How to Tell if You’ve Been Sued

How to Tell if You’ve Been Sued

In Oklahoma it is pretty easy to tell if you’ve been sued. Most Court dockets can be viewed online. What that means is that you can do a quick search and find all cases (for at least most Counties) in which you have been named as a party. Now, I will caution you, nothing is perfect; but OSCN is pretty close. Yes, occasionally a name gets misspelled and doesn’t turn up in a search, yes, in cases with a huge number of parties, not all of them get indexed correctly, but for the most party, you can tell in just a few clicks whether or not you have been sued by just about anybody.

The website is http://www.oscn.net which stands for the Oklahoma Supreme Court Network; and this is what it looks like.

Oklahoma Supreme Court Network Main Page

In the right hand column, about half way down, you will see “Case Search”. Click it and go to the main search page.

Then, you just fill in the blanks. The top box is COURT SELECTION with a drop down menu that lets you pick the County you are interested in searching. If you leave this blank, it will search all Counties – which can be a bit time consuming if your name is John Smith.

The next option is SEARCH BY PARTY. You need to enter your name as you think it would be listed on a lawsuit. So, if your name is Timothy Scott Brown, and you go by Scott, you might want to search for (Last Name) Brown (First Name) Timothy and then do a second search using Scott as your first name.

A simple mistake with this website is assuming that the wildcard symbol is *. It isn’t. The wildcard is %. So, if you want to search for Timothy and for Tim, enter Tim% in the First Name box and it will search for all first names starting with the letters Tim – so you will get Tim, Timothy, Timmy, Timila, etc.

You can also scroll down to the bottom of the page and limit your search by date range. This is helpful if you want to just see if someone has sued you since the first of the year, for instance. So, if you are concerned about a collection suit, or that your Spouse might have filed for Divorce; and you don’t want to sort through the traffic tickets in your younger days, the personal injury case when some idiot ran a red light and hit you a few years ago or that foreclosure case from the 2010 housing crash.

Remember, this isn’t perfect. Also, remember that like all web search engines, it takes some getting used to, so do run some trial and error searches to make sure you are getting things right. In other words, if you do a search on your name and don’t see your divorce from 2007, you are probably doing something wrong.

This is, however, a great tool for calming those nagging worries.

Elaine

The Bankruptcy Courts Remain Open for Business — Sort Of

The Bankruptcy Courts — even the Oklahoma Bankruptcy courts remain open for business — sort of — despite the order entered Friday afternoon by the Oklahoma Supreme Court basically closing all Oklahoma State courts until May 15, 2020 except for emergency matters in response to the COVID-19 pandemic.

First of all, the Bankruptcy courts are part of the Federal court system, not the State court system.  So, this order from the Oklahoma Supreme Court does not effect them in the least.  That does not mean that the Federal Court system, including the Bankruptcy courts, are insensitive to the current pandemic and changes in daily life.

What it does mean is that the Federal court system, including the Bankruptcy courts, are much better positioned to respond to current events.  Essentially all Federal courts went to electronic systems years ago.   The Bankruptcy Court for the Western District of Oklahoma has been an all electronic courthouse since 2006.  What that means is that for most purposes the Courthouse doesn’t accept paper.  All filings, including new cases, are done electronically.  Instead of walking into the Court Clerk’s office, standing in line with a bunch of other germy lawyers, then coming face to face with a Deputy Court Clerk to file pleadings, my computer dials up the Court’s computer and they exchange files — quickly, efficiently and antiseptically.  Filing fees are likewise done electronically.

Now, that doesn’t mean that there haven’t had to be some hasty changes at the Bankruptcy Courts.  Traditionally (which means prior to last week) most courts required that all pleadings (like a Bankruptcy Petition) be signed in the lawyer or his staff’s presence, and the lawyer had to retain the original signature on behalf of the court clerk’s office.  More and more Bankruptcy courts around the Country have been changing those rules in the last week or so.  The Western District of Oklahoma, which includes the Oklahoma City metro area and all parts west, entered an order on Thursday March 26, 2020 allowing for the execution of pleadings with electronic signatures.

Traditionally (again that means prior to last week) First Meetings of Creditors (a/k/a 341 hearings) were held in person, at the courthouse in a packed meeting room.  Procedures have come down very recently for those to now be held telephonically.  Hearing dockets are likewise being conducted telephonically.  Now, large contested hearings with witnesses and exhibits and arguments and stuff?  Good luck getting one of those set; but this too shall be accommodated eventually.

Hurricane Katrina really exposed the greater ability of the Federal system to adapt to disaster.  You would think that in the 15 years since then, State courts would have learned a thing or two from their Federal peers.  You would be wrong.

Elaine

Can I Get Sued in a Bankruptcy?

Most people think of filing for bankruptcy to stop lawsuits, but it is possible to get sued in a bankruptcy – or to do the suing. I’ve written recently about people who have been sued in the GMX Resources bankruptcy for fraudulent transfers for receiving dividends on preferred stock and people who have been sued for the recovery of what are called preferential transfers; but there is a lot more litigation than just this going on at the bankruptcy court.

For most people who file for bankruptcy the process looks a lot more administrative than it does judicial. Most people who file never see their Judge, for instance. No, the person who presides over the First Meeting of Creditors is NOT a Judge. Some standard rules of thumb – if there is no court room, no black robe and no standing when the person enters and leaves the room – you are probably not dealing with a Federal Bankruptcy Judge.

Just because most debtors never see them, doesn’t mean that the Judges aren’t staying busy. Bankruptcy litigation comes in two flavors: Adversary Proceedings and Contested Matters. An Adversary Proceeding is essentially a full-scale lawsuit filed within the context of a Bankruptcy case. It begins with a Complaint and a Summons, followed by an Answer, discovery, motions, evidentiary hearings and finally concludes with a trial.

Adversary Proceedings are required to determine the nature or extent of a lien, revoke a discharge or plan confirmation, object to a discharge, recover property of the estate, provide injunctive relief, declaratory relief or subrogation; and certain sales of property must be approved by an Adversary. Essentially anything else in the Bankruptcy Court where two people are arguing or disagreeing qualifies as a Contested Matter, which is quite useful; because in a contested matter you have full access to discovery and other litigation tools that are generally considered part of a lawsuit rather than just a motion hearing.

Some things can be the subject of either an Adversary Proceeding or a Contested Matter. A violation of the automatic stay, for instance, may be brought by either procedure. A violation of the discharge, however, generally is brought by a Contempt Citation, which is a Contested Matter.

So, what is the difference? Adversary Proceedings have greater procedural and due process protections built into them. They must be served like a lawsuit. They have a longer answer time. They have more structure to them which helps to manage greater complexity, a larger number of parties, more witnesses, more complicated issues. Contested Matters are procedurally more flexible. A Contested Matter may be a simple motion – motion with brief filed, fourteen days later a response with brief is filed, hearing set and heard generally in an hour or less. Of course, a Contested Matter may also have a long period of discovery, with related motions filed and culminate in a day or multi-day trial with lots of witnesses and exhibits. So, Contested Matters are inherently more flexible. The Court is expected to adapt procedures to fit the matter at hand. Adversaries are expected to be complex issues and so are treated that way automatically.

For something like a violation of the automatic stay, which may be brought in either form, I consider the following in making my choice: has the defendant appeared in the case, otherwise, the formal service procedures of the Adversary Proceeding will afford greater due process protections. How many facts will be in dispute? What is the nature of my client’s damages? How much post petition discovery will I want? How much time will I want to prepare the case? Even after considering all of these things, I may still file a case and have the Judge adapt the procedures for it as if it were the other. Judges can do that, and they will if they think it is necessary either for due process considerations, to protect the rights of a party or to make the case easier to manage.

So, there you have it. Bankruptcy lawyers may not empanel a jury too often (or ever), but they are still litigators.

Elaine

More GMX Resources Lawsuits

Last week I wrote about stockholders in GMX Resources who were being sued as part of its bankruptcy for the recovery of dividends that they received prior to the bankruptcy filings. There are a ton of those cases filed. I haven’t spent a lot of time with the consolidated docket, but it looks like there were just under 200 Adversary Proceedings filed to recover property or payments of some kind in this Bankruptcy. About half of those were filed against owners of Preferred Stock, and I wrote about those last week. It appears that the other half were filed against people, or more frequently companies, who had received what are called Preferential Transfers; and I thought I this would be a good excuse to explain preferential transfers.

Preferential transfers are the product of two policies: 1. To make sure that when someone files for bankruptcy all creditors who have similar legal rights wind up getting treated essentially the same way; and 2. To encourage creditors to give debtors a bit of room to get back on their feet when they start to show signs of financial trouble.

Here are two examples of that. There is a natural inclination when you know you are sinking fast to want to repay loans from people you care about rather than those you might not. So, when that tax refund comes in, and you know you need to file for bankruptcy, are you going to repay the loan from your Mom or a credit card account? Well, yea, of course you are; but in terms of good policy, it isn’t fair for Mom to get better treatment than any other creditor.

This leads us directly into the next reason. If one creditor can get paid when no one else does and that creditor gets to keep the money, then at the first sign of trouble there will be a rush to squeeze money out of the Debtor – a virtual feeding frenzy if you will. Now, consider this in the context of a small business. Something bad happens. The business falls behind on paying its bills. At the first sign of trouble, all of its creditors take immediate steps to make sure that they get paid. The business collapses, because it lacks sufficient cash flow to keep the doors open.

Whereas, if the creditors had given the business 60 or 90 days to find its feet, the business might have stabilized, paid all its creditors, stayed in business, and continued providing an income for its employees and its owner. When you think about it, this kind of thing happens in the life of virtually all small businesses; and as it happens, creditors usually do give businesses time to get back on their feet – but they aren’t doing that at the risk that someone else will be less understanding and wind up with all the money and no one else will get anything. No. Creditors give debtors a chance to get back on their feet, because they know that if someone else doesn’t and the business files for bankruptcy, the money the greedy creditor got will be taken back and distributed out equally.

The tool for recovering those funds? Why an avoidance action to recover a preferential transfer, of course. This is a tool that bankruptcy trustees use frequently. If a Debtor’s wages are garnished in the 90 days before a bankruptcy? Well, that is one creditor getting paid and making sure no one else does. The trustee can take that money back. This is actually kind of nice when a debtor is being garnished and he owes recent taxes. When the trustee takes the garnished wages back, the first creditor he pays is the taxing authority.

There are defenses to preferential transfers, just like there are to fraudulent transfers. There are also times when it can be in a debtor’s best interests to have a Trustee recover preferential transfers. The nice thing about preferential transfers from the Debtor’s perspective is that the window for the transfer is generally quite short. Unless the transfer was made to (or benefited) an insider (like family), the transfer has to have been made within 90 days of the bankruptcy filing. That is a time period that can usually be waited out if necessary. Of course, if the transfer was to a family member, then the look back period is a year. That can be harder to wait out, although I have done it twice in the recent past.

The worst thing you can do about any type of transfer if you are getting ready to file for bankruptcy is to not tell your lawyer about it. I promise you, what he doesn’t know will hurt you.

Elaine

Lawsuits, Bankruptcy and the Automatic Stay

A bankruptcy filing automatically stays (or temporarily stops) all collection activity against the debtor or property of the debtor; and that includes virtually all lawsuits involving the debtor. That is the easy answer. Yes, a bankruptcy filing will stop that lawsuit against you! It just isn’t always the whole answer.

Most of the time when people call they are asking about a simple collection case – an old credit card, medical bills, maybe the balance due after a repossession. In those cases a bankruptcy filing stays the lawsuit; and when the discharge is entered a few months later, the lawsuit is stopped for good. That answer is accurate for the vast majority of callers. So, if you are worried about a simple collection case, a Bankruptcy will fix it.

The problem comes when whomever answers the phone in the law office doesn’t ask enough questions. If the lawsuit isn’t a simple collection case, for instance, if the person calling is being sued by a former employer for stealing or embezzling money. If the lawsuit is alleging any type of fraud. If the lawsuit is alleging intentional and willful injury to property. If the lawsuit is a paternity action or an attempt to collect past due child support or alimony. Those lawsuits won’t just go away, although the Bankruptcy filing will slow them down some. The worst scenario, though, is a case that looks look like a simple breach of contract case or maybe simple negligence, it may be between former business partners or friends; but the case has gotten emotional and angry and it has become more about a pound of flesh than recovering specific economic damages. In other words, the worst case scenario is a lawsuit that has started to look more like a divorce than normal litigation.

In those cases the answer is still correct that a Bankruptcy filing will stay the lawsuit – it just might not end it, and it really might not stop the fight.

The Bankruptcy Code includes a list of things that are excepted from the Debtor’s discharge. That means that even though the Automatic Stay might stay the problem, when the stay is replaced by the discharge, this type of problem will still be there – waiting. The most common of these are debts incurred shortly before the bankruptcy was filed (presumably with the intention of filing bankruptcy and not paying it), student loans, recent taxes, child support or alimony.

Some of these require that something called an Adversary Proceeding be filed within the bankruptcy. Some of them don’t; and some times the creditor may just cause other problems within the bankruptcy. Stay tuned for more on this subject. I will tag these posts as “persistent creditors” to make them easy to find.

Elaine

What If I Didn’t List Something. . . .

First of all, there is a huge difference between failing to list an asset, like that mineral interest you inherited from your Grandparents, and failing to list a debt, like a car loan. Either one is perjury, if the omission was intentional; and either one can be grounds for a finding of bankruptcy fraud or even a denial of discharge if the facts are right. So, you really do need to put some time and effort into making sure that your Schedules include all of your assets and all of your debts.

So, what happens if you missed something? Assets are a whole different issue, I will touch on another time. Let’s talk about not listing a debt. It can be easy to forget an old medical bill or there can be debts you don’t even know about. Let’s say you had a car repossessed a few months before the bankruptcy filing. You scheduled the repossession on your Statement of Financial Affairs, but you didn’t list the Creditor; because you didn’t realize that you were still going to owe them money.

The creditor doesn’t get notice of the bankruptcy, and a year or two later the creditor sues you for the difference between what you owed at the time the car was repossessed and the amount they got for the car (after subtracting repo fees, sale fees, reconditioning fees, etc, etc., etc.). So, a year or two after your bankruptcy you are being sued for thousands of dollars. Now what?

That depends. The first issue is which chapter you filed under. This assumes that you filed a Chapter 7 bankruptcy. The analysis for a Chapter 13 is quite different. The second issue is whether or not your Bankruptcy was an asset case or a no-asset case. In other words, whether or not your Trustee managed to distribute any money out to your creditors. Most Chapter 7 Bankruptcies are no-asset cases. The biggest variable, believe it or not, is where you filed your Bankruptcy.

If you filed your Chapter 7 Bankruptcy in Oklahoma (and this blog is always restricted to Oklahoma issues, since that is the only State in which I am licensed to practice), and it was a no-asset case; you’re almost home free. As long as the failure to list the debt was truly unintentional and in good faith, your liability for that debt was included in your discharge. That does not mean, however, that you can sit back and do nothing. The creditor has incurred collection costs as the result of your failure to give them notice. So, you need to take action ASAP to let them know about the Bankruptcy. The best way to do this is to contact your Bankruptcy attorney and have them send a letter to the creditor’s collection attorney explaining the facts, providing information about the bankruptcy filing and providing information on the law in Oklahoma as to the inclusion of omitted debts in a no-asset discharge. You can expect to pay for that service, but in my opinion it is money well spent. The last thing that you want to do is wind up facing a wage garnishment that could have been avoided or find that you may have waived some rights by allowing the creditor to continue acting out of ignorance of your bankruptcy filing. Remember, you have a duty to give notice of the bankruptcy filing to everyone you owe money to. Failing to do so does not necessarily leave you at the creditor’s mercy; but that does not mean it is completely without ramifications.

Elaine

What do You Do When You Can’t Pay Your Bills

Most of the people who call me have always paid their bills. They have never been in the kind of position that leads them to call a Bankruptcy lawyer before, and they are scared and don’t know what to do.

The first thing that I tell them is to just breathe. Calm down. Stop the racing mind. Just breathe.
Now, prioritize. Pay the utilities, the car payments, the house or rent, the groceries first. Second, if at all possible keep a small cash reserve. Did you hear me say pay the credit cards? Sure, if you can, you should always pay your bills; but if you can do that, you aren’t reading this. If you are reading this you have lost a job or your income has dropped dramatically, you’ve had major health problems, or even worse, your child has had major health problems. Even good insurance won’t necessarily insulate you from major financial ramifications.

Seriously, I have had people on the phone hyper-ventilating at the thought of not paying their credit cards. I ask them what they think will happen, and they can’t tell me; but it is clearly TERRIFYING. We’re talking asteroid slamming into the Earth, wiping out all life kind of terrifying – which may explain what happened to the dinosaurs. They missed a payment on their Master Card. Ok, so, I’m teasing a bit.

Here is what is likely to happen if you stop paying your credit cards. First of all, they are going to start calling – a lot. This is why God invented caller ID. Then, they are going to shut down your charging privileges – probably not a bad thing. About the same time, they will start reporting you delinquent to the credit reporting agencies. Sometime thereafter, you will get a letter that they are referring your file to a LAWYER for further action. The word lawyer is in all caps, because the only reason for this letter is to be scary. They can send your file to anyone they want to for “further action” or whatever other scary (and generally vague) terms they want to use, and they don’t have to send you a letter telling you they are doing it. When that file lands in the lawyer’s office, his office will also send you a letter telling you that they have it. Notice, that no lawsuit has been filed yet? It is easier and cheaper to try and scare you with letters than it is to sue you. That doesn’t mean you won’t be sued, you probably will be – eventually; but in the meantime you still have a bit more time to try to find your feet.

You will know you have been sued when you are served. The actual rules for service of process are complicated, but if you wind up with a copy of something called a Summons and a Petition or Complaint – odds are pretty good that you have been sued. How do you know that is what these things are? Well, they have the name of the court at the top, then the names of the parties beneath that on the left, with a case number on the right, then a bunch of paragraphs explaining who you are, who is suing you, and why you are supposed to owe them money. Letters start, “Dear so and so”. Court pleadings don’t.

Once you have been sued, you will be given a certain amount of time in which to file an Answer or otherwise appear and dispute the case. If you don’t do that, then a default judgment can be taken against you. Once a judgment has been taken against you, then (at least in Oklahoma) the creditor can attempt to garnish your wages, levy on bank accounts or otherwise force you to pay them money – and it will hurt. A wage garnishment can take up to 25% of your gross wages – not take home – gross. Of course, you will still pay taxes on the pre-garnishment amount,, so your net will be substantially reduced. Most people can’t afford that.

Everyone in financial trouble is different. Some people will decide to contact a lawyer earlier in this process than others. One thing that is almost universally common is that most people who have accounts in collection want to pay them. They frequently put off calling a lawyer hoping that they will be able to pay them. Where this becomes tragic is when they wait too long hoping against hope that something will save them from drowning. Then, their employer is served with a wage garnishment; and they have no money to pay attorneys fees or filing fees. They don’t have the paperwork started to get a bankruptcy filed; and they can’t afford to pay really basic living expenses if they are having their wages garnished. At that point these people are starting to be out of options. So, once you are sued, it is probably time to call a lawyer if you haven’t already and get things started. The collection process takes long enough and filing a lawsuit increases the collection costs enough that if you haven’t found a way to get the account paid by then; you probably aren’t going to.

Once a lawsuit is filed, time is no longer on your side.

Elaine

Don’t Be Afraid to Sue Somebody

A friend of mine, Louis Green, and I were talking last week about talking to clients about being a plaintiff, i.e., suing somebody.  Louis is a consumer law attorney.  He handles many of the same kinds of issues that I deal with, but he practices in District Court rather than the Bankruptcy Court.

A while ago Louis had a man come to see him – who was seriously embarrassed.  He was an older man, who felt like he should have known better; but — to be blunt — he was suckered by a car dealership.

The first thing he needed to understand is that he was taken advantage of by professionals.  This can be hard for a lot of us to grasp (umm, that would include me), but people who are truly professionals at things tend to be better at them than those of us who are really just amateurs.  I hate this.  There are all kinds of things that I think I ought to be just as good at as anybody else — but I’m not, and my kidding myself is hurting no one but myself.  (Why, yes, I do self-manage my IRA — your point?  Sigh.)

This man was old enough to know better.  He had bought cars before.  He knew better than to sign things without reading them, but the print was small; and his eyesight isn’t what it used to be; and the pros made him feel rushed and uncomfortable.  Well, even though he should have known better, that wasn’t his fault.  He was damaged by it, and he stuck to his guns.  He hired a good lawyer; and he won — an award large enough the car dealership required that it be kept confidential for fear anyone might find out how much they were having to pay.

Was all of this embarrassing?  Yes.  Did his adult children find out he had been scammed?  Yes.  Did he have to take the time to go to court and participate in discovery and deal with lawyers?  Yes.  Was it worth it?  That is a question that only he can answer, but I can say it was the right thing to do.

When people come to see me, they are tired of dealing with it all; and they just want it over.  Bankruptcy is good at that, but sometimes, they really do need to step up and be a plaintiff.  Sometimes, you just need to say — No, what you’ve done is wrong; and I am going to put up with the embarrassment and the inconvenience to make you pay for it.  Is it worth it?  More often than not, yes.  Is it the right thing to do?  Yes.

So, think about it.  Sure, you can file a bankruptcy and discharge the underlying debt, but if someone has been incorrectly reporting on your credit report or illegally harassing you about a debt, if a car is a lemon (for information on Oklahoma’s lemon law) or you were scammed by the dealer, at least consider whether or not you should be a plaintiff, as well as, a debtor.

Elaine

What Is It You are Paying For Anyway? Part 1: The Schedules.

Many years ago a lawyer asked his client to list all of his bank accounts. So, the client did. He listed his checking account with the balance, his savings account with his balance; and his retirement account with its balance – $45,000. That was his retirement from Walmart, he told the lawyer proudly. So, that is a retirement account? Yep, sure is. Well, all forms of tax qualified retirement accounts are completely exempt in Oklahoma regardless of value. So, the lawyer scheduled it and went on.

At the First Meeting of Creditors the Trustee asked to see an account statement on the retirement account. The debtor produced one. Turns out this “retirement account” was an account that the debtor intended to be for his retirement. He had retired from Walmart, took his company stock out of his profit sharing plan and put it in an ordinary, investment account at Schwab.

That is not a tax-qualified, retirement account. Nor is there any available exemption for that Schwab account. The Trustee took that man’s Walmart stock, sold it, and distributed the funds to his creditors pro rata. If the lawyer had asked for the account statement, at a minimum, he could have advised the client on how to at least get a fighting chance at keeping that stock. Pre bankruptcy planning is more art than science, but there are some things that could have been done.

One of the things you should be paying a lawyer for is to make sure that when you answer a question, whether it is on his questionnaire or in an interview, that you understand the question and you understand your answer. Bankruptcy is a time when seemingly small details can make big differences. No lawyer can check everything, but saving our clients from the things they don’t realize are important is a big part of our job.

I was looking at some schedules today where the attorney’s questionnaire obviously asked the debtors if their debt was primarily business debt. They answered the question. He didn’t check the math. They may very well be right, but that hinges on the valuation of a claim they have listed as “unknown”. So, they either admit that this isn’t actually a business case (which means that they will have to complete and pass the means test (good luck on that, I’ve seen their income and expenses) and, they will also have to convince the US Trustee that their prospective budget is reasonable, and I wish them even more luck on that one; or, they are going to have to admit to a very large value on a claim against them that is probably not dischargeable.

Oops.

Elaine

Bankruptcy Attorneys Fees – What is it that I am Paying For?

So, when a bankruptcy attorney quotes you a fee, what is it, exactly, that you are paying for? What is included, what is not included, at some point will you have to come up with more money or be left abandoned in the midst of a Federal Court proceeding that strikes even a lot of lawyers as confusing and arcane?

The answer to that question is (drum roll, please) – that depends.

I know, and lawyers wonder why it is that people seem to think you can’t get a straight answer out of us. Sigh.

Here is the interpretation. When you hire a Bankruptcy lawyer (or anyone else for that matter) you do need to find out what it is that you are hiring him to do for you. Your attorney should give you some kind of agreement, that might be a letter, that outlines what he will do for you, what he won’t do for you and what he reserves the right to charge extra for.

Here are some things that go into a basic, consumer chapter 7 Bankruptcy:

• Interview;
• Explanation of Bankruptcy, the terminology, the players, what it will do for you, what it won’t do for you, assets, expenses, Means Test qualifications, explanation of different chapters;
• Research into your facts and circumstances;
• Advising you of any potential problems in your case and options for dealing with them;
• Preparation of Petition, Schedules and Means test;
• Filing the case;
• Providing documents to the Trustee;
• Attendance at First Meeting of Creditors;
• Dealing with secured creditors as specified in the Statement of Intention;
• Dealing with other creditors;
• Responding to any requests for information from the U.S. Trustee or the Panel Trustee
• Filing the post petition debtor education certificate.

Please, understand, that list is not intended to be all-inclusive.  That would take far too much time to put together for a blog post.  It is intended to be illustrative of the kinds of things that go into a Bankruptcy case.

Now, here are some things that aren’t included in that list, because they happen, but they don’t necessarily happen in most basic, consumer cases:

• Pre-Bankruptcy exemption planning, i.e., converting a non-exempt asset (i.e., an asset you would lose when you file) into an exempt asset (an asset you get to keep even though you file for bankruptcy);
• Dealing with creditors before the case is filed;
• Adding creditors or correcting addresses after the case is filed;
• Disclosing additional assets after the case is filed;
• Defending a motion to dismiss or convert based on the Means Test figures;
• Defending a Motion to dismiss for bad faith;
• Appearing at a 2004 examination (basically, a deposition);
• Defending other motions brought by creditors, most commonly a motion for relief from stay brought by a secured creditor who would rather have the collateral than the payments you may or may not be making timely;
• Defending an adversary proceeding, which is basically a separate lawsuit filed within the scope of the bankruptcy;
• Filing an adversary proceeding got for any reason including to determine if a certain debt, like some taxes, is dischargeable;
• Determining value of assets if scheduled value challenged.

There will be considerable variance between what different attorneys do and don’t include in a flat fee, and there will be wide variance if you compare attorneys from different parts of the Country.

I don’t know anyone who includes an Adversary Proceeding in a flat fee. However, the nature of Adversary Proceedings is such that your Attorney should at least suspect one might be filed before the Bankruptcy is filed – unless there is something really important he doesn’t know about. So, that should be discussed specifically at the time the attorney quotes a fee.

I generally quote a fee that I expect will be sufficient to cover the things that I expect to come up in the case. What my fee specifically does not include, other than Adversary Proceedings, is anything that the client got wrong or should have told me about and didn’t.

The easy part of that is fixing addresses and listing additional creditors. I give my clients multiple opportunities to get their list of creditors complete, and I tell them to include all addresses that might be current or correct. So, if someone is left off and needs to be added; well, I will charge extra for that.

If a client is being sued locally odds are pretty good I will find out about it before the case is filed. If the client is being sued under a name he didn’t mention or in another jurisdiction, I might not find out about it – unless the client tells me – when I ask about other names, about lawsuits, about people who might think that the client owes them money – even if the client disagrees. If the client still doesn’t think to mention it and it becomes an issue in the Bankruptcy (and it almost certainly will), then, the client shouldn’t be surprised that I will expect additional compensation for dealing with it.

Sure, mistakes happen and omissions happen; and most of them are simple mistakes. If I make the mistake, I fix it. If the client makes the mistake, then I am going to expect the client to pay me to fix it. Sure, some mistakes and omissions can be expensive to fix (some can’t be fixed at all), but most of them can be fixed for a relatively small amount of money.

However, my fee is pretty all encompassing. Not everyone’s is, but it should be spelled out in the engagement agreement what will and won’t be covered. If it isn’t, ask. If it is, but you do’t understand it, then ask. It is your job to provide the lawyer with the information he needs. It is his job to make sure that you understand what is going on, and that includes the fee agreement.

Elaine