This is an update from the blog entry I created in October of 2013, last year. In it, I described that a property settlement in a divorce is dischargeable in a chapter 13, but not in a chapter 7. The purpose of this blog entry is to highlight the problems that can occur when a debtor hires a bankruptcy attorney who has no idea of what he or she is doing.
A proposed client, let’s call him “Bob,” called my office asking for my help, but I was quite confused since Bob had already filed for bankruptcy. I scheduled his free initial consultation, and thought this was a case of a creditor being stupid enough to pursue a debt that was discharged in Bob’s bankruptcy. Great! I would re-open Bob’s case, then file a Motion for Contempt against that particular creditor, and most likely obtain a money judgment in favor of my client and some attorney fees to boot. Well, after sitting down with Bob, hearing the full story, and verifying facts from his prior bankruptcy, I saw, yet again, how his prior bankruptcy attorney collected a fee and left his client in the same bad shape he was in before.
Bob’s situation was as follows – he was in a divorce, and the ex-wife received a property settlement. This was Bob’s ONLY debt. No other credit card debt, medical debt, nothing. Bob went to an attorney who called himself a bankruptcy attorney. This attorney filed a chapter 7 bankruptcy on his behalf. After the bankruptcy, the property settlement was still there. Brilliant, eh? The attorney is $2,000.00 richer, but unfortunate Bob who put his trust in this attorney is in the same situation as he was in before he went to this particular “bankruptcy” attorney (except that he is about $2,000.00 poorer). During Bob’s bankruptcy, his ex-wife filed an adversary proceeding, which his attorney never told him about. This all happened in 2011. The attorney told Bob that he cannot get rid of this debt because of a change in the law, making Bob believe that when he hired this attorney, he could get rid of this debt, but since he had retained this attorney, the law changed and now he cannot get rid of this debt. What the attorney failed to mention to unfortunate Bob was that the law changed back in 2005, and that he (the attorney) was a complete moron in filing a chapter 7 instead of a chapter 13, and the attorney did his research AFTER the fact, and most likely after the ex-wife’s attorney filed the adversary proceeding.
Here is what an experienced attorney, one you will find at Mara & Mara, Attorneys at Law, would have done in this situation. When Bob comes into my office, he fills out an intake form that gives me a snap shot of his financial situation. Based on this form, I would have asked if he has been recently divorced. If a “Yes” is marked on this form, then I ask questions about this divorce that would have enabled me to counsel Bob in an effective way the FIRST time around. I would have told him his options, that this debt can be discharged ONLY upon the successful completion of a Chapter 13 plan, and then given him all his other options, the good and the bad. It is Bob’s choice, but I want him, and all my prospective clients, to have an informed choice. Unfortunately, Bob has already filed a bankruptcy, wasted a lot of time and money on an ignorant attorney, and now has a state court judgment against him from his ex-wife. Now he comes to an experienced attorney at Mara & Mara, Attorneys at Law to dig him out of the deeper hole that some other attorney dug for him. Bob ended his free consultation with me by eagerly thanking me for all the information I had provided, and stated that I spent more time with him than the other attorney did in the entire time he was “representing” Bob in his bankruptcy. This is a comment, and compliment, that I hear all too often when prospective clients have seen other bankruptcy lawyers.