Legal Question in Bankruptcy in Maryland

Improperly Conducted Settlement

I refinanced my home in March of 1998 in order to pay off a Chapter 13 that had been filed in 1994. We had received approval from the trustee to do this. The title company that handled the closing sent payments from our closing directly to creditors rather than to the trustee for disbursement. For this reason the trustee would not discharge the 13. After 1 year of fighting and at least 40,000 of lost equity, we had to convert to a Ch. 7. This lost time and the refiling of a 7 have further destroyed our finances. I also feel my job was lost due to this incident. Can I sue the title company for damages and is this recommended? The lawyer that handled the closing would not even come to court with me to speak to the trustee.


Asked on 12/07/00, 3:21 pm

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

Re: Improperly Conducted Settlement

It looks like there may have been malpractice by the settelement lawyer (depending on what his instructions were, etc.), but even if there was, the cause of action was probably lost as a result of your conversion to Chapter 7 -- unless you scheduled that cause of action on your conversion schedules as an asset and the trustee abandoned it. If not scheduled, the asset belongs to the trustee, and you can no longer say you own the claim because you stated under oath that you do not have it as an asset.

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Answered on 12/08/00, 10:24 am


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