Central District Consumer Bankruptcy Attorney's Association

Elmer:
I have and eighteen I am letting be dismissed. The debtors make over 200k a year and are giving up the house, so they can pay. I'll probably have to refile another 11, however, as the debt too high for a 13. There will be a foreclosed out junior.
I'll send the case tomorrow, when I'm back in the office.
On the retainer discharge issue, the retainer of an attorney is a trap in a bankruptcy, as the attorney is bound by the retainer, but the debtor is not. As a result, if any postfiling work is to be done in a seven, I require another retainer and consider the first one discharged, not as to me and my responsibilities, but as to the debtor.
dennis
btw, I asked two weeks ago if the Irs is still taking the position it can oppose the reopening of a bk to determine the dischargeability of debts because the debtor can pay and sue in district court for a refund. Do you know the recent cases? The case is a referral from another atty who let the case get discharged without a 523 complaint.

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Some arguments regarding whether the means test applies in a Chapter 18 has come across my desk. A lot of attorneys are assuming that the means test doesn't apply in a 11 followed by a 7. If anyone is aware of UST objections being filed in either a Chapter 18 or 20 case, please post the case number so I can take a look at the pleadings.
I'm not sure that I understand the reference to the first retainer agreement being "discharged" unless that's a reference not to a bankruptcy discharge but to a "satisfaction" of the terms of the original discharge agreement. A bankruptcy discharge doesn't as such discharge the obligations of the bankrupt's attorney to the client. The idea of expressly limiting the scope of duties is certainly a good idea, to the extent that judges and laws allow that.
The idea of putting in the retainer agreement that you're not indemnifying against every ridiculous response that someone might make is highly desirable. I usually put a provision in which says something like "I am not obligated to defend you if you follow my advice and in response some taxing agency opposes you." It's not unusual for a bankruptcy attorney to tell a client that his taxes are discharged and then the IRS or the FTB says they are not discharged and the client sues the attorney and then I get the call from the malpractice carrier to prove that the attorney was correct.
You have to tell clients that you're not obligated to defend against every silly opposition which someone files. In one of my cases the US Tax Court had some unkind words about both the IRS and the IRS Appeals Office regarding how they dealt with a bankruptcy discharge of tax liability, which was to ignore it. That was written up in a recent issue of Tax News & Views in the CBJ.
Taxes are particularly troublesome because the tax collector may wait 5 or more years before raising an issue. I've seen collection activities by the SBE commenced twelve years after a case. You say in response in the case of the IRS that there is a ten year statute. That's not quite correct although that's generally what happens. But The California Gestapo Agents have taken the position that it has no statute of limitations on collection. In one famous case it was even discovered rummaging around in a taxpayer's garbage in Nevada looking for evidence. In one of my cases the EDD withdrew a million dollar claim rather than turn over in a bankruptcy adversary proceeding its internal manual on how agents are instructed to ignore bankruptcy court proceedings.

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Its actually much easier (although a little more expense) and more benefitcial to the debtor (2 years savings onfuture discharge)to prosecute the hardship discharge motion and avoid the problem with the OUST.

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JL
the ust will simply write a means test for you, and much like the IRS, will not give your client all of the deductions you would give the client. This "substitute" means test will be used against your client in a ust mtd.
If you want to control your clients destiny, as much as you can as the ust can also attack your means test, you file one, even though you are not "required" to do so.
I often exclude any UST response from my original retainer, no, I don't mean leave it out, I mean the retainer explicitly says any response to UST inquiries will be a separate charge. Then, when you get a UST inquiry, send the client an email and a snail mail, then call, and tell them to come in and pay you more money and sign a second retainer. Your first retainer will be discharged, so a second postfiling retainer should be signed. There is no reason for you to let this profit slip by. There is also no reason to charge every client for a UST reply when you don't need to, so taking a lower initial retainer and making a second charge is in the long run, cheaper for all of your clients.
Keep in mind you are papering the UST file so they do not attack your client. The UST needs something to rely upon to NOT file a 707b motion.
dennis

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