At a hearing on the approval of my attorneys fees in a Chapter 13 case, the judge questioned the fees I attributed to defending a motion for relief from stay which was granted after three hearings.  Wasn’t this a lost cause from the start, she asked?

My reply was that I had raised questions of creditor misconduct as well as the issue about whether the moving party was the correct person to be bringing a motion for relief from stay.  This issue is developing as a serious issue nationwide as it is revealed that the original notes are no where to be found, and whatever transfers of those notes have not been accomplished according to long standing rules of law.

I replied to the judge that the client had directed me to oppose the motion and had not objected to the fees I sought for the effort.  My application was approved.

But the longer I thought about it afterwards, the more troubling I found the judge’s inquiry.

• Suppose I knew objectively that the debtor was in default and had no hope of getting current?  Does that relieve me of my undertaking of loyalty to the interests of the client?   Doesn’t the Rights and Responsibilities statement in the Northern District obligate me to defend motions for relief from stay?
• Does it mean that if I take a position that the judge believes I should have known from the beginning was a loser, I do so without pay?
• Am I obligated to withdraw if my view of the probability of success differs from the actual outcome?

Like so much in bankruptcy these days, I don’t have any answers.  But the fact the question was raised from the bench is disturbing.

The email said: ” We saw you two months ago about bankruptcy.  The foreclosure is Tuesday.  Can you help?”

I wanted to reply:  “Where have you been in the past two months?  What were you thinking to wait til now to start filing bankruptcy?”

Instead I said: “Bring information, money and be here in two hours.”   But what are people thinking to wait til the last minute?

If, as so many clients say, saving the house is the most important thing, why gamble by waiting to within hours of the actual foreclosure sale to move to file bankruptcy?  Why aren’t your actions (to save the house) consistent with your statements (about the importance of the house)?

Bankruptcy lawyers, especially experienced ones, are few in number and generally overwhelmed with work.  Don’t count on finding available legal help at the last minute.

Here endeth the rant.

Every client asks that question.  My friend Susanne Robicsek walked her readers through the timeline of a Chapter 7. But the real gating issue is “how long will it take you to get your attorney all the needed information”.

It is getting the raw information to us that is the real slow down in most cases.  Cases lag when the client fills out as much of our questionnaire as they find convenient;  provides most of the paystubs; promises the tax return; and has to search for information on the insurance policy.  We hustle to get the schedules done, and the client then doesn’t have all the necessary funds to finish paying us.

As Susanne describes, once filed, a Chapter 7 marches fairly predictably to discharge.  The time required for the debtor to empower the attorney with a full deck of cards is unknowable, to the attorney, and  within the control of the client.

My friend Doug Jacobs advises debtors to tell their bankruptcy  attorneys everything, pointing out that intentional omission of assets risks denial of discharge and even jail.

I seldom see the intentional omission:  much more frequent is the debtor who simply can’t be bothered to read the form and consider whether elements in their financial lives fit the question on the form.

So much depends on making full disclosure.  The minute the trustee discovers at the first meeting of creditors that you have an asset that isn’t in the schedules, the trustee begins to wonder:  what else hasn’t been disclosed?  You, and your attorney perhaps, have lost credibility.  Time and money will be required to clean up the mess created by inattention.

I wish long and often that clients could direct some of that nervous energy and anxiety about bankruptcy into doing a better job getting me all the information necessary to fuel a smooth and successful bankruptcy case.

Forbes has compiled a list of cities where credit card spending is highest. My scan of the list suggests that this list is simply another version of the areas of the country where housing is in trouble.  Homeowners with outsized mortgage payments rely on credit cards to make up the difference needed to support the family.

Which leads me to those TV ads for attorneys or other services offering help with mortgage modification.  Assuming the advertiser is successful in negotiating a mortgage modification, the homeowner is still  left with the debt  that piled up while why struggled with the original loan terms.

Even without the ability to modify mortgages on principal residences, Chapter 13 is a superior tool for addressing the homeowner’s entire financial situation. And the fees for the professional involved are subject to court supervision, something missing from those drumming up business on TV.