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Consulting a PC in a chapter 13 case filed by another attorney
Dear listmates,
Prospective Client (PC) is in a chapter 13 bankruptcy case. PC has lost
faith in his chapter 13 lawyer and wants to get a second opinion for
deciding whether to continue in chapter 13, convert to another chapter (7
or 11), or dismiss and refile another chapter (7 or 11).
FRBP 2016(a) provides:
"An entity seeking interim or final compensation for services, or
reimbursement of necessary expenses, from the estate shall file an
application setting forth a detailed statement of (1) the services
rendered, time expended and expenses incurred, and (2) the amounts
requested."
If the new attorney is consulting about the dismissing the case and
refiling, a fee application (required by FRBP 2016) would not be a suitably
timely remedy. Also the new attorney should not provide any services "on
credit" because any delay in payment occurring 90 days before filing the
next case would result in a preference.
It seems to follow that if this PC with a current 13 case comes in for a
consultation, the new attorney must get paid upfront from sources outside
of the bankruptcy estate, such as a friend or a relative.
Please let me know if you agree, and if you have additional thoughts about
the situation.
Alik Segal
Alik.Segal@gmail.com
310-362-6157
California Central District
Dear listmates,
Prospective
Client (PC) is in a chapter 13 bankruptcy case.
PC has lost faith in his chapter 13 lawyer and wants to get a second
opinion for deciding whether to continue in chapter 13, convert to another
chapter (7 or 11), or dismiss and refile another chapter (7 or 11).
FRBP 2016(a)
provides:
“An entity seeking interim or final compensation for services, or
reimbursement of necessary expenses, from the estate shall file an application
setting forth a detailed statement of (1) the services rendered, time expended
and expenses incurred, and (2) the amounts requested.”
If the new
attorney is consulting about the dismissing the case and refiling, a fee
application (required by FRBP 2016) would not be a suitably timely remedy. Also the new attorney should not provide any
services “on credit” because any delay in payment occurring 90 days before
filing the next case would result in a preference.
It seems to
follow that if this PC with a current 13 case comes in for a consultation, the new attorney must get
paid upfront from sources outside of the bankruptcy estate, such as a friend or
a relative.
Please let me know if you agree, and if you have additional thoughts about the situation.
-- Alik SegalAlik.Segal@gmail.com310-362-6157California Central District
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