settlement from attorney after case closed. reopen to claim exempt?

[wrktwoliv]

Long story made short.

Wanted to File chapter 7 in May 2006. Lawyer knew nothing told me I had to file a 13. Filed the
13 made payments until march 2007. Dismissed lawyer, dismissed 13. refiled 7 discharged 6/2007.

Wrote attorney told him if he didn't return what the trustee paid him and my initial retainer of $1500.00 that I was going to file suit for breach of contract in District Court. He really did a terrible job for advertising being an expert in tax and bankruptcy.

He sends me a letter offering without any admitting anything a settlement for $5000.00.

Question: Is this considered property of the old bankruptcy estate??? Do I have to reopen to claim it has exempt? Maryland has a wildcard exemption of $6000 that I have most of it left.

Suggestions of what I should do???

[freshstart06]

not sure but if your case is closed then you it is your money. NOt sure though, I hope someone can help.

[lrprn]

Dismissed lawyer, dismissed 13. refiled 7 discharged 6/2007.

Two questions first...is your Ch 7 is discharged AND CLOSED or just discharged? Was your Ch 7 considered an asset or no-asset case?

[HHM]

Technically, the settlement money is probably part of your BK estate because the event that gave rise to the cause of action (the poor representation by the attorney) occured BEFORE you filed your chapter 7.

From the dates you posted, it looks like your chapter 7 was only recently discharge, is the case closed?

As a practical matter, if you still have enough exemption to cover the amount of the settlement, then I probably would not do anything. Reason being, if anyone ever found it, it would not matter because you could have exempted the funds in the first place.

[wrktwoliv]

discharged and closed 6/26/07

my case was discharged and closed on 6/26/07.

I hadn't planned on filing suit against my first attorney when I filed my chapter 7. But after seeing how easy it was to get the discharge in a no asset case I just couldn't let it go.

I wasn't sure if the settlement is considered part of the estate because nothing was filed before my chapter 7 petition and I didn't have any intention of suing when I filed the 7.

But not sure if it's worth reopening the case for the exemption. I already had to refile the forms when I received a refund from the chapter 13 trustee for some of the payments.

[familyof7]

since your case is closed just take it and do not reopen the case . Even if your trustee finds out and reopens the case at that point you can file the papers to exempt it. (dont rock the boat)

[JRScott]

I am wondering is he offering to pay you back 5000 dollars or is he wanting you to pay him 5000 dollars?

If he is paying you back 5000 dollars and you could have exempted it I'd take it and not worry to much.

If on the other hand he's wanting 5000 dollars more I'd call your chapter 7 lawyer and consult with them.

[wrktwoliv]

the settlement is what the lawyer proposes to pay me to just make this whole thing go away.....it is pretty much what I paid him in total in 2005 to file bankruptcy for me. Luckily the trustee payments I made all went to priority taxes so I didn't lose any money that way.

I guess since the case is closed and no suit is going to be filed. I'm just going to let things lie and not to anything. If somehow the trustee opens it back up, I can just file new schedules and exempt the money.

[CindyLou]

Yea, he doesn't want to get reported to the bar. I bet he's been in trouble before. I would take the money and not tell the trustee. Your case is closed. Anyting you receive is yours at this point unless its the lottery or a large inheritance.