The Duties Of A Bankruptcy Attorney

Under Code § 526(c)(2), the debtor was entitled to an award of $20,000 in emotional distress damages for her attorney’s negligence in assuring her that her $150,000 debt to her former husband arising out of state court marital dissolution proceedings would be discharged in her Chapter 7 bankruptcy case. Code § 526(a)(3)(B) provides that a debt relief agency shall not misrepresent to any assisted person the benefits and risks that may result if the person becomes a debtor in bankruptcy, and here the attorney repeatedly misrepresented the law to the debtor, even after the issue had been raised by other counsel. He masked with false assurances his very disturbing lack of knowledge of bankruptcy law and his lack of diligence in researching an issue he knew to be of great importance to his client. His conduct resulted in the worst possible effect on the debtor’s mental health when she finally learned the truth. In re Dove, 2016 WL 3003638 (Bankr. N.D. Cal., May 17, 2016)

Does the average person expect much of their Bankruptcy attorney?  I thought that the era of the “$0 down”, and “no fee over $699.00” was gone, but after most of the attorneys who proliferated under this scheme in the last 10 years have either died, been disbarred, or have moved on to other states, there apparently was a void.  Most areas of practice involve an hourly fee, or a contingent fee, based upon the expectation of a future generous recovery. Since the practice of bankruptcy is not based upon contingency (no recovery here, especially by the creditors!), it has to be based upon an attorney’s hourly efforts.  Most seasoned attorneys charge anywhere from $250 to $400 per hour. If an attorney is charging you $600, $700, or $800 per case, it follows that they are spending less than two hours working on your case! Doesn’t that make you feel like they are either not devoting time to you, or letting their non-lawyer staff (some of which only have a high school education, I assure you) work your case, with just a quick review and nod in your direction?  In that event, since the staff makes $18 per hour or less, you should only be paying $200-300!  I would demand a refund! You don’t want results like the case above!