebt.org Steve Rhode

        Georgia,

        Thank you for doing the footwork on this. Let me know what you discover. Once you can find the forms I’ll let others know.

        Steve

  • http://Website Alan

    I was enrolled in Allegro Law’s credit counseling program and their receivership withdrew the money from my bank account. On thursday I received a call from Chase requesting payment since they haven’t received it. Chase wanted the payment and threatened to return my accounts back to their original terms & conditions. I checked my other accounts and they have not received their monthly payments ether. Is there a way to get my money back from the last payment? Should I call my other creditors and tell them the situation?
    Thanks

  • http://Website Agata

    I was Allegro’s client and they suppose to negotiate my debt with my credit card and now the file for bankrupcy and my money is gone and no debt settlement.
    How can I get the money back? Also in this case should I call my credit card and ask them for the payment plan so I could payoff my debt? Please advise

    • http://GetOutOfDebt.org Steve Rhode

      Agata,

      You will have to wait to be contacted by the bankruptcy court and then put in a claim to get SOME of your money back.

      Call your creditors and see if they will accept payments directly from you. Not all do. Otherwise contact a credit counseling company and get your accounts transferred over ASAP.

      Steve

      • http://Website Agata

        Steve,

        Thank you for you response. I have contacted the Attorney of my credit card and they will not speak with me until I send them a letter saying that Allegro Law doesn’t represent me any longer.
        Do you know any counseling companies that I could try?
        Thank you Agata

      • http://GetOutOfDebt.org Steve Rhode

        Agata,

        My suggestion is to try this credit counseling group. They have experience already with the Allegro mess.

        Steve

      • http://getoutofdebt.org Lauro

        I was a client with ALLEGRO law firm. My wife and I live in New Jersey and made around $9500 in payments to these crooks with hope there was light at the end of the tunnel. I keep waiting for the paperwork in the mail to put in my claim. Would it help me to hire a bankruptcy lawyer to put in my claim and secondly, would I have to hire a lawyer in NJ or Alabama?? Would it be a better idea to just switch debt settlement companies?? HELP!

      • http://GetOutOfDebt.org Steve Rhode

        Lauro,

        You don’t need to hire an attorney to complete the court form. It seems at this point that bankruptcy for you is something to explore. It would seem that down $9,500 and starting over again would be a hard hole to climb out of with debt settlement again.

        Steve

  • Wayne

    I was part of the mess at Allegro but just found out yesterday because my creditors started calling me. I am over 25k in credit card debt. Would you just file bankruptcy and move on or do you have any other suggestions? Also, have you heard of any way that I might make sure that someone has my information if any of his 12m in assets are split or if any money comes our way? Also, might you have seen or heard Nelms address so that I might go to Alabama and beat some of my money out of him?

  • http://Website Eric

    I’ve had two accounts dropped by GE Money already, I guess somehow last month they didn’t get paid because no one else called. I suppose that doesn’t matter now though, being that I’m effectively dropped from everyone now…Good thing I saw the link to this post, because most likely I definitely wouldn’t have found out from the other parties until at least 2 weeks from now. Thanks Steve

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