Experienced Massachusetts Personal Bankruptcy Attorney Reprimanded
The Federal Bankruptcy Court in Boston handed down a decision sharply criticizing an attorney with 28 years of experience for putting his two clients, an elderly widow and her disabled daughter, through duplicative bankruptcy proceedings and attempting to collect excessive fees for both. Judge Boroff stated that it had “particular dismay with respect to the type of conduct” of the attorney. Based on the Court’s decision, clients seeking personal bankruptcy attorneys in Boston need to be ever vigilant about the reasonableness of the recommendations by those attorneys.
The Court examined the Bankruptcy Petitions and determined that notwithstanding the Chapter 13 filings, the petitioners had simple, straight forward, Chapter 7 cases. Nevertheless, the attorney, in order to secure a fee, filed Chapter 13 petitions for the clients. The attorney’s proposed Chapter 13 Plans called for the debtors to pay $7,918 ($3,959.00 each), or 94% of all distributions to the attorney himself! There was nominal monies going to the creditors and the Chapter 13 Trustee found that it did “not appear to be in the Debtor’ best interest to be in a Chapter 13” proceeding.
The attorney argued that many clients cannot file Chapter 7 cases because the fees are required up front, and submitted affidavits of former clients stating that they were satisfied with their Chapter 13 plans. The Trustee found that the proposed plans submitted by the attorney were “merely thinly veiled Chapter 7 cases, thereby contravening the fundamental purpose of Chapter 13 – to permit a debtor to repay his or her debts over an extended period of time through future income.” The Court found that the “plans in the cases before the Court serve a singular purpose – to pay the professional fees of [the attorney because both] of the debtors was qualified to file a Chapter 7 case.” The Court found that “such filings have the inherent effect of placing the interests of the attorney above those of his client.”
The Court noted that not only were the debtors paying significant and unnecessary attorney fees, they were also delaying their discharge date by three (3) years. Further, the debtors were subjected to the risk of losing their discharge if they failed to make the regularly scheduled payments.