My Unique Ch 13, and its's rejection, and dealing with an attorney who wont respond

[jupitert]

Hello,

I live in Fl.

Filed a Ch7 in 3/10, was discharged in 6/10. House and it's 3 mortgages were included.

In 8/10 a foreclosure Lis Pendens was served.

I contacted my Ch7 BK attorney and asked him if I could hire him to respond to the summons, purely to delay the foreclosure. When I contacted him, he suggested that I file a Ch13 because of my "unique" situation, and based on new laws/rulings he either knew of or forsaw, that I could save my house by filing a 13. Basically strip my 2 second mortgages, and keep the 1st. He gave me some legal talk about how since I techinically didnt need a discharge, his "master" plan was plausible.

Total fee owed to him - $4,500

So I agreed, signed the papers, and paid him $2000 upfront, with the $2,500 balance due in the 1st 5 Ch13 payments, $500 each month.

My 341 was on 11/10, and he informed minutes before we went in front of he trustee that my case wouldnt work due to the fact that the first "unique" case like mine went to court the day before and was rejected. When we went in front of the trustee, and I was sworn in, she reviewed my case, and told us both the same thing he told me minutes earlier; my case wouldnt work.

Outside the room where the 341 was held, the attorney and I had a rushed 5 minute converation about my case, and my options. I informed him that my 1st payment was due on 11/14, I need advice ASAP. He said, dont make your payment, he needs to crunch some numbers and he would get back to me. I pleaded with him to make me a priority as I needed to know how to proceed.

Today is 3 weeks passed since my 341. Multiple emails and calls later, I still have not heard from him. Nor have I made a payment on my Ch13. The case is still active.

I assume the court will dismiss my case due to non-payment, correct?

Also, I feel ripped off, I am out $2k, and technically owe him $2,500. Do i owe him this money; am I entitled to the $2k I already paid him back?

Also, please note that the Ch13 legal document he filed, was basically a copy and paste of my Ch7, minus the debts that were dicharged. In fact, he reported the same balances in the 13 as the 7. I paid him $1,500 for the Ch7, and now $2k for a copy/paste job.

Please advise!

Thank you

[tobee43]

i'm so sorry you are going through this....we are also in florida and know it gets really odd with the trustees...

now let me ask you...what was the reasoning behind the denial of the plan??? i understand you may not want to disclose the info...however, there are MANY people on this board that are going thru a 13.

you also mentioned you paid this atty for a 7....what happened with that...was that also denied???

i know you aren't going to like this, however, all this information should have been communicated between (or usually is) prior to your 341.......most of the trustees here in florida examine your documents prior to your meeting....so something doesn't sound exactly correct...even THO i understand this "decision" was only determined the day before your 341.

also we have a florida forum here on the site http://www.bkforum.com/group.php?groupid=9

i know quite a few Floridians check it out and maybe someone there can help if you pose the question....

we were in the middle district and i know it was really tough here....


as far as the fees what did he or she do for the 7?????? i would ask them straight forward about this...you what the fee schedule clarified immediately...or i would.

what i do not understand is really why this was done decided until the final moments and that's another questions that needs to be address despite the decision of yesterday that was similar to yours.

please let keep in touch with the board! .....also HATE To say...it may be time for another atty....at the very least i would go to a few "free" consults just to get some feedback.

[jupitert]

I too am in the middle district.

The 7 was filed and discharged succesfully.

The reason the 13 was deinied was because of the recent chapter 7 discharge.

You see, my atty's master plan was that beause I had no other debt besides my mortgages, and they had already been discharged in the 7, that I didnt need another discharge. And that many "unique" situations like mine existed, and he thought the court would begin approving cases like mine. Turns out the day before, a case like mine was rejected.

Here's the kicker - The atty found out the ruling of rejected 1st case the day before. I sat with him for 15 minutes the day of the 341 and he didnt begin to mention it to me until a minute before we were called in front of the trustee. The trustee even said to him, "Have you informed your client of yesterday's ruling", and he said " I havent had time"

[tobee43]

I too am in the middle district.

The 7 was filed and discharged succesfully.

The reason the 13 was deinied was because of the recent chapter 7 discharge.

You see, my atty's master plan was that beause I had no other debt besides my mortgages, and they had already been discharged in the 7, that I didnt need another discharge. And that many "unique" situations like mine existed, and he thought the court would begin approving cases like mine. Turns out the day before, a case like mine was rejected.

Here's the kicker - The atty found out the ruling of rejected 1st case the day before. I sat with him for 15 minutes the day of the 341 and he didnt begin to mention it to me until a minute before we were called in front of the trustee. The trustee even said to him, "Have you informed your client of yesterday's ruling", and he said " I havent had time"

they are something these atty's that's for sure....but you know, i know you have been on this forum for a while and know it's crazy down here in florida.


actually, i find your case really interesting and i'm wondering if there is anyway to "appeal" the situation.....the plan appeared to sound....sound. but the atty NOT telling you is inexcusable as far as i am concerned....so now what???????

do you have to wait because you filed 7.....retain or reaffirmed the houses???? what it an asset case??? sorry for all the questions but i'm hoping the atty did not have your reaffirm the mortgages....that could be some type of loophole way out??

[jupitert]

they are something these atty's that's for sure....but you know, i know you have been on this forum for a while and know it's crazy down here in florida.


actually, i find your case really interesting and i'm wondering if there is anyway to "appeal" the situation.....the plan appeared to sound....sound. but the atty NOT telling you is inexcusable as far as i am concerned....so now what???????

do you have to wait because you filed 7.....retain or reaffirmed the houses???? what it an asset case??? sorry for all the questions but i'm hoping the atty did not have your reaffirm the mortgages....that could be some type of loophole way out??

It was a no asset case, and I did not reaffirm any of the mortgages.

My 1st plan payment was due on 11/14, and the case is still active. When will the trustee dismiss the case?

[tobee43]

It was a no asset case, and I did not reaffirm any of the mortgages.

My 1st plan payment was due on 11/14, and the case is still active. When will the trustee dismiss the case?

hopefully someone with chapter 13 experience will answer that for you, however, if the plan was not approved for the 13...why would you make a payment.

is your chapter 7 still active????? i'm somewhat confused with the chapter 7....was it discharged and THEN you went for the 13 to work out payments on your mortgages???

the trustee can keep your case open if they feel there are assets with the 7....so if that case has yet to be decided, it could be an issue.

[NoMoreCards]

I am probably off base here, but according to my attorney the plan of filing a 13 right after a successful discharge of a 7 will not work anymore (after 2005). This was formally referred to as a chapter 20 (7 + 13). The reason he said, was in order to strip the 2nd the 13 needs to discharge and that a discharge is not possible within 4 years of a 7 discharge.

Not sure if that makes sense, but that is what I was told last year. In any case, I wish you the best. Perhaps some of the legal experts will chime in and share their experience.

[tobee43]

I am probably off base here, but according to my attorney the plan of filing a 13 right after a successful discharge of a 7 will not work anymore (after 2005). This was formally referred to as a chapter 20 (7 + 13). The reason he said, was in order to strip the 2nd the 13 needs to discharge and that a discharge is not possible within 4 years of a 7 discharge.
Not sure if that makes sense, but that is what I was told last year. In any case, I wish you the best. Perhaps some of the legal experts will chime in and share their experience.

i think what you are stating is most correctly and that is most likely why it didn't fly....but one would think op's atty would know that??

[NoMoreCards]

i think what you are stating is most correctly and that is most likely why it didn't fly....but one would think op's atty would know that??

Well, the attorney should have known that (assuming that this information is correct, as it was told to me). But now he/she is sitting with a extra 2K in their pocket. It is close to xmas time after all. :-) Perhaps getting a portion of it back is possible?

[tobee43]

Well, the attorney should have known that (assuming that this information is correct, as it was told to me). But now he/she is sitting with a extra 2K in their pocket. It is close to xmas time after all. :-) Perhaps getting a portion of it back is possible?

i would hope that would be the least the law firm would do. and if the atty didn't i would go to a senior partner.

[jupitert]

Thx for the replies.

Would someone please answer the following question:

I would like the ch13 case dismissed and I dont want to pay the atty to file this.

1) Considering I paid him $2k already, should he happily do this for me without addt'l charges?

2) I never made my 1st payment, so will the court dismiss the case for me?

[LadyInTheRed]

Thx for the replies.

Would someone please answer the following question:

I would like the ch13 case dismissed and I dont want to pay the atty to file this.

1) Considering I paid him $2k already, should he happily do this for me without addt'l charges?
Maybe. It can't hurt to ask.

2) I never made my 1st payment, so will the court dismiss the case for me? Eventually. I don't know how long it will take or whether there is any advantage to dismissing it yourself

Based on your initial post and the use of the word "plausible", it sounds like you knew the "master plan" was not a sure thing. Maybe your attorney did not explain the risks clearly enough. I bet the fee agreement states he makes no guarantees regarding the outcome of your case. Review the fee agreement to see if there is any division of what the retainer covers versus what the later payments would cover. Sometimes, the initial payment covers work through the 341 and the balance covers everything after that. Even if there is nothing in the fee agreement that helps, his sense of fair play may be enough. You followed his advice and it didn't work out. Even if you were adequately informed of the risks, he can't feel good about it.

[momofthree]

Sorry about what you're going thru.

Have you already attempted to simply settle the 2nd mortgage now that your personal liability has been discharged?

[catleg]

Just curious, which mortgage filed the lis pendens?

In any case you've got the benefit of the automatic stay for a little while, perhaps this will give you some breathing room to talk settlement with the 2nd or 3rd mortgage (I assume you're still paying the 1st?)

I doubt the attorney expects to collect the remainder of his fee.

As others have pointed out the ch13 lien strip converts the secured debt to unsecured in order to discharge it. Or at least, that's the process as I understand it. I can't understand how he could expect to clear the 2nd and 3rd mortgages without a discharge. Unless perhaps he envisioned the court allowing the lien strip without the debt being discharged. Maybe if there was another party to the debt this might work. Or perhaps the lien would be stripped, the debt becomes unsecured, you pay your means-based ch13 payments to it thru the plan, and at the end it is not discharged, but it is still unsecured by the property. Kind of like a student loan in a weird sense. In a world where these 2nd and 3rd mortgages are effectively worth zero when a 1st forecloses, it doesn't seem like such a crazy idea.

But if you can possibly afford it, I like momofthree's advice, try to settle, since you have no personal liability and hopefully the house has no equity with respect to the 2nd and 3rds.