Legal Question in Bankruptcy in California

I am being told by Bankruptcy attorney who I paid $1100 upfront for his service and $309 to file in court for bankruptcy that I don't qualify for Chapter 7. When I initially did a free consultation with this attorney, he told me based on what I told him about my current situation (low income, credit card debt, being listed as successor trustee on family property valued at $1.8 million), that I qualified for filing Chapter 7. A different Bankruptcy attorney told me in a consultation meeting that I did not qualify because of the trust matter, the court would force the sake if the family property to pay my debt. After meeting this attorney who told me I qualified, coming to his office 4-5 times in a period of 2-3 months, this attorney who I paid informs me I can't do Chapter 7 because if the family trust matter, information that the other attorney shared with me upfront.

Of course I was disappointed, but more to the point, I felt that this attorney should have made it a priority to investigate the trust issue and come to this final conclusion much sooner. I wasted my time and feel that either this attorney dragged on my case, or was inexperienced to begin with, due to the fact that it took this length of time to come up with the same outcome a different attorney reached right away.

This attorney says he will only refund me $800.00 which I strongly feel is not right. I want all my monies returned. Why would I pay him because of these circumstances described? and because I paid him to file for bankruptcy and now I don't qualify, and no information changed on my financial or personal side, why would I pay this attorney when I don't qualify and he initially told me I did, the basis for my giving him payment?!!

Please let me know my course of action to collect my full refund. I meet this attorney on Monday, and he is to return all my pertinent documents provided, and I want my full refund, not a refund for half of what I paid.


Asked on 12/29/13, 9:07 am

2 Answers from Attorneys
Peter Lago Peter L. Lago, Atty at Law

It seems the main issue is whether or not the trust situation affects your eligibility to file for Chapter 7. Who's trust is this and what type of trust is it? If it's YOUR trust, and it's revocable, then you own the property and must list it in schedules A and B, and if it's worth $1.8 mil then you can't file Ch 7. If it's an irrevocable trust and was properly set up then you don't own the property and you may be merely a beneficiary of the trust property income, etc.

You state that you are a successor TRUSTEE. That in and of itself does not disqualify you for filing Ch 7, if that's your only connection to the trust and it's someone else's trust (even a family member). As trustee you are not an owner of the property. If you are a BENEFICIARY of the trust, you are still not an owner of the property and that would not disqualify you, except that if you receive a large inheritance within 6 months of your BK hearing, then you have an obligation to notify the court and trustee and you may have to turn over property for disposition by the court. Unless that happens, the court is not going to force the sale of trust property.

As for what to do about the attorney who charged you money, I guess that depends on your initial agreement with him. If you feel he misled you in some way, then you may have to either sue him in small claims court or file a fee dispute grievance with the State Bar and let them help you resolve the issue. Talk it out with the attorney and you should be able to come to some resolution you can BOTH live with!

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Answered on 12/29/13, 11:46 am
Charles Andersen Charles Andersen, Atty

The attorney is offering a generous refund.

You don't stand a chance in front of a bar association or a court.

You are not entitled to a full refund because the issue you describe is not a simple or run of the mill issue that bankruptcy attorneys encounter on a daily basis.

Consider that there are not that many situations where someone wants to file bankruptcy just before receiving a 1.8 million dollar asset.

Your strong feelings of being misused seem out of place under the circumstances

http://www.superdebtbuster.com

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Answered on 12/30/13, 1:03 pm


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