Collection Attorney have valid lien on a pre-bk asset?

[ColoFiler]

Our Chap 7 Bankruptcy was discharged in June 2010.

In Feb 2008 we had hired a collection attorney (under a contingency agreement) to attempt to collect funds we had invested with a private “investment company”. In May of 2008 the SEC stepped-in and began prosecution of this as a Ponzi Scheme and all the “assets” were turned over to a Court appointed receiver.

When I filed our pro-se Chap 7 in March 2010, I listed the case under “suits…administrative proceedings” with an expectation of no financial return. I did NOT list the collection attorney as a creditor or show his “lien”.

At our hearing the Bankruptcy Judge said that we would probably never see a dime and accepted as filed.

Now, 5 years after the collection agreement, it appears there may be some small distribution and the collection attorney is petitioning the Court's Receiver for his 33% lien.

My question is: since the SEC court case WAS listed in the filing, would any lien attached to it be discharged - even though I did not specifically list the collection attorney as a creditor?

Any thoughts would be appreciated. Thanks

[GoingDown]

Out of curiosity, why didn't you list them as a creditor when you were doing it in the first place?

If I ever file BK pro se, I am going to list every one of creditors, junk debt buyers, etc., etc., to make sure I don't leave anyone out.

[ColoFiler]

Clearly, you should list everything you are aware of. We did not know this scum bag would come back 4+ years later with the threat of a lien that had not been disclosed.
We had a Contingent Contract with this "collection attorney". Meaning, he got paid ONLY if he was successful at recovery. He was NOT successful because the SEC prohibited him from further action when they took over. Now he is claiming that his contingency contract had a lien provision even though it wasn't mentioned in the contract.

We are hoping the SEC attorney's will shoot him down. But I am just looking for opinions about whether a lien on a "listed asset" is covered by the discharge.

[tobee43]

if the trustee felt at the time of your filing the amount you were going to be rec'ing was substantial enough, special council wold have been assigned to your case. they didn't so apparently the trustee felt there wasn't enough asset there to be interested in it and closed your case.

if you case wasn't closed i would say there would be something to be concerned about if there ends up being a distribution of any of these funds. but if the trustee has abandonment the assets and there are no distributions in the case, the court chose to forgo any benefit from that case as well as any costs associated with the case.

unless i have read this incorrect, you did, indeed list this suit, win or lose. although, my thoughts are, if you entered into an agreement with this collection atty and do/did get monies it may be a "legal" fine line as to whether he's entitled to his percentage, however as you pointed out this was a contingency, but how he's now claiming it had a lien provision this is really interesting but it is possible. (some are written like that for to protect their interest no matter what the result, in case there is a payout at a later date).

the interesting point here is the discharge and close of the case. one would think that atty would have fought to have the case pulled into an asset case and kept opened so the cookie jar lid was still open and serving cookies. that fact that it is closed may hopefully be in your favor. hopefully des or hhm one of our forum attys can chime in on this and give you a "straight" answer.