Apply 2 Save head seeks debt relief

Derek Oberholtzer, president of Apply 2 Save Inc., has followed the Coeur d’Alene mortgage modification company into bankruptcy.

Oberholtzer filed for liquidation of personal assets of less than $50,000. Debts are less than $500,000, according to the Chapter 7 bankruptcy filing made last week in U.S. Bankruptcy Court in Coeur d’Alene. Oberholtzer lives in Hayden.

The barebones petition omits several documents normally included in a bankruptcy filing. Oberholtzer’s petition for bankruptcy could be dismissed if he does not submit the documents to the court by July 22. His attorney, John Munding, said the documents will be filed on time.

Meanwhile, in a separate, companywide bankruptcy, trustee Nancy Isserlis has sued PayPal Data Services Inc. for failing to surrender control of an Apply 2 Save account valued at $220,415. PayPal, according to the lawsuit, continues to allow deductions on the account in violation of a court stay. The complaint seeks fees as well as actual and punitive damages.

Apply 2 Save filed bankruptcy June 9, less than a year after the company opened for business. Company bankruptcy documents list $5.2 million in assets and $7.8 million in liabilities.

Its reported liabilities include obligations to thousands of clients who did not get help renegotiating their mortgages. The clients sought Apply 2 Save’s intervention with banks about to foreclose on their homes.

Liabilities also include obligations to its workers. The company laid off more than 200 employees. Many were not paid for their final weeks of work.

A lawsuit filed in April by the State of Idaho in Kootenai County claims the company violated consumer protection laws and preyed on desperate homeowners. Some clients paid as much as $1,500 up front for help, according to the attorney general’s complaint. Apply 2 Save often did nothing or put off clients by repeatedly demanding paperwork already submitted, the complaint said.