Legal Question in Bankruptcy in Maryland

Bankruptcy issue

During our bankruptcy it is was not disclosed to the Trustee that we had sold property that had a lien on it and now that property is being repossessed by lienholder. This leaves person we sold it to without the property and we have no money to pay back to them. They knew property had a lien when they bought from us and they knew we filed for bankruptcy. I feel the bankruptcy attorney should have disclosed all this to trustee so it could have been handled as part of bankruptcy. Now this person is suing us for fraud because they were not listed in creditors list. Did our attny make a bad decision in keeping this out of bankruptcy proceedings? It was a chap 7, no asset one and discharged months ago but we now have to deal with this lawsuit. Is there no end to bankruptcy??? also do we have to pay bankcy attny to fight this lawsuit or is it part of bankruptcy case he filed for us?


Asked on 12/02/08, 7:59 pm

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Bankruptcy issue

If your bankruptcy attorney knew about the sale of the property and failed to disclose it, it was certainly a bad decision - and depending on the timing it could be worse. It is potentially criminal, and may have been a crime for you not to disclose it as well. If the issue was just not listing the purchaser as a creditor, that is still wrong, but not criminal. While unscheduled debts are still discharged, that rule does not apply to debts incurred through fraud, which it appears they are alleging. As for paying the lawyer, this would not be part of your fee agreement with him - but if it is his fault, he or his malpractice insurance company ought to pay to defend. However, I'm not sure I would recommend you have the same lawyer represent you, since it sounds like he already made one big mistake.

We practice bankruptcy law throughout Maryland and would be glad to take a look at the case and advise you. Feel free to contact me directly.

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Answered on 12/03/08, 9:18 am


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