A company accused of charging disabled veterans thousands of dollars for VA claims assistance has filed for bankruptcy, and the filing has frozen a nationwide class-action lawsuit against it. The case is a warning about unaccredited claims consultants and a reminder of how fees for VA representation are actually supposed to work. Texas veterans who paid one of these companies, or who are considering it, should understand what the law allows.
What Happened
Trajector Holdings and its affiliated entities filed for Chapter 11 bankruptcy in July, while facing a class-action lawsuit alleging the company charged disabled veterans between $4,500 and more than $20,000 for VA disability claims assistance. The complaint alleges the companies performed claim preparation services without VA accreditation and in violation of federal law, according to reporting from Military.com.
The bankruptcy triggers an automatic stay. That means the class action is paused until a bankruptcy judge decides how the claims will proceed. Attorneys for the veterans say affected former service members may now need to assert their claims as unsecured creditors in the bankruptcy case, and they estimate the number of affected veterans is in the hundreds, if not thousands.
The plaintiffs’ counsel has also questioned the timing of the filing, pointing to the gap between the company’s reported revenue and its claimed debts. Those questions will play out in bankruptcy court. There is no timetable yet.
How VA Representation Fees Actually Work
The rules here are more protective than many veterans realize. Under federal VA regulations, help preparing and filing an initial disability claim must be free. Veterans service organizations, county veterans service officers, and accredited representatives cannot charge for that work.
Fees only become permissible in limited circumstances, generally after the VA has issued a decision and the veteran is pursuing further review. Even then, fee agreements must meet federal requirements.
Companies operating outside the accreditation system don’t follow those rules. That’s the core of the allegations in this case.
Before signing anything, it’s worth knowing what accreditation means:
- Accredited attorneys, claims agents, and VSO representatives are approved by the VA’s Office of General Counsel
- Accreditation status is public and searchable
- Unaccredited individuals who prepare or prosecute VA claims are acting in violation of federal law
You can verify any representative through the VA’s official accreditation search tool. If a person or company isn’t listed, they are not accredited to represent you on a claim.
If You Already Paid One of These Companies
Don’t panic about your rating. A disability rating stands on the medical evidence and the rating criteria, not on who helped you file. A fee dispute with a company is separate from your benefits.
But do keep your records. Contracts, invoices, payment confirmations, and correspondence may all matter if you pursue recovery as a creditor in the bankruptcy or through any future litigation. And if a company is currently billing you or threatening collection, get advice before you pay.
Where Accredited Counsel Fits In
This case is about companies operating outside the system. Accredited attorneys operate inside it, with fee rules set by federal VA regulations and oversight from the VA’s Office of General Counsel. If you have a denied claim, a rating you believe is too low, or a decision you want to challenge, a Texas VA disability compensation lawyer veterans trust can explain what representation should cost and what it should involve.
Glover Luck LLP has represented veterans in disability claims and appeals since 2014, with both founding attorneys accredited by the VA. If you’re a Texas veteran sorting through a claim, an appeal, or the aftermath of an experience with an unaccredited claims company, speaking with a Texas VA disability compensation lawyer is a practical way to understand your options.
