Should I consult with local BK attorney who is also a Trustee?

[octoblonde]

I've been having trouble getting straight answers regarding some exemptions and assets from 2 local BK law offices, so I had another idea. There is a local attorney who has a private practice for BK and he's also one of the 2 Chapter 7 Trustees for this district. I was thinking that he, of all people, would KNOW what would fly as far as how to value my vehicle, if a Trustee would come after a jointly owned home, if they'd try to get my lump sum SSDI, etc. Obviously, if I chose him to represent me, I would get the OTHER Trustee for my case. Is this a good idea to consult with him? If I choose not to hire him, could I still end up with him as my Trustee?

Thanks!

[frogger]

There is nothing wrong with using a trustee as a bk attorney, however be aware that the trustee might be more "conservative" when working your case. The trustee should know what will fly, but probably won't be willing to push anything that might be "iffy".

If you choose not to hire him and he became your trustee, it really just doesn't matter, because you're going to have done a full and complete financial disclosure, and have nothing to hide.

[HHM]

Even though the information that is usually conveyed in a consult is not inherently confidential, there is still an expectation of privilege. So, if you consult with a Trustee, don't hire him/her, later file BK and that trustee is assigned your case, they would need to recuse themselves unless you expressly consented to having the person administer your case.

As Frogger points out, there is nothing inherently better or worse for using a trustee. I think it is a little worse in some cases, especially if the person provides lousy service. As with hiring any professional service, you want to hire based on service and expertise. I think most people "assume" trustees have expertise, but like most attorneys, are generally lousy business people and couldn't provide quality customer service to a dead person.

[octoblonde]

The reason I'd want to consult with the Trustee is because I seem to be getting conflicting information from other offices regarding protecting my house and vehicle and whether I have to spend all of the SSDI backpay that I have in the bank. I don't want to just blow that money. I want to spend it wisely for my Son & I to have a fresh start. I might have to buy my vehicle back. Is a Trustee likely to want an 8 year old Chevy Avalanche that's been in an accident (shows up on carfax report) and needs transmission work, has a broken power seat & moonroof and has lots of scratches and hail damage? When I look up the value, I'm getting numbers anywhere between $8k and $18k. That's quite a difference. I can use Federal unused homestead exemption if I don't need it for the house. I'm thinking this Trustee would know what reference I have to use to determine the truck's value.

[AngelinaCat]

If we had known then what we know now, we would have gone with our local BK attorney who also is a trustee. He is very highly regarded.

However, at the time, we were so paranoid about having to file BK in the first place, plus dealing with the cyberstalker that we had been for the previous number of years, we opted to go to an attorney in another town 60 miles away. She turned out to be an almost complete dud.

If you do hire this attorney, and his/her name comes up when trustees are assigned to your case, he/she will recuse themselves and refer you to the other trustee.

Good luck!

[octoblonde]

Thank you, Angelina. I think I'm going to make an appointment for a consult with this Trustee. So many variables to consider. I want to play it safe. If I have to sell my vehicle and spend the money to avoid losing it, I'd rather do that than lose the vehicle to creditors.

[panda]

I think it is worth a shot. At least then you will know. I did use a retired trustee for my case, but she was excellent, if she had been a dud, I would have moved on.

[Peeps]

Octo,

Didn't you mention somewhere that you're using Federal exemptions?

SSDI, including backpay, is exempt under USC 42.407. I just exempted a lump sum of SSDI backpay in a Ch. 7. I'm in a different state but still used the federal exemption for this one item because my state specifically references the federal guideline in the state exemptions. It sounds like every trustee under the sun approaches SSDI slightly differently. Cases decided favorably in one state may have absolutely no bearing on cases in another state. I know that seems weird. Anyway, if you're using the federal exemptions then it's my understanding and experience that lump sum backpay is protected.

My attorney had to specifically research case law in my state to get a good understanding of how to treat the backpay. Yours should be expected to do the same thing. I doubt using a trustee as an attorney will make that process any easier. Best of luck.

[octoblonde]

Thank you, Peeps. Yes, I think I need to use the Federal exemptions (which is new for NY state this year) because my vehicle has too much equity. I need to rely on unused portion of the homestead exemption to cover the vehicle. Even then, there may be exposed equity, depending on how the Trustee wants the truck valued. As far as I'm aware, NY exemptions don't allow the unused portion of the homestead exemption to be carried over to other property. I'm glad you were able to protect your SSDI backpay. When I consulted with the first attorney, I mentioned the backpay being exempt and he didn't say anything to the contrary. He was most worried about getting a current market analysis on my house, hoping it would be less than the last appraisal 2 years ago.

[gmk]

We were recommended to an attorney, who is also a Ch7 trustee, by another attorney I knew. In our case our attorney proved to be extremely confident about "what flies and what doesn't" in his district. In some cases perhaps even on the arrogant/cocky side about certain issues that I felt were important and could affect our case.

He tended to be conservative in that he wanted us to wait the 6 months to fall below median, but when I sent in a draft means test at app month 4, he said it will fly, let's do it. He went on to say that he was sure the US Trustee would question the case but when that happens he would deal with it, don't worry. The US Trustee did and he dealt with it.

If I had to do it again, I would personally seek out a trustee to represent me. TBS, I maintain that one of the best ways to find an attorney is by referrals from other attorneys, preferably someone you know and have done business with. The attorney who did the recommendation for us worked in real estate law and actually had first hand working knowledge of our BK attorney. The added bonus of a lawyer to lawyer referral is that it helps getting in and getting on with your attorney.

[octoblonde]

gmk, thanks for your input. Sounds like you made a wise choice. I am definitely going to schedule a consultation with the Trustee. If you don't mind me asking, what did the US Trustee question?

[gmk]

We were over median, had unsecured debt over $100k and had sizable income in prior years (went unemployed) so a presumption of abuse was filed right after the 341. We, of course, panicked, but a couple of days later, the presumption was withdrawn, if that's the right terminology.

Good luck w' your interview.

[ssmdem]

We used a trustee for our attorney. Best decision we made through the process. We were questioned VERY little during our 341 -- others seemed to be scrutinized a little more. I do agree with the earlier poster who said a trustee is likely to be more conservative when working on the attorney side. In our case - that's what I wanted though. Didn't want anything to come up that we weren't expecting -- the whole process (looking back) was a piece of cake, although I still stressed through the entire thing!

[octoblonde]

ssmdem,

That's exactly what I'm looking for-less scrutiny and as few surprises as possible. I figure this attorney will tell me what he as a Trustee would or would not allow and I would think he has a good working knowledge of what the other Ch.7 Trustee expects.

[ssmdem]

That's exactly how it worked with us. We had consulted with three attornies before meeting with this one. All when questioned about different things would respond with "well maybe," "possibly," "not sure", etc. When we met with this one, every question we asked - definite no's and yes's - with no hesitation. Sealed the deal with me. Ironically -- our trustee for our 341 also works as a private attorney as well. We couldn't have asked for a smoother 341.