Is it worth finding a new attorney?

[flashoflight]

Why on this planet would a trustee “keep” an insurance check that is suppose to be utilized to pay a post petition construction claim to a roofer who, in all likelihood, now has a lien against the property for work not paid? .

Unless I'm misunderstanding something, the house is in the bankruptcy estate, so the roofer can't put a mechanic's lien on it unless the trustee and the debtor goes along with it. He has to wait until the case is over and that's assuming that the time limit for filing the mechanic's lien is tolled by the bankruptcy like the SOL. So it's just a post-petition unsecured debt unless the roofer is successful in converting the debt to secured.

Nevertheless, it's clear that the check belongs to the roofer to the extent of the services and material provided so the debtor's attorney needs to fix this. So this goes back to either the debtor's attorney ghosting his client or the client being unable to pay the post-confirmation legal fees not included in the no-look retainer agreement so no services need to be performed.

[justbroke]

Unless I'm misunderstanding something, the house is in the bankruptcy estate, so the roofer can't put a mechanic's lien on it.

The roofer is not a creditor with a pre-petition claim. Post-petition actions can cause issues because the new debt is not part of the bankruptcy. This is why you can get in trouble with post-filing taxes, newly incurred debt, and other claims arising from post-petition behavior.

Now, the question of whether the house is in the bankruptcy estate, post confirmation, is question of the plan treatment. In most Chapter 13 bankruptcies, the confirmation of the plan vest the property back to the debtor. Even if it didn't vest back to the debtor, there may still be a valid post-petition claim and hence a lien can be perfected.

[flashoflight]

The roofer is not a creditor with a pre-petition claim. Post-petition actions can cause issues because the new debt is not part of the bankruptcy. This is why you can get in trouble with post-filing taxes, newly incurred debt, and other claims arising from post-petition behavior.

Now, the question of whether the house is in the bankruptcy estate, post confirmation, is question of the plan treatment. In most Chapter 13 bankruptcies, the confirmation of the plan vest the property back to the debtor. Even if it didn't vest back to the debtor, there may still be a valid post-petition claim and hence a lien can be perfected.

OK. I think you're right that lien can be perfected. But the roofer still can't do anything more than perfecting the lien until the case is over if the estate doesn't vest to the debtor until the end of the case, which is the rule in my district in California.

[justbroke]

From what I have read, California is one of the few States in which the debtor's property does not revest upon confirmation. (A debtor can change the vesting of the property via the plan. That decision is based on a specific strategy.)

[despritfreya]

flashoflight

Unless I'm misunderstanding something, the house is in the bankruptcy estate, so the roofer can't put a mechanic's lien on it unless the trustee and the debtor goes along with it.

justbroke

Now, the question of whether the house is in the bankruptcy estate, post confirmation, is question of the plan treatment. In most Chapter 13 bankruptcies, the confirmation of the plan vest the property back to the debtor. Even if it didn't vest back to the debtor, there may still be a valid post-petition claim and hence a lien can be perfected.

These are very good points. All the more reason to get the contractor paid (I’m thinking a constructive trust or equitable lien against the insurance proceeds). If the contractor is smart enough to hire an attny he/she will get the stay lifted for the purpose of perfecting the lien against the property under state law. Remember, property rights stem from state law, not bankruptcy law. Homeowner may be responsible for the legal fees of the contractor so resolution sooner rather than later makes sense.

Des.

[imtryingtho]

Hi everyone, thanks for your responses!

To be clear, I’m not even sure that the trustee can do anything with the check. The original insurance check was made out to us and our mortgage company. We sent it to the mortgage company fully endorsed and they cashed it.

The first check the mortgage company sent was 25% of the funds once we chose our contractor and they sent us the check directly. So you can imagine our shock when we finish repairs, submit everything, and I see the document online says the final check was sent to the trustee. When I called the mortgage company they said it’s standard for the final payment to be sent to the trustee. I’m like thanks for the heads up, do you want this contractor to get paid or not? It feels like we were tricked into this situation, the mortgage company was up our butts constantly about making sure every single repair was done. The mortgage is part of the 13 and I imagine that considering the mortgage company has an interest in the repairs, the trustee would be making sure they’re done and the contractor gets paid. The trustee has seemed reasonable so far, not that I have experience with other trustees. But the trustee can only know what our attorney tells her which apparently is nothing. So far $30k hasn’t magically appeared in the data center portal, so maybe the standard will be to mail to our attorney to forward to us?

[imtryingtho]

Oh by the way, we got the insurance check for the recoverable depreciation ($1800) and it’s just sitting on our counter. I’m not even sending to the mortgage company until the rest of this is settled.

[flashoflight]

imtryingtho So how about your BK lawyer ghosting you and how are you going to pay him for the extra services not included in the no look fee?