How much

[1mquestion]

Is my lawyer entitled to a portion of my garnished wages after they are recouped post bankruptcy? If so, how much?

[sunshinepa]

Why would your lawyer be entitled to any wages garnished for debt unless you specifically signed something with him to that effect? I have never heard of such a thing.

[1mquestion]

Good luck on your discharge. We got our yesterday!!!

Both he and his legal aid mentioned that he would take a % if he recoups it. But we never signed anything agreeing to it. My concern if that we still have to deal with him in the next year and I dont want to have bad blood.

[DesdemonaB]

Hello

Do you mean your trustee? It is very common for a garnishment to continue after filing your petition, as the OC/CA/LF must submit to the circuit court a request for a release of garnishment; it must be signed by the judge then sent to the bank(s) and employer(s) before they can legally discontinue the garnishment. It could take several pay periods before that happens, in which case the the bank(s) and employer(s) must return garnish money from the petition filing date back to you.

Trustees view the garnishment as preferential payments, if they are filed within 90 days of the petition filing and depending on the the total amount taken out from the first pay period garnishment to the last that money because an asset of the estate. Both you and the creditor may be asked to return all payments depending on the garnishment date.

I had a garnishment effect when I filed, my trustee asked what the total amount taken, if any has been returned (my garnishment last two more pay periods before it end) and requested all pay stubs showing the garnishments. The funds were return to me via my paycheck, and I held them aside till I received the trustee's report. In the end she did not pursue the returned funds, but I was ready to return them if she asked for them.

Not knowing where you are in filing, per or post 341 I would hold all funds aside till your trustee report on if you are an asset case or not. You lawyer is not entitled to any portion of your returned funds due the garnishment as they are assets of the estate.

[DesdemonaB]

Good luck on your discharge. We got our yesterday!!!

Both he and his legal aid mentioned that he would take a % if he recoups it. But we never signed anything agreeing to it. My concern if that we still have to deal with him in the next year and I dont want to have bad blood.

Sorry I didn't see that you replied till after I hit the reply button.

What you do mean "if he recoups it"? When a OC/CA/LF receives a bk petition they are required to go back to the court the judgement was issued and submit a release of garnishment. That release is then mailed to your employer who then must return any withholdings after your petition date and stop all garnishments going forward. What is your lawyer recouping? All the work is done by OC/CA/LF, the courts and your employer - he doesn't have to do anything therefor isn't entitled to any of the funds.

[1mquestion]

Sorry I was not so clear. This is for the money garnished for the 90 days before we filed. We already got the check back for any money post filing.

My lawyer already has the check in hand from the garnishing law firm. I know that we stated it as an exempt on our petition. And since we got the discharge just yesterday, I am fairly confident that the trustee is not going after it. However, I will not spend it or consider spending it until I see the papers from the trustee in the mail.
Anyway, my main concern is getting the check from my lawyer. He is asking for 1/3 of this check and wants me to sign the check over to him and he will issue a check for 2/3 of the money. I feel uncomfortable signing the check over.

I looked at the paper we signed and it is a “bk retainer agreement.” It says nothing about recouping money or percentages.

What I do remember is his legal aid mentioned that he will take a portion of these wages if he recoups them (he wrote a letter and called them). He latter mentioned it outside of the court building after our 341 hearing. They both presented it to us as a normal thing and at the time we took them at their word.
Since I still have to deal with him in the coming year, with address change and a dead release, I don’t want to make trouble. Should I offer 25 % not 33%?

Thank you for any advice.

[1mquestion]

He told me before hand that he would take some of this money. But now I come to find this is not normal. I am trying to figure how to thread as I do not want to anger or alienate my lawyer. I may still need his services on a deed release and moving.

[LadyInTheRed]

The retrieval of the garnished funds probably was not part of the fee for filing the bankruptcy. It's not surprising that he would charge extra and that he would charge on a contingency basis (i.e., you pay him a percentage of whatever he recovers). 33% is a standard contingency fee. What is surprising to me is that he would not put the contingency fee agreement in writing. But, depending on your state law regarding verbal contracts for attorney fees, you may have entered into a binding verbal agreement if you agreed to the fee when he discussed it with you.

[LadyInTheRed]

I looked up the Minnesota Rules of Professional Conduct. It does look like a contingency fee agreement must be in writing.

Rule 1.5(c):

A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

Check your fee agreement and make sure there isn't anything in there that covers the work to recover this money.

ETA: Even if you can legally get out of paying the fee, not paying could hurt your relationship with your attorney. It really depends on whether he's a big enough person to realize that it's his own fault he didn't put the fee agreement in writing.

[newbie2]

I have a different take on this...the OP knew about the fee arrangement and his/her attorney did the work that got the garnishment back for the OP. Even though the attorney forgot to put the fee arrangement in writing, I would still pay the attorney as I feel he earned it.

[DesdemonaB]

Now I understand, funds are abandoned by the trustee there for not part of the estate but not refunded directly back to you. So your lawyer pursued the OC law firm for the refund, therefor did a service and expects to be paid.

As for fee arrangements I personally would try "I am sorry can you explain the fee structure again, I can't seem to find it in our agreement" first, then ask for 25% - it never hurts to ask.

He did the work, he got the funds back, and you need his services for your deed release - how much are we talking here - hundreds or thousands? Is X amount of money worth hassle? Don't forget right now he's holding on to the full refund so right now he has 100% of you money and you have zero.

Good Luck

[LadyInTheRed]

I have a different take on this...the OP knew about the fee arrangement and his/her attorney did the work that got the garnishment back for the OP. Even though the attorney forgot to put the fee arrangement in writing, I would still pay the attorney as I feel he earned it.

I actually agree with you. I would pay the guy his fee. But, if the OP wants to push the attorney, the attorney should take some responsibility. The rule requiring the agreement be in writing is in place to protect the clients who are usually in an inferior negotiting position than the attorney. It is easy for an attorney to follow the rules and they should follow them. What is unclear is whether the OP knew what % the attorney would take. A compromised fee might be a good way to go. But, I bet it's not enough money to bother fighting over or risk straining the relationship over.

[1mquestion]

Thank you all for your replies and input. We came to an agreement today.

I felt the same as many of you do. He informed us that he would take a portion but was not clear on the amount. Even if it was not in writing!

However, since he was not clear on the % from the beginning we felt that we had a right to discuss it. We felt that 25% was fair due to the check amount and work involved and the lawyer agreed.

We have paid the lawyer and recovered our check. I think the relationship is still good and we will continue to use his services.

[luckstyl]

I have not heard of someone getting back wages that were garnished prior to the filing bankruptcy. is this common? I plan on filing this year and I would love to be able to recoup 90 days worth of garnished wages.

[1mquestion]

In our case we were able to claim the money as exempt. You will need to speak with your lawyer about your specific case. There is a limit on what you can exempt in each category. Also, you can’t recover or spend the money until near your discharge date and after your case is closed respectively. Also, we did a chapter 7. I am not sure if the other chapters offer the same thing. Good luck.