Monthly Archives: May 2017

Consumer Bankruptcy News – Michigan

Bankruptcy blame and fraud dominate this week’s

Consumer Bankruptcy News - Michigan
Consumer Bankruptcy News – Michigan

Consumer Bankruptcy lawyer News – Michigan.

Bankruptcy Lawyers Get Blamed – By The Judge

We get blamed by our clients all the time, but

getting blamed by the bankruptcy judge is much worse.

More fundamentally, the court is disappointed in Martell’s counsel for attempting to disallow a claim for trumped-up and technical reasons when the claim itself raises no substantial issues as to its validity and counsel knows that the small amount of the claim makes it uneconomic for the creditor to assert its rights. While some parts of the Bankruptcy Code may require rights to stand or fall on minor technicalities, claim allowance is not one of them. Rather, a debtor’s over-reliance on non-substantive objections to claims may be evidence of abuse of the bankruptcy process.
Gee, lawyers are supposed to be technical, and, zealous advocates for our clients.  I am sure it was news to this bankruptcy debtor attorney that “ claim allowance is not one of them”.  It is news to me.
Not the only bankruptcy lawyer misconduct this week.

Attorney’s Failure to Conduct Reasonable Investigation of Debtor’s Income & Expenses Led to Dismissal of Case & Sanctions against Lawyer

Now, this one I get.  Bankruptcy court is a federal court, with a duty on the attorney to reasonably investigate before filing a lawsuit, or a bankruptcy.

The bankruptcy system is like the income tax system, the integrity depends on accurate self reporting, whether on tax returns or bankruptcy schedules.

We bankruptcy lawyers have to get documentation on income and expenses, and assets and liabilities.

The trustee, or U. S. Trustee, has to file a motion to dismiss if someone is making too much money to be in a Chapter 7.  In this case, the Court found that reasonable investigation by the debtor attorney would have resulted in the case not being filed, and the trustee not incurring the costs of moving to dismiss the bankruptcy case.

Bankruptcy Lawyers Get Blamed – By The Debtor-Client

Ahh, the old-fashioned excuse still is used.  “My bankruptcy lawyer did that!

I told him about the house in the Bahamas and the gold bullion in the basement and the cash in the safety deposit box.”

Sure, it does happen, but are there less reliable folks than Cook County politicians?

A former chairman of the Illinois Prisoner Review Board is suing his onetime bankruptcy attorney for allegedly under-reporting his state salary and forging his signature on bankruptcy documents, which he said cost him his job with the board.

This debtor may have a point, as his lawyer was suspended from practice for filing inaccurate stuff.

Get an attorney who is reliable, preferably certified, and always read any legal papers you sign and keep copies made when you sign.

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