Debt Relief Counselor Aims to Discharge $107 Million Owed to Clients

Money & Debt relief scam There is no shortage of outfits claiming to offer debt relief but provide bigger financial setbacks.

Paul Brinkmann Contact Reporter

Businessman lists $107M judgment on his bankruptcy filing.  A Central Florida businessman who made a name for himself as a debt counselor during the Great Recession has filed for Chapter 7 bankruptcy, listing more than $100 million in liabilities. Timothy McCallan, of Melbourne, was hit with a judgment in February for $107 million in an Alabama bankruptcy for a large debt settlement law firm – Allegro Law – that was shut down by a judge six years ago as a massive fraud.  Now McCallan is telling a court in Florida that he needs protection from that claim and other claims, via his bankruptcy filing. Court investigators in the Allegro case have been pursuing McCallan, because his companies, Americorp and Seton Inc., provided record-keeping and data services to Allegro.

A bankruptcy judge in Alabama had McCallan arrested and jailed for a time, and declared that McCallan had committed a fraud on the court.“Thousands of customers signed up for debt settlement services offered by McCallan and paid him more than $100,000,000.  Almost none of the money was paid to creditors of the customers as promised by McCallan,” U.S. Bankruptcy Judge William R. Sawyer wrote in an opinion entered in February 2016. McCallan, who owns a $1.5 million home on the coast, has been ordered to turn over records related to the Allegro firm. McCallan claimed in court fillings that he did turn over records, but investigators said the data was worthless and incomplete.Most recently, McCallan told the court he’d been delayed because of damage to his home during Hurricane Matthew, which buzzed the Florida coastline in early October. But investigators in the Allegro case said they later learned McCallan’s home suffered no damage. McCallan will be represented in his Florida bankruptcy case by attorney R. Scott Shuker, with Orlando-based Latham Shuker Eden & Beaudine. Shuker said that McCallan hadn’t been represented in the Allegro case for the last few months.

Source: Florida debt counselor owes $100M, files bankruptcy – Orlando Sentinel