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Bankruptcy Law/Follow-up Chapter 7


QUESTION: Hi again Mr. Horner. I want to give a brief follow up. I had not heard from the firm since my last call request so I generated that letter and I put it in the mail. I also sent a copy via e-mail and fax. I received a response in less than thirty minutes via e-mail and even a voicemail. I have gotten a call from the Attorney twice and three call from the assistant, is that not amazing! Anyway, they are desperately trying to schedule an appointment with me. I just hope they do not try and swindle me with their expertise. I am not sure if they even read all of the letter because they have not said anything about no one showing for the meeting. I also forgot to mention that I was going through my filing papers and noticed that they state that they agreed to collect only $700.00 from me for their services and they also state that that is the amount they received. I was wrong about the amount at first, I guess confusing the number with a previous firm. I paid a total of $1,006.00 plus filing and credit counseling fees. So in the letter I only requested a refund of $806.00. But why would they say they only collected $700.00? I do have a separate receipt that has the paralegal's initials for receiving $1,006.00. Any suggestions?

ANSWER: REVISION:  I would NOT meet with those clowns;  fax and e-mail: "I'm not going to meet with you people; we have nothing to talk about;  All you people did for me was secretarial services, so please send your firm check for the attorneys fees I paid you less $100 and mail it so I have it by x date (5 days from today);  If I don't have the check in my hand by the close of business that day, I will proceed with the formal complaint process.  This is not the first in a series of negotiation letters.  If I don't have the refund you know what happens next and this letter will be attached to my complaint letter to the state bar."  This way they can calculate the atty fees which I believe were 700 plus 306 filing fee -- sending this follow up let's them do just that.

Before you cash that check however, let your chapter 7 trustee know you received it and make sure it's ok with the trustee to cash & keep.

--------------- original message below----------

Isn't it amazing how a properly worded letter will get your phone to ring!  The math works out;  $700 plus filing fee of $306 you gave them = $1,006;   so demand a refund of $600 atty fees as all they should get is secretarial service charges of $100 as that's all you got from them;


As to the other firm, you say you paid someone else for bankruptcy  as well?  Do I understand that they did NOT file the bankruptcy for you?  In that event, you need a full refund from that other firm;  this by the way should have been disclosed in the "statement of financial affairs" in the case you did file as to "everyone you've paid for bankruptcy services"

However, that refund from the other firm belongs to your estate;  what I would suggest you do if I have this right (you paid $1000 to an atty that did NOT file your case;  then paid these other folks 700 plus 306 filing fee);

the right to that refund from the atty that did not file the case belongs to your estate, so:

1) write to your bankruptcy trustee
2)  tell him/her that you just found out that you should have included
this information in your statement of financial affairs (if it's missing) and in any case,
3) you want to bring to the trustee's attention the fact that you paid
this other law firm $1000 or whatever it was and they did nothing for you;  so
4) you have been advised you have the right to a refund, including the right
to file a state bar complaint; and
5) you have also been advised that this right to the refund belongs to
your chapter 7 estate so
6) does the trustee want to go after them?

Before you do anything on that part of the equation, get in writing what the trustee thinks about this.

In your letter be sure you reference your bk case number and tell the trustee who the other
atty or law firm is and exactly how much you paid them and when;  month & year should be close enough

See what the trustee says then let me know -- if the trustee doesn't want to fool with it, we'll go from there, but this is an estate asset.  It's possible you can exempt it at this late date but I'm not sure;  let's assume for now you cannot.  see what the trustee says.

ALSO -- let the trustee know you're demanding a refund of $600 of the $700 you paid the firm that actually did file the case as they totally abandoned you, didn't show at the 341 and won't talk to you;  is it OK with the trustee that you keep that?   Odds are it is but let them know what's going on.  Typically such refunds from your case atty that filed are not taken away by the trustee.

Good Luck!


---------- FOLLOW-UP ----------

QUESTION: Hi Lee, I am sorry I think you misunderstood me. I was confused with amount I paid this firm, I did not pay a different firm for bk. I paid them 1,006. So if I understand I should e-mail them and cancel the appointment this Saturday. Tell them I will not meet and demand the 600 in 5 days for them not showing. Should I expect their services after that. OH and you would not believe they actually had my car towed this morning too.

OK -- got it.  You paid them 700 atty fees and $306 court filing that they gave to the court so it's gone of course. Of the $700 you got $100 worth of clerical services and that's it;  no representation at the 341 meeting, no advice on the car surrender, no advice on car tag paymnts on a surrendered vehlcle;  all the things you asked me about they should have told you.

Don't meet with them;  there's nothing to talk about.  Either you get a check in the mail by the deadline or the complaint goes in the mail.  It seems to me they have abandoned you as a client totally and that coupled with a refusal to return unearned fees adds up to a bar complaint; if you're made whole with the refund, then it's not likely anything would come of a bar complaint and I'd suggest not filing but that's up to you.

Thanks for the clarification.


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Consumer bankruptcy questions invited. I've been filing Chapter 7, 11 and 13 cases since 1985 in Calif and Arizona. I do NOT do homework questions. Let me know what state you're located in when you write. My bankruptcy practice is limited to California and Arizona but inquiries from other states are welcome. Your local jurisdiction determines exemptions. Find more background information at our website, Individual Chapter 11 and small business chapter 11 questions invited. We can also advise on the creditor's side if for example you have a fraud case, money judgment etc against someone who has filed (or is threatening) bankruptcy. We have filed and defended numerous adversary complaints in bankruptcy court and opposed trustees' demands for turnover of assets from time to time.


My partners and I have filed over 5000 consumer and small business cases to date in California and Arizona.

I've been a member of the California bar since 1984 and Arizona since 2004; also a member of the National Association of Consumer Bankruptcy Attorneys, Bankruptcy section of the Arizona State Bar, Tucson Association of Consumer Bankruptcy Attorneys, Arizona Consumer Bankruptcy Counsel and American Hellenic Educational and Progressive Association (AHEPA).

I've written a booklet on land trusts for real estate owners, players and dealers, and co-authored a special edition of "Stop Sitting on Your Assets". I was a writer of a monthly law review article relating to California real estate issues and pending and recently enacted legislation.

Attorney at law, experienced in trial procedures, adversary complaints filed and defended and numerous claims objection proceedings as well as filing cases for consumer and small business debtors.

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