Author Archives: San Francisco Bankruptcy Attorney

Can I Fire My Bankruptcy Attorney?

By Jeff Curl, San Francisco Bankruptcy Attorney

Yes, you can fire your bankruptcy attorney. I can only speak to California law since this is where I am licensed. Here, clients can fire attorneys at any time, for any reason. Attorneys must show “cause” for firing clients, such as non-cooperation, or refusal to pay bills, though there are exceptions, and exceptions to the exceptions that we need not get into.

I’ve experienced a steady uptick the last two years or so of taking over bankruptcy cases that have been mishandled by attorneys. This is not to suggest that I am claiming perfection or superiority. As one judge told me at a hearing on a case I took over with some complications, we can all look back with 20-20 hindsight and pick apart each bankruptcy filing and strategy behind certain decisions.

How to fire your bankruptcy attorney

Be firm, but civil. Re-read your attorney-client contract first. The attorney may be entitled to keep part or all of the retainer you paid for opening the file and performing work. Demand in writing an immediate refund of whatever funds you are entitled to. Do it in a manner that is traceable, such as certified mail or by fax (better yet, both). Also, ask for a copy of your file, including electronic copies of any relevant documents which can include a draft of your bankruptcy petition.

Every law firm is different. Some still use lots of paper, some are almost entirely paperless like our firm. There are a handful of bankruptcy preparation software companies. For example, we use Best Case, the most popular software. We have taken over cases where the prior attorney used Best Case as well. Sometimes that can provide us a head start. Sometimes the preparation was so bad, it’s easier to just start over. But ask for everything you can so your next attorney can get a handle on what has happened.

The three types of bankruptcy attorney mistakes I see

The mistakes I see generally appear in three forms: (1) the attorney was inexperienced with handling the issues particular to that case; (2) the high volume attorney that chronically mishandles cases from lack of communication at the outset to sloppy preparation of the bankruptcy schedules and forms throughout the case, and; (3) highly complex matters where a particular strategy or set of decisions created negative and unintended consequences.

The inexperienced attorney

As far as inexperience with a particular issue, this problem exists for the freshly minted first-year attorney, the thirty-year veteran, and everyone in between. Certainly, it exists more for the inexperienced practitioner who just has not had the opportunity to see many scenarios. But I was recently involved in a case with a fairly experienced bankruptcy attorney that made the mistake of not keeping up with amendments to the bankruptcy laws, and he advised his client that a certain debt was dischargeable. It was not. This was one of the few cases where I represented a creditor, and I filed a complaint to determine that the debt was nondischargeable and prevailed. That bankruptcy attorney is now facing an aggressive malpractice claim, among other issues.

It’s okay to ask your prospective attorney how much experience he or she has with your particular scenario, and bankruptcy cases as a whole. Unfortunately, this is not fool-proof, because this attorney advised the client incorrectly, and she had no reason - as far as I could tell - to doubt his advice.

The volume attorney

The high volume sloppy attorney causes the most problems by the sheer amount of cases this attorney handles. Some attorneys market aggressively and are able to file a high number of cases because their website ranks high, or they use referral services that funnel clients to them. If these attorneys put half the effort in becoming a good attorney that they do in landing the client, they might actually be competent. Make no mistake about it, some high volume filers do good work, but many don’t.

Refugee clients that come from these attorneys often describe feeling uncomfortable at the outset. The first meeting often does not feel like a legal counseling and information gathering session, but more like a sales job; I also often hear clients describe dirty offices. Go with your gut. If you feel that you are not entirely comfortable with the attorney and staff, get out of there. Filing bankruptcy is too important legally, personally and financially to entrust it to someone you don’t trust yourself.

The complex cases

I have clients show-up constantly with all kinds of complex issues: litigation, potential criminal problems, property and divorce disputes, fights over rights to a business, transfers of assets - endless scenarios. It’s okay to ask the attorney if they have experience with whatever issue you are facing. You may present a situation that no attorney has ever encountered; as much as people want to believe that bankruptcy is filling out a bunch of forms, rinse and repeat, it’s not. That’s why there are thousands of court decisions issued each year deciding bankruptcy disputes, some never seen before.

You should appreciate it when the attorney says “I don’t know” to a question you ask, if your question is novel in some way or beyond that attorney’s knowledge. Too often, attorneys who want to be problem solvers and client pleasers, answer something they should not. Obviously, if you ask the attorney to explain the basics of a Chapter 7 bankruptcy, and he says, “no idea,” run away; run away fast.

This is another one where you trust your gut, backed by some cool reasoning. Some clients present me with issues where I do not know the answer. For example, one client had serious white collar crime and tax evasion issues. I know something about this, but that is a highly specialized area with potentially life-changing consequences. I referred that out to another attorney who was an expert. Another was a business case some years back that involved potential fraudulent transfer of assets, successor liability and other complications within the bankruptcy context. Some of it was new to me, some of it not. The key was telling the client I was comfortable with the strategy on some parts, but uncertain as to other parts. The client said he trusted me to figure it out, I got smart on the issues, researching and consulting with colleagues and that case concluded with the client riding off in the sunset with a smile on his face.

If presenting a messy scenario to a new attorney, accept the fact that many attorneys may actually not be a good fit or may not want to get involved or may not know the answer. But there are a handful of good attorneys that can take complicated matters, and lead you to a solution.

Are you part of the problem?

If the attorney-client relationship has deteriorated to the point you want new counsel, ask yourself what your current attorney would say about it. I see clients come in and announce that the existing attorney is awful. Sometimes that is true. Sometimes the client is just a terrible client: hostile, uncooperative, deceptive or other qualities that make representing the client difficult, if not impossible. You have to be dead honest, and imagine me calling the attorney to talk about the case. What would that attorney tell me about you and your case?

What do you do now?

If you are actively seeking new counsel because an existing case is presenting you with difficulties that you believe are attributable to your attorney, I would recommend three things, in this order: (1) make an honest appraisal about whether it is the attorney’s fault, or whether you have contributed to the difficulties; (2) if firing your bankruptcy attorney is necessary, demand turnover of your file and monies owed to you, in writing that can be proved at a later date, and; (3) be honest with your next attorney to a fault, and don’t be afraid to walk away if the attorney is not a good fit.

Estate Planning for “Normal” People

By Kimberley Spears

How many times have you heard someone say they don’t have an estate that’s big enough to plan for? Maybe you’ve said this yourself! Many people believe that estate planning is only for the very wealthy. But in California, one of the most important goals of estate planning is staying out of probate, and that affects most of us, not just the super-rich.

If a person dies and leaves non-retirement assets to someone other than their spouse (like their children, for instance), and if those assets are worth more in fair market value than $150,000, then that estate is required to go through the slow and expensive court process call probate.

The fees you pay to probate an estate are also based on the fair market value of the assets. These can add up very quickly, especially if you own real estate in the Bay Area. As an example, if your home is worth $1 million (even if the bank owns most of it), the minimum probate fees will be $23,000—and that number can be doubled to pay the Executor. You can look at the Probate Fee Schedule to estimate how much it would cost to take your estate through probate. Most people would much rather give this money to the people or causes they love—not to the Probate Court or probate lawyers.

Avoiding probate is simple. Just create a living trust and put your assets in it. Most people work with a lawyer to create their trust, and the best lawyers also help their clients put their assets safely into the trust as part of the estate planning process. The fees to create a trust are a small fraction of what the estate would pay in probate fees, and many lawyers offer estate plans for flat fees.

And, if you have young children, there are additional benefits to estate planning, like nominating guardians for your kids, and making sure money is managed well for them until they are truly old enough to handle it on their own.

Estate planning is really for everyone—especially in California. Often just getting motivated to schedule the first appointment is the most difficult part of the estate planning process, but once you take that step, you’ll find you’re well on your way to having an estate plan that will serve your family well.

For more information on estate planning, see the Family Wise Estate Planning Probate Fee Schedule.

Kimberley Spears has been practicing trusts and estates law exclusively for 10 years. She graduated from Boalt Hall School of Law at the University of California, Berkeley. At Boalt, she won the Moot Court Writing Award, the Prosser Award, and she served as Articles Editor for the Berkeley Technology Law Journal. She has a B.A. in English from the University of California, Irvine, where she graduated cum laude, Junior Phi Beta Kappa. Kimberly can be reached at 415-606-1384, and through her website.

Image via Creative Commons

Clean-Up on Aisles Seven and Thirteen: Choosing the Right San Francisco Bankruptcy Attorney

By Jeff Curl, San Francisco Bankruptcy Attorney

The amount of people filing bankruptcy continues to decline. Bankruptcy filings for the 12-month period ending June 30, 2013, fell 12 percent when compared to bankruptcy filings for the 12-month period ending June 30, 2012, according to statistics released by the Administrative Office of the U.S. Courts. This drop seems to have a commensurate counterpart: an increase in problem cases.

In discussing the state of affairs in the San Francisco bankruptcy lawyer world with some colleagues, there seems to be a consensus that while the number of filings has decreased, the complexity of most Chapter 7 and Chapter 13 cases has increased; at least that’s the sense concerning San Francisco bankruptcies. Unfortunately a noticeable portion of our recent complex cases involve taking over bankruptcies that have gone badly because someone attempted to file without an attorney or because even though the client made the right decision to hire counsel, the attorney made errors.

It is rewarding to help clients out of these difficult situations. Though not all parts of the rescue are enjoyable. Sometimes we can’t repair everything. And sometimes we have to go after the previous attorney and disgorge the fees paid by the client who was victimized by an incompetent attorney.

How does someone who is filing, and already stressed avoid these further stresses? First, do not file without an attorney. Bankruptcy is too complex, and even highly educated attorneys can make errors trying to navigate the ever-changing labyrinth of the bankruptcy world. Yes, attorneys make mistakes so it is no guarantee that everything will be flawless, but your chances of success are far, far greater with competent counsel.

Choosing the Right San Francisco Bankruptcy Attorney

(1) Trust your gut.

If you sense that you may have a difficult time working with the attorney or just don’t like them, follow that instinct. There is no reason to enter into a relationship because you feel pressured or for any other bad reason. You’re already stressed out, so don’t add to it by paying someone you don’t trust.

(2) What areas of law does the attorney practice?

If the attorney list eight areas of practice, and bankruptcy is one of these, it causes me concern. There may be complementary practice areas such as family law or business law that make sense. But when an attorney is trying to be all things to all people, I am concerned about how well he or she has mastered bankruptcy law.

(3) Ask about experience.

It’s okay to ask how long the attorney has practiced or how many cases he or she has handled.

(4) Referral from trusted source.

If someone worked with this attorney and liked the experience, nothing beats a warm body referral. Similarly, a trusted professional that knows the attorney is better than guessing.

You can also read this article posted at Fox Business about choosing an attorney, that includes advice from our own Jeena Cho. If you are contemplating filing bankruptcy, get an attorney, and choose wisely.

Photo courtesy of Kenny Louie.

Turns out, Bank of America WAS lying | Why Your Loan Modification was Denied

By: Jeena Cho

Loan Modification Process - The Application

This week, we learned that Bank of America was systematically denying loan modifications to homeowners by lying to them. Read the full story [NPR, Salon.com, ProPublica, NBC].

If you have ever applied for a loan modification, you know how frustrating it can be. First, you call the bank to get an application. Instead of the bank emailing the application, you have to wait for it to be mailed to you. (Because, none of the bank employees supposedly have email). Once you get the application, you have to complete it, compile a massive amount of documents, write a hardship letter and either mail or fax it back to the bank. You call the bank, and to your surprise, they never received your loan mod application. So, you start all over again and re-send the application. If you’re lucky, you’ll receive a letter acknowledging the application.

Loan mod application? What application?

Another few weeks go by and you receive another letter stating it either didn’t receive a piece of information (you already sent), or that it needs additional information. Every time you call the bank, you speak with a different agent and each agent tells you something completely different than the last. None of the agents of course have a direct number or an email so you can never reach the same person twice.

What do you mean? You didn’t get my application?

Frequently, my clients complain that the banks are out to drive them crazy. After years of hearing the same complaint, I suspected that my clients were right. The banks were deliberately stalling. Well, this week, we find out that at least one bank, Bank of America was doing exactly that.

You must be lying.

In a declaration filed by Simone Gordon, former employee of Bank of America as Senior Collector of Loss Mitigation/ Mortgage states:

“We were told to lie to customers and claim that Bank of America had not received documents it had requested, and that it had not received trial payments (when in fact it had). We were told that admitting that the Bank received documents would “open a can of worms” since the Bank was required to underwrite the loan modification within 30 days of receiving those documents, and it did not have sufficient underwriting staff to complete the underwriting in that time.”

Even more damning, she goes onto say:

“We were regularly drilled that it was our job to maximize fees for the Bank by fostering and extending delay of the HAMP modification process by any means we could - this included by lying to customers.”

Lie and get rewarded. Or get fired.

Like all good employers, Bank of America used both carrots and sticks to encourage this behavior. Bank employees were rewarded with a $500 bonus if s/he placed ten or more accounts into foreclosure in a given month. “Employees who were caught admitting that Bank of America had received financial documents or that the borrower was actually entitled to a permanent loan modifications were disciplined and often terminated without warning.” said Gordon.

[Download the entire Simone Gordon declaration here.]

Going Up! Chapter 13 debt limits and exemptions

By: Jeff Curl

Numbers are going up in bankruptcy, in a good way.

Chapter 13 Debt Limits

Chapter 13 imposes a maximum amount of debt you are permitted to have on the date of filing. Every three years the debts limits for filing Chapter 13 increase on April 1. The new numbers for the 2013 adjustment:
Unsecured debt: $383,175
Secured debt: $1,149,525

This adjustment is a welcome increase, particularly for those in the Bay Area. A one million dollar mortgage is just not that uncommon around here, so the increase is not only welcome, but needed. In fact, I have a client with $373,000 in debt who is not eligible for Chapter 13 bankruptcy, but will be in a couple of weeks thanks to this increase.

Exemptions

The beginning of 2013 saw another increase that has already taken place: exemptions. Exemptions allow someone to protect and keep a certain amount of property in bankruptcy.

The most flexible and commonly used exemption — the wildcard — increased to $24,060. The wildcard can be used on item, or divided to cover many. Have $10,000 in your bank account and want to keep it? You can. And you can use that other $14,060 to protect other things as well. Other exemptions were increased as well, and we as bankruptcy attorneys are in a better position to protect our clients’ interests.

Number increasing in bankruptcy is sometimes a good thing.

Photo courtesy of Intamin10