Getting a different BK Attorney to help with exemption/motion.

[vhs]

Hello all,

My current BK attorney doesn't seem to be responsive to my requests, although he needs more time in my situation to understand the exemption that I want to claim in my case.

My concern is that he is not doing a good job, and demonstrated his lack of understanding in my recent conversation with him.

So, since he is not working in my best interest (and he has a good relationship with the trustee, which I think works AGAINST me), I am considering another attorney to handle these exemptions/motions.

Does anyone have any experience in these situations, where they need to get another attorney, to protect their best interest? If so, how did it work out?

Thanks for any feedback!

[justbroke]

Generally speaking, you can't have two different attorneys working your bankruptcy case. You'd need to have the current one withdraw and find a new one. Finding a new one can be challenging because who wants to take over an existing case?

Attorneys that work in the bankruptcy practice know each other because they all work together. Bankruptcy is an equity system and while the U.S. legal system is adversarial in nature, the friendliness in bankruptcy helps moves things along.

I don't know what you mean by he doesn't demonstrate knowledge? Based on what? You have a difference of opinion on something? If it's something that will be litigated then you'd typically need to pay the attorney more money at an hourly rate. If this is about an exemption, he has to make sure that he understands it before making a claim of an exemption that is obscure. Perhaps the attorney doesn't believe the exemption applies in this case and has reviewed local caselaw?

Changing horses--I mean attorneys--midstream is never a good thing. It reads like you need a face-to-face appointment with your attorney and come to some understanding on what you'd like to do and how your attorney thinks that particular strategy would work. The attorney isn't likely going to work on contingency, so be prepared if they say it's Y hours at $XXX rate.

[vhs]

Generally speaking, you can't have two different attorneys working your bankruptcy case. You'd need to have the current one withdraw and find a new one. Finding a new one can be challenging because who wants to take over an existing case?

Attorneys that work in the bankruptcy practice know each other because they all work together. Bankruptcy is an equity system and while the U.S. legal system is adversarial in nature, the friendliness in bankruptcy helps moves things along.

I don't know what you mean by he doesn't demonstrate knowledge? Based on what? You have a difference of opinion on something? If it's something that will be litigated then you'd typically need to pay the attorney more money at an hourly rate. If this is about an exemption, he has to make sure that he understands it before making a claim of an exemption that is obscure. Perhaps the attorney doesn't believe the exemption applies in this case and has reviewed local caselaw?

Changing horses--I mean attorneys--midstream is never a good thing. It reads like you need a face-to-face appointment with your attorney and come to some understanding on what you'd like to do and how your attorney thinks that particular strategy would work. The attorney isn't likely going to work on contingency, so be prepared if they say it's Y hours at $XXX rate.

Coming in loud and clear.

I guess my concern is a rogue Trustee.

Is that possible? Seems like it might be.

[justbroke]

I guess my concern is a rogue Trustee.

What's a rogue trustee? If you claim an exemption, the bankruptcy estate--represented by the Trustee--can object to the claim of exemption. Then they have the burden to prove it doesn't apply in a hearing before the court. The burden could shift if they show sufficiency that the exemption does not apply in your particular case.

Remember, the trustee represents the bankruptcy estate and is the de facto representative of the creditors. Creditors and others with an interest can also chime in and object to your claim of objections, but it's mostly done by the trustee as they administer the case. I can't tell you if the trustee would object to any claim of exemption of want a piece of the pie.

From what I remember, you didn't even claim any exemption in the lawsuit.

[vhs]

What's a rogue trustee? If you claim an exemption, the bankruptcy estate--represented by the Trustee--can object to the claim of exemption. Then they have the burden to prove it doesn't apply in a hearing before the court. The burden could shift if they show sufficiency that the exemption does not apply in your particular case.

Remember, the trustee represents the bankruptcy estate and is the de facto representative of the creditors. Creditors and others with an interest can also chime in and object to your claim of objections, but it's mostly done by the trustee as they administer the case. I can't tell you if the trustee would object to any claim of exemption of want a piece of the pie.

From what I remember, you didn't even claim any exemption in the lawsuit.

Thank you for the reply.

Yes, the lawsuit pending was listed, as it is required by law, so I am good there.

My attorney doesn't understand exemptions as well as he should. The law clearly states I have an exemption. So, at this point, I am not worried. My other, well rounded attorney, tells me I have the exemptions.

My concern was the possible corruption that might be going one behind the scenes when it comes to trustees or exemptions. But, the law is the law, and I should be covered in this situation.

[vhs]

Generally speaking, you can't have two different attorneys working your bankruptcy case. You'd need to have the current one withdraw and find a new one. Finding a new one can be challenging because who wants to take over an existing case?

Attorneys that work in the bankruptcy practice know each other because they all work together. Bankruptcy is an equity system and while the U.S. legal system is adversarial in nature, the friendliness in bankruptcy helps moves things along.

I don't know what you mean by he doesn't demonstrate knowledge? Based on what? You have a difference of opinion on something? If it's something that will be litigated then you'd typically need to pay the attorney more money at an hourly rate. If this is about an exemption, he has to make sure that he understands it before making a claim of an exemption that is obscure. Perhaps the attorney doesn't believe the exemption applies in this case and has reviewed local caselaw?

Changing horses--I mean attorneys--midstream is never a good thing. It reads like you need a face-to-face appointment with your attorney and come to some understanding on what you'd like to do and how your attorney thinks that particular strategy would work. The attorney isn't likely going to work on contingency, so be prepared if they say it's Y hours at $XXX rate.

Another question I had for you is can a bk attorney refuse to do a motion for an exemption? If it was a legit exemption, then they would have to do it, I think I would be correct here.

[flashoflight]

My case had a somewhat similar settlement that partially involved wages and an exemption issue. But it wasn't all wages. If your attorney is any good, standard operating procedure is to ask the other people in the debtor's bar for an opinion which is what happened to me. So shopping attorneys won't help and it's a terrible idea anyway. In my case, he even asked the trustee attorneys in a hypothetical without dropping any names. As JB already mentioned, the debtors bar, creditors bar, and trustee bar all know each other very well. They have little secret groups and talk among each other all the time in a professional manner even though they all represent completely opposite interests. Same thing happens between criminal defense attorneys, public defenders and prosecutors. They all attend the same professional conferences and schmooz and the judges show up at the conferences too. As far as a rogue trustee, there is no such thing. They represent the interests of the creditors and should aggressively attack your wage exemption because quite frankly, it's not wages if the money didn't come directly from an employer's payroll. Common sense. And the trustee knows the judge very well and what will fly. If you're trying to put your lawsuit into a wage exemption and your lawyer says it won't work, it isn't going to work. End of story. I got stuck too. So how did I get my money anyway? Unfortunately that answer is going to the grave since it's all confidential.

[justbroke]

Another question I had for you is can a bk attorney refuse to do a motion for an exemption? If it was a legit exemption, then they would have to do it, I think I would be correct here.

You don't motion for an exemption. You either have one and schedule the exemption on B106-C (I think that's what they call the form now), or you don't have one and you don't schedule the exemption. What you have is two different attorneys that see the exemption differently. It doesn't necessarily mean that either is right or wrong. One agrees with you and the other doesn't appear to agree with you. You say that the law is clear, but it mention wages. Is a settlement wages or is it nothing more than a judgment. The taxability of a judgment or settlement does not make it necessarily wages by definition. It is definitely income and that's how taxation works... on income. Certain income is taxed differently (capital gains is taxed differently than ordinary income).

The question remains. Why not ask your currently bankruptcy attorney if they believe a settlement in a wage dispute are "wages" or just ordinary income. Then you'll know their position. There may be nuances to the wage exemption (75%) which talks about "earned" wages and not necessarily income from a penalty on wages.

I'm not an attorney and I won't pretend to understand any subtle differences but it reads as though your attorney is clearly not seeing the same thing that you are seeing.

Again, and as desprifreya wrote earlier in another thread, it's not so much to just list the lawsuit on Schedule A/B as required, but also to list any exemptions in that property on Schedule C.

[despritfreya]

This back and forth is not going to get you anywhere. If there is an objection, you will either litigate your entitlement or settle with the Trustee.

N.D. Cent. Code § 28-22-03.1(9)(e) states:

Additional exemptions for residents. . . In addition to the exemptions from all attachment or process, levy and sale upon execution, and any other final process issued from any court, otherwise provided by law, a resident of the state may select: 9. The debtor's right to receive, or property that is traceable to: e. A payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

So:

1. Does your "right" meet the test of traceability?
2. Did you properly claim the exemption?
3. What is reasonably necessary?

These are questions of fact. If the Trustee objects and you do not settle, you will have to prove your entitlement.

Discuss this with your attny. If your attny is not capable of handling this issue ask him for a referral. An attny can be retained on a limited basis for a specific purpose but it is going to cost you.

And one last item: The trustee and your attny are not conspiring against you. There is no corruption. If I recall correctly, you filed a Chapter 13 and then converted to a Chapter 7. I could be mistaken about the conversion however, once you put yourself into the Chapter 7 you lost control. The Chapter 7 Trustee has a job to do. He has a fiduciary duty to the creditors NOT YOU.

Des.

[vhs]

Thanks for all the feedback.

The money is coming from payroll, and is considered wages, so it's clear case in my favor as an exemption.

I think what happened is the BK attorney and trustee didn't understand that my case went into settlement, and the money from the settlement was from a retaliation, not from winning a lawsuit that went to trial. The case never went to trial, and instead went into a settlement for "double back pay", and part of that settlement was to drop the lawsuit. Big difference there, and this allows me to exempt because it is compensation for wages (double back pay, not from any lawsuit win).

Now, the trustee can say "no" to the settlement, and go to trial. But, that would not happen because there are other parties in the lawsuit, and that party wants to settle. So, it will either be a no lawsuit and a settlement or "roll the dice" on a lawsuit. Even in the settlement, the trustee can get some of the money, the other 25% (again, I might fight this because I am insolvent right now).

Going to trial is going to be expensive and will also be no guarantee that we will win the case. Too much uncertainty. I also have read that well over 95% of cases don't go to trial. I don't think the trustee wants that headache, and if we lose in court, that is going to be a costly mistake, that offers little upside to the creditors. Do creditors really want this to go to trial? No way. They might lose money if they take that route!

So, it would appear that the duty of the trustee is to go ahead and allow the settlement, which would then make me eligible for the exemptions under wages, because a retaliation settlement from an employer is considered wages under "double back pay".

I hope I am making sense here.

It has been a surprise that my BK attorney didn't understand this wage exemption, and I am just disappointed that he didn't see this clearly, the way I do and the way that my non BK attorney understands it. But, they just didn't understand that nature of the settlement and that the money will come from the settlement, not from a lawsuit that went to trial (as I mentioned, we never went to trial).

But, my BK attorney will come around when it is explained to them from a peer, and not from little lowly me, an informed citizen. )). Well informed because I visit this place. )).

In other words, the retaliation verbiage saves me in the confidentiality agreement because a retaliation is wages or payroll, and allows me to exempt up to 75% or more (because I am way behind in my bills right now and might get the additional 25% because of hardship that I can prove).

Has anyone ever heard of a case like this? I can't find anything online about it.

It is definitely a rare situation, but I would expect experienced lawyers to understand it all. Being a lawyer is not an easy job, for sure. But, if you have a decade or two of experience, I would expect the job to be very routine and very boring.

There is not much room for personal interpretation in these matters. The law is so clear in this one, and I was just shocked that they (my BK attorney and trustee) didn't get it at first. But, they will. I guess they are stuck in their "BK world" and don't care to learn more the overall judicial system.

[vhs]

Also, I would add, that at the end of the day, even though I am currently in a rough spot financially, that I really don't give a shit. Its just money at the end of the day. I am well educated, fairly healthy now, and have a work ethic and drive that will sustain me for many years.

I just want what is right, and the law is clearly in my advantage here. I have the tendency to be overly transparent, and that has hurt me in the past, but not here. I am right, and I just want the law to work, the way it should.

I also have learned that some people are just not as "intense" about their work, the way I would be. If I were a lawyer or trustee, I would be on top of all this, and be able to answer 99% of situations by experience. Sure, situations come up, and things need to be researched. But, I just thought this was a common and easy situation, a clear wage exemption, that I felt my trustee and BK attorney should see immediately. Instead, they "make me" sweat this out a little through their lack of understanding of the law, their field, not mine.

[despritfreya]

In your prior posts you state that your exemption is for future earnings. . .

the lawsuit I have is a retaliation, where I lost future earnings that I can prove.

I am anticipating the possibility that my trustee will take some money from a suit I had pending in the chapter 7 bankruptcy that I have, that is discharged, yet still open. But, the law clearly states that I am correct from the exemptions under "loss of future earnings".

Now your are asserting that you are dealing with back pay:

this allows me to exempt because it is compensation for wages (double back pay, not from any lawsuit win).

Maybe you have both however, I think you need to let the Trustee do his job. He will file a 9019 and notice it out to all creditors and interested parties. At that point, if justified, you can file your objection.

Des.

[vhs]

In your prior posts you state that your exemption is for future earnings. . .





Now your are asserting that you are dealing with back pay:



Maybe you have both however, I think you need to let the Trustee do his job. He will file a 9019 and notice it out to all creditors and interested parties. At that point, if justified, you can file your objection.

Des.

Thanks for your reply.

Yes, I originally thought it was for "future earnings".

But according to my lawsuit attorney, the retaliation settlement is going to fall under "double back pay". I am 100 percent sure I will get the 75% exemption and I hope I can qualify to get it all, based on my current insolvency, that I can easily prove. I was also surprised the trustee retained counsel for this because they are not going to get much in this situation.

My lawsuit attorney is going to get most of that 25%, if I don't get it all. Seems risky to do that, given the case. I really don't see it going to trial, because the settlement amount tips off what the case is worth, and it is really not a huge amount of money. It is a reasonable amount based on less than a year worth of wages. I just want the law to work the way it should, and if that is what happens, I don't see anything going against me in this situation.

All of this started (including my eventual BK) because of unethical practices from my previous employer, and my honor code that goes above "money making schemes". That is the price to pay for doing what is right in this predatory world, I guess.