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Keith Nelms, Owner of Allegro Law Debt Settlement Fame, Goes Bankrupt With $28 in His Pocket

I just took a look at the bankruptcy filing for Keith Nelms, the attorney owner of the Debt Settlement company, Allegro Law.

Some of the creditors he listed in his filing included: Jennifer Nelms, Calude Nelms, Jr., State of Alabama Consumer Affairs Division, Internal Revenue Service, Alabama Department of Revenue, some student loans, Chase Bank, Household Finance, and the approximately 17,000 clients that were screwed by Allegro Law.

Keith Nelms, Owner of Allegro Law Debt Settlement Fame, Goes Bankrupt With $28 in His Pocket
Picture of home address Nelms listed.

According to the filing Nelms had $9,669,043 in assets and $9,781,877 in liabilities at the time of his filing. He stated under oath that he only had $28 cash on hand, $5,000 in home furnishings, $2,000 in clothing and owned an interest in Allegro Financial Services, Allegro Law, Anderson Nelms & Associates, and Corbett Enterprises.

Our high flying debt settlement company lawyer said he owned a 2000 Jeep Cherokee (not running), 1994 Ford Bronco, 1996 Ford Bronco and a 2007 Chevrolet Suburban which he owned with his father. Oh yes, an 18′ Key Largo boat.

Of the claims against him he owed Ronald Francis for a judgment against Nelms, he owed Alabama taxes for 2006 – 2009, IRS for taxes 2006 – 2009, had a defaulted student loan, owed Chase Bank for consumer protection law violations, had a breach of a lease and a wage garnishment against him.

Sadly he listed that he has a son, 5, and a daughter, 8. His occupation was ‘unemployed.’

Keith’s bankruptcy filing is a classic example of a debt relief company gone bad. While his company, Allegro Law, was being held out as a “place to go for debt settlement help” Nelms was in fact in debt on taxes, judgments, wage garnishments and lawsuits.

I feel most sorry for his kids, who will one day have to be told how badly, in my opinion, Nelms wound up screwing the 17,000 clients of Allegro law. Many of those people will subsequently have to file bankruptcy and many will lose homes and property as well. Nelms’ salvation here will be if he can come clean about his activities and work to help, instead of hurt, consumers in the future.

If you want to read the bankruptcy filing, here it is.

Keith Nelms, Owner of Allegro Law Debt Settlement Fame, Goes Bankrupt With $28 in His Pocket
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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.
  • KENNETH A. REDLICK

    STEVE;FYI.   IRS  RECENTLY DID MY EFILE AFTER RECEIVING 1099C CHARGE OFF FROM CHASE BANK.I WAS CHARGED 10% TAX PENALTY FOR ADDITIONAL INCOME AND CREDIT REPORT WILL SHOW DEBT CHARGE OFF FOR 7YEARS. ONCE I GET REFUND FROM ALLLC BANKRUPTCY,I CAN PUT DIFFERANCE OF REFUND AND AMOUNT PAID ON SCHEDULE D- PROFFIT AND LOSS IRS FORM AS DEDUCTION.   THANK,KENNETH    

    • http://GetOutOfDebt.org Steve Rhode

      Look at IRS form 982 for waiver of tax if you are insolvent. I just wrote a post about in in more detail. Do a search of this site for 1099 982 and see if you can find it.

      • KENNETH A. REDLICK

        STEVE,   I WAS ASKED THAT BY IRS REP. IM LIVING ON SMALL PENSION,AND TAKING MONTLY WITHDRAWLS FROM I.R.A TILL FEB.2014 WHEN I CAN START COLLECTING  SOCIAL SECURITY AT A GE 62. THANKS,KENNETH        P.S. NO OTHER DEBT.                                                

  • Charlotte Reynolds

    It is 2011 and I was in Nelm’s care also.  Have been trying to get out of debt for almost five years, and thanks to him I will be in debt another five years, and working two jobs just to make ends meet thanks to him.

  • Clueless

    I am so clueless on how to file the Proof of Claim form!!!

  • Clueless

    I am so clueless on how to file the Proof of Claim form!!!

  • KENNETH A. REDLICK

    STEVE,THIS IS FROM MY ORIGINAL CLAIM AND ATACHMENTS I SENT ON 11/10/2010 TO BMC GROUP.SORRY FOR THE CONFUSION. I WAS LETTING ALLLC CLIENTS TO BE AWARE OF POSTAGE SITUATION, SINCE IT STATES TO INCLUDE SELF-ADRESSED STAMPED ENVELOPE.I WAS THINKING IT WAS FOR SENDING ME A CONFORMATION OF RECEIVING MY CLAIM NOT FOR RETURNING THE COPY WITH ATACHMENTS.I HOPE THIS ANSWERS YOUR QUESTIONS. THANKS, KEN 11/10/2010

  • Steve Rhode

    Is this a new suit? Do you have details?

    Steve

  • KENNETH A.REDLICK

    STEVE,SEE MY POSTING ONDEBT SETTLEMENT ATTY. KEITH HELMS GETS SUED IN ALABAMA. POSTED 11/09/2010,THANKS,KEN

  • KENNETH A.REDLICK

    STEVE,SEE MY POSTING ONDEBT SETTLEMENT ATTY. KEITH HELMS GETS SUED IN ALABAMA. POSTED 11/09/2010,THANKS,KEN

    • http://GetOutOfDebt.org Steve Rhode

      Is this a new suit? Do you have details?

      Steve

      • KENNETH A. REDLICK

        STEVE,THIS IS FROM MY ORIGINAL CLAIM AND ATACHMENTS I SENT ON 11/10/2010 TO BMC GROUP.SORRY FOR THE CONFUSION. I WAS LETTING ALLLC CLIENTS TO BE AWARE OF POSTAGE SITUATION, SINCE IT STATES TO INCLUDE SELF-ADRESSED STAMPED ENVELOPE.I WAS THINKING IT WAS FOR SENDING ME A CONFORMATION OF RECEIVING MY CLAIM NOT FOR RETURNING THE COPY WITH ATACHMENTS.I HOPE THIS ANSWERS YOUR QUESTIONS. THANKS, KEN 11/10/2010

  • Steve Rhode

    Ken,

    I’m sure it will be fine.

    Thanks for the update.

    Steve

  • KENNETH A.REDLICK

    STEVE, I SENT OFF CLAIM FORM AND ATACHMENTS TODAY WAS TOLD SEVERAL TIMES VIA E-MAIL FROM ALLEGRO THAT WHEN I HAD QUESTIONS OR CONCERNS TO FILL OUT THE BEST OF MY ABILITY.THANKS,KEN

  • KENNETH A.REDLICK

    STEVE, I SENT OFF CLAIM FORM AND ATACHMENTS TODAY WAS TOLD SEVERAL TIMES VIA E-MAIL FROM ALLEGRO THAT WHEN I HAD QUESTIONS OR CONCERNS TO FILL OUT THE BEST OF MY ABILITY.THANKS,KEN

    • http://GetOutOfDebt.org Steve Rhode

      Ken,

      I’m sure it will be fine.

      Thanks for the update.

      Steve

  • KENNETH A. REDLICK

    STEVE! I DID NOT HERE BACK FROM AZAR&AZAR,LLC. SO I CALLED THEM TODAY.THEY WANT A 25% CONTINGENCY FEE OF AMOUNT RECOVERED. WAITING ON CALL BACK FROM LOCAL ATTORNEY. LOOKS LIKE 175.00 PRICE QUOTED TO PREVIOUS GUEST IS SOMETHING TO CONSIDER. THANKS,KEN 10/01/2010

  • Steve Rhode

    I looked over the form and the instructions on page two seem very helpful for completing the form. Unfortunately I can’t provide you with additional legal advice regarding the completion of the legal form in this case.

  • KENNETH A. REDLICK

    STEVE,IT IS POSTED ON ALLEGROBANKRUPTCY.COM CLICK ON FORMS. THANKS,KEN

  • Steve Rhode

    No, I did not get it.

  • KENNETH A. REDLICK

    STEVE,RECEJVED SOLICATATION FOR REPRESENTATION FOR ALLEGRO LAW LLC.-MATTER. I CALLED 800NUMBER, WASTOLD SOMEONE WOULDCALL ME IN NEXT FEW DAYS TO DISCUSS.DID YOU RECEIVE A COPY OF CLAIM FORM FOR REVEIW OR SUGESTIONS? THANKS,KEN

  • http://GetOutOfDebt.org Steve Rhode

    Update

    Over the past few days, the Notice of Chapter 7 Bankruptcy Case was mailed to all former Allegro Law, LLC, customer/clients. This is a required notice to those who had business dealings with Allegro Law, LLC. For those receiving this notice, there is no action necessary at this time. As stated in earlier updates (May 2, 2010 and May 11, 2010), the Proof of Claim forms, the forms necessary to file your claim against Allegro Law, LLC, will be provided in the same manner as the mailing just received.

    It is yet undecided whether the Court will employ a “modified” Proof of Claim process for this case, therefore making the Standard Bankruptcy Form Proof of Claim less than fully effective. At the time any Proof of Claim form receives Court approval for this case, all former Allegro Law, LLC, customer/clients will be provided with this approved claim form, instructions and other necessary documents.

    As stated above, neither the Clerk’s office nor the Trustee’s office can provide advice related to this case. Additional information will be provided in subsequent mailings. Should you need immediate information, please consult counsel of your choice.

    • KENNETH REDLICK

      STEVE.HAS ANYBODY HEARD ANYTHING ABOUT 5/25/2010 ALLLC B/K COURT HEARING? KEN

      • http://GetOutOfDebt.org Steve Rhode

        Ken,

        I have not.

        Steve

    • KENNETH A. REDLICK

      STEVE,RECEJVED SOLICATATION FOR REPRESENTATION FOR ALLEGRO LAW LLC.-MATTER. I CALLED 800NUMBER, WASTOLD SOMEONE WOULDCALL ME IN NEXT FEW DAYS TO DISCUSS.DID YOU RECEIVE A COPY OF CLAIM FORM FOR REVEIW OR SUGESTIONS? THANKS,KEN

      • http://GetOutOfDebt.org Steve Rhode

        No, I did not get it.

      • KENNETH A. REDLICK

        STEVE,IT IS POSTED ON ALLEGROBANKRUPTCY.COM CLICK ON FORMS. THANKS,KEN

      • http://GetOutOfDebt.org Steve Rhode

        I looked over the form and the instructions on page two seem very helpful for completing the form. Unfortunately I can’t provide you with additional legal advice regarding the completion of the legal form in this case.

      • KENNETH A. REDLICK

        STEVE! I DID NOT HERE BACK FROM AZAR&AZAR,LLC. SO I CALLED THEM TODAY.THEY WANT A 25% CONTINGENCY FEE OF AMOUNT RECOVERED. WAITING ON CALL BACK FROM LOCAL ATTORNEY. LOOKS LIKE 175.00 PRICE QUOTED TO PREVIOUS GUEST IS SOMETHING TO CONSIDER. THANKS,KEN 10/01/2010

  • Christina

    I was a client of allegro law also. I graduated from college four years ago thinking that I would get a job and be able to pay off my debt right away but unfortunatly nobody is hiring teachers where I live. I saw a bankruptcy lawyer today. It is awful how one can try to do the right thing and then get screwed and now I feel guilty for filing bankruptcy but even making the payments to allegro was difficult as a substitute teacher. I paid $8000 to allegro and i’m not sure if i’ll ever see any of that. As far as I knew, my money was going into an escrow account and they were going to pay my creditors after 36 months of collecting my money. I never received any statement from anyone stating what was going on with my money. Please keep me updated if anyone figures out how to get their money back. I could desperately use it back!

  • http://GetOutOfDebt.org Steve Rhode

    Bankruptcy Update:

    May 11, 2010

    Having now received the listing of Allegro Law, LLC customer/clients from the third party processor, the Notice of Chapter 7 Bankruptcy Case should be mailed to all former customer/clients within days. This mailing will include basic information about the Allegro Law, LLC bankruptcy. Within weeks after this mailing a Proof of Claim form along with other necessary information will be provided to all former customer/clients.

    • Damaris Maldonado

      i did not get my claim…

      • http://GetOutOfDebt.org Steve Rhode

        They have not been mailed yet.

    • Damaris Maldonado

      HOW MUCH MONEY CAN WE GET BACK.THEY JUST HAD ME WITH AN EMPTY ACCOUNT..PAYMENTS WERE NOT MADE ON TIME,NOT EVEN MADE..WHERE IS THAT MONEY NOW?.IF I FILE A BANKRUPTY?WILL AFFECT MY HOUSE AND OTHER BILLS?

    • Mark

      Do you think it is possible to get the initial and monthly fees back as well as any other moneys not dispursed? Since, according to my contract, the program cannot be stopped unless I did not meet the requirements of the contract. It says nothing about Allegro caneling the program for any other reason.

    • KENNETH REDLICK

      STEVE,RECEIVED ABOVE MAILING TODAY ALONG WITH FORM TO RECEIVE E-MAILS FOR UPDATES AND FUTURE FORMS. ALSO CONSULTED WITH BANKRUPTCY LAWYER WAS TOLD TO SEE HOW THIS PLAYS OUT BECAUSE FEE IS 1600.00 THANKS,KEN

  • KENNETH REDLICK

    JUST GOT DONE LISTENING TO APRIL16/2010 BANKRUPTCY COURT HEARING FOR CREDITERS VERY INTERESTING. KEN

  • Light Bulb

    Georgia,

    That is more than just a suggestion for those referred to Allegro by the Credit Exchange.

    There were many marketing partners of size for the Allegro credit counseling and settlement programs.

    Many reading this thread were referred by them. The actions you took can be taken by all.

    The bulb

    • http://GetOutOfDebt.org Steve Rhode

      And the kicker is that I would bet The Credit Exchange is going to make a massive claim of money owed by Allegro to the bankruptcy court and while the entire claim will not be paid, what they do receive will be paid out of the funds that consumers gave Allegro and they kept.

      Steve

  • Georgia

    Hello All, yesterday I filed complaints against The Credit Exchange at The California Attorney General’s website, The Federal Trade Commission and at the State of Georgia Office of Consumer Affairs. Every person that was signed up for Allegro through The Nasty Credit Exchange should file complaints against this company. They are as guilty as Allegro. The Credit Exchange needs to be shut down! I challenge everyone to file a complaint against The Credit Exchange who knowingly got us involved with Allegro. One of the main issues against Allegro is the fact that Nelms was never licensed to provide credit counseling services at all. How could The Credit Exchange not know this and refer people to an illegal service? The Credit Exchange needs to go down. Also you need to contact your bank if Allegro has withdrawn any money in the last 60 days since they filed bankruptcy and get that money reversed back into your account. My bank did it. Make sure to put a stop payment on that automatic draft for future safety. They took money out for payments in March and still have not paid the creditors, now I can pay them with the money that my bank returned to my account. We have got to fight this thing to the end. Down with The Credit Exchange. I blame them even more than Allegro. They both are scum.

    • Susie

      Hi Georgia,

      How did you get your bank to reverse the money back to your account? Allegro took money out of my account on 2/22 (the same day Nelms signed bankrupcy papers)and they did pay 2 out of 3 credit card companys and then they took out another payment on 3/22 and then just a week ago is when I found out about this whole mess. Do I have to take anything to the bank or exactly what did you do? I would appriciate any help so that I can try to recover any money so that I can pay my 3 creditors. Thanks again

      • Georgia

        Hello Susie, I just called them and told them that the company had filed bankruptcy on Feb 22 and were not supposed to take anymore payments from my account. That at the time of bankruptcy they were shut down and I wanted to reverse the payment that they had taken in error after they closed. They glady did it as long as it was within 60 days. You still have time to give it a try. Also when you talk to your bank you need to make sure that you put a stop payment on that automatic payment. I wouldn’t be surprised if they don’t keep debiting peoples accounts. They took my March payment and didn’t make one payment to any accounts. They shouldn’t have taken those March payments at all.

      • Susan

        Georgia, thanks so very much for the reply and information. I did do a stop payment with my bank already before they took out Aprils money and I just emailed my bank to see if they could reverse my monies back into my account. I am too late to get back my money that they did not disburse in February, but if I can get March’s money I would be happy. I placed an email about all this to my attorney general, the consumer complaints department and even the president and vice president of the United States, just wanted to see if I would get a response from any of them. Hopefully I will get something from Joe Biden since my attorney general is his son Beau. I will keep you posted.

  • mATT

    I WAS in the debt management program at Allegro. I found out today (4/21) about what was happening only because I noticed that my auto payment of 4/15 was never drawn.

    Fortunately, my two creditors agreed to honor the terms of the program, allowing me to pay directly (and no more $59 fee to Allegro).

    With that being said, I am FURIOUS that customers were not notified of what was about to happen. Instead, they just stopped paying! Do I have any legal recourse?

    Also, shoudl I be worried that they still have access to take money out of my account? What do I do?

    • http://GetOutOfDebt.org Steve Rhode

      Matt,

      The company Vanco, that was debiting accounts was instructed to immediately stop. I doubt they would start it up again.

      I agree, the Allegro situation has been a mess since the official receiver was appointed by the State of Alabama. I understand you are upset but this is all the result of the action of Andy Nelms and he’s bankrupt. However, you are more than welcome to go after anyone you want, just not the bankruptcy court, the State of Alabama or the official receiver.

      Steve

  • Luz

    I am one of the many clients of Allegro Law. I just realized what is going on, and only did so because on April 17th, 2010 they took out $571 out of my account and have not paid my creditors yet. They usually were like two weeks to actually send the money out. On my account, they show that they supposedly sent out the payments on 3/24, but I have checked all my accounts and none of them have received a dime. Of course I call Allegro Law and here the message about what is going on. The next withdraw is supposed to come out tomorrow 4/17, I just hope I can call my bank to put a stop on it before they make the withdrawl. Anyhow, my question is “What do I do?” I’ve read that I’m supposed to stop the payments and what not. I had my Mom listen to the message Allegro Law has and she thinks that they are going to take my debt with them. Is that the case. On their recording it says something about receiving a form or something to file a claim in this case, but I haven’t received anything. I know they have my correct mailing address because I’ve been receiving my quarterly statements. Do you think I need to lawyer up? What about my $571 that they took out, do I get that back? I am freaking out and don’t know where I’m supposed to look for help. Please send me in the right direction if you can. I would really, really appreciate it.

    Thanks for your time

    Luz

    • http://GetOutOfDebt.org Steve Rhode

      Luz,

      You will eventually receive a form from the bankruptcy form to fill out for you to claim any money Allegro owes you. Don’t hold your breath you’ll get it all back.

      You and everyone else that was on an Allegro Law debt management plan was cut adrift. There is nothing happening on those accounts. Nobody is servicing them. There is no site for the bankruptcy court case, while there was one for the official receivers activity. But the official receiver is out of the loop now that it has been taken over by the bankruptcy court.

      You need to contact your creditors and/or contact a credit counseling group to take over your account, right away! If you want, you can contact this credit counseling group that has assisted other Allegro law clients.

      Steve

      • http://Website Georgia

        Steve, Georgia here. Ok, so how do we file a claim with the bankruptcy court. All former clients of Allegro should be paid before any of his creditors. I called the Middle District of Alabama Bankruptcy court today. I spoke to a woman that said they will be sending out forms within the next two weeks. She also said that there is a website, http://www.allegrobankruptcy.com where we can go and get the forms if we don’t want to wait on them to mail a form. I want to know when the meeting of the creditors is. All of his Allegro Clients should show up for it. I’m thinking about going myself. Thank you again for this site.

      • http://Website Georgia

        Hi Steve, Georgia again. I went to the site 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. Plus we have no idea how screwed up their records must be.

  • Susie

    I am one of the unfortunate clients of the Allegro law debt settlement company. I found out Friday that they went bankrupt and now I am making the embarrassing calls to my creditors to try and get them paid. I ran across your web site while I was trying to look up answers to this problem, and that is when I found all the articles about this issue. In the one article I saw that you spoke to the court appointed receiver and he assured you that there will be a dedicated web site and phone number coming soon, where and how will we know when this happens, so that I and other clients can make contact to try and get our money, that Allegro stole from us. I am trying to get out of debt not get into more of it. When I contacted one of my creditors he told me once I get caught up on payments to contact a credit counselor (phone number on credit card statement) that is run by the government and they are a non-profit company to help me (do you know anything about these counselors and if I should trust them, I am really skeptical at this point). I would appreciate any help at this point so that I can get on with trying to get out of debt and on with my life, because right now this is all I worry about and I can’t think about anything else and it is effecting my everyday life, you know what that is like. Thank you in advance for any advice you can give me.

  • Joel

    Hi Steve,

    I happen to be one of allegro law client and just learnt today (4/19/2010) that it’s gone bankrupt when I called their office. I ‘m having these strings of credit card debt which I put on debt management program with allegro law LLC. Occasionally, I gets calls from my creditors stating that I’ve missed a payment even when I already fulfilled my obligation of making my payments on time to allegro law LLC !!! This has actually made me suspicious of their activities in the past and was already thinking of changing to another dept relief service provider. But I held on due to series of trouble one usually goes through with setting up such program. My first observation was that the interest rate didn’t seem to me to have dropped in any significant way and my balances on each of these credit cards are still at staggering figures even after close to two years of being on the program without missing any of my monthly payment to them. I called allegro law LLC’s attention to these but what told that the figures I see on my monthly statements from my credit card companies(in terms of interest rates and account balance) are not reflective of the actual figure as the actual figure are hidden (I found that difficult to believe though). I was surprised this month of April when representatives from chase Card Company started giving me calls that again, I’ve missed a payment. This led me to calling the debt relief program to find out what happened. I was shocked to hear from them that the company has gone bankrupt! The lady I spoke to then told me I should contact my creditors to inform them that I will be making direct payment with the current set up plan. They also said I will be getting a form to fill out from the bankruptcy (or so) department. Meanwhile, I don’t really know what to do as I don’t have any extra fund to make this month of April payment and the credit card companies are already threatening canceling my plan.

    What next do I do? Get another dept relief program from another company or negotiate with the credit card company directly (I’m skeptical of this second option though due to their greediness)

    Thank you,
    -Joel.

    • http://GetOutOfDebt.org Steve Rhode

      Joel,

      With the bankruptcy of Allegro you are left with three choices.
      1. Go bankrupt yourself.
      2. Contact your creditors directly and see if they will work with you.
      3. Contact this credit counseling group and see if they can take over your account.

      I wish I had better news for you but it is what it is, and that’s bad.

      Steve

  • http://www.lawadvicenow.com David

    That is just CRAZY! There are too many people trying to get a leg up and there are many people who are just sue happy. Crazy!
    .-= David´s last blog ..The Difference Between a DUI vs DWI =-.

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