Legal Question in Real Estate Law in California

You hire an attorney to file an action.

You had better be careful with Mr. McCormicik's advice. By virtue of your bankruptcy, all or a portion of that lawsuit or claim may belong to the bankruptcy estate and must be administered in accordance to the terms of the your proposed or confirmed plan and the Bankruptcy Code. Because you mentioned Chapter 13, you have an appointed trustee, and are not a strict debtor in possession as in a Chapter 11. You may not have standing to bring a lawsuit, unless the trustee approves it, if your claim against the broker was a prepetition claim. At the very least, you would need to file an application to retain special counsel, in the bankruptcy court.

I suggest speaking to your bankruptcy attorney, and being very candid. Generally, any settlement or judgment in excess of any claimed exemption would be property of the bankruptcy estate, and have to be turned over to the trustee. Even if the trustee is not involved, you may be subject to the rules governing adversarial proceedings.

Don't just run out the door and hire a fly by night attorney to file an action. Find someone who understands bankruptcy law and proceed with their advice.

Here are a couple of factors to consider.

First, commercial loans are subject to very different guidelines than are residential mortgages and most so-called consumer lending. Be sure the person who evaluated the fairness of the loan was applying rules applicable to commercial lending practices.

Next, while I do not practice bankruptcy law, I believe a right to sue someone is an asset that should be declared in the Ch. 13 filing, and that upon filing, the trustee acquires control of this asset as well as most others. So, the right to sue may belong to the trustee and the suit may belong in bankruptcy court as a special proceeding. I am by no means certain of this, especially since this is a "13" and not a Ch. 7 or 11, with which I am a little more familiar. Maybe you should contact the trustee directly, cc to your lawyer?