Law Offices of David Clough P.C.
Areas of Practice
Available for matters in Cook, Dupage, and Will Counties
Established in 2001
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"How did you go bankrupt?" "Two ways. Gradually, 
then suddenly.
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February 2015

I successfully wrapped up a disputed bankruptcy matter last month. I was not the original attorney on the matter. In fact, the original attorney caused many of the problems I inherited.


But first, a little background. The client, an Hispanic female with limited English skills, went to one of those low-cost billboard advertising bankruptcy attorneys. This attorney's approach to bankruptcy reminded me of the old Earl Scheib car TV commercials. He would do any bankruptcy, at any time, for one low, low price.


To be fair, this attorney did do a Chapter 7 bankruptcy for this person. The problem was, he did not do a thorough job, and it caught up to my client a full two years after discharge.


In bankruptcy parlance, a Chapter 7 is a liquidation bankruptcy designed to wipe out general unsecured debts such as credit cards and medical bills. To qualify for Chapter 7 bankruptcy, one must have little or no disposable income. Needless to say, one must be truthful in listing their debts and sources of income to the court and trustee.


The main issue I became aware of, and why I was eventually asked to join the case, was one of misinformation. My client was embroiled in a rather sticky labor suit that had progressed from a county dispute to a Federal matter. This dispute was many years in the making and it was one of the reasons my client had to declare bankruptcy; the cost of prosecuting this suit drained her of most of her cash.


The dispute was still going on when my client decided to turn to bankruptcy. The attorney handling the bankruptcy knew or should have known that the suit was an ongoing concern. Yet, he did not tell the bankruptcy court about it. Perhaps he thought that if the bankruptcy court was not advised of the potential windfall, the odds were very high that they would never know, and that any monies gained from that suit would be the client's alone.


Unfortunately (or fortunately), the attorney handling the Federal labor suit did contact the trustee telling him that the client was in line to gather a windfall amount, and what should be done with the proceeds of the suit. Once the trustee found out about the Federal suit, he reopened the bankruptcy case, and claimed my client withheld information from him regarding her finances.


The original bankruptcy attorney that prepared the filings for my client was also notified of the reopening. Sensing a possible conflict between the client and himself, he asked to be excused from representing the client. After a fairly lengthy hearing, the attorney was excused from representing anyone else but himself. The client was told she was in fairly hot water, and it was best to seek another attorney to represent her interests. She told the court she had no money and could not afford another attorney, could the court appoint someone for her?


This is where I entered the picture. The court called my office, asking if I could represent the person pro bono. After talking a bit about the case, my interest was piqued, and I said sure.


As an aside, it's usually in the best interests of the attorney that when the court asks you for a favor, you do your best to comply. Judges and court personnel have long memories and might remember that you refused to assist them when they asked for your help with a totally new, unrelated case pending before them. 


To make a long story shorter, I entered the case, and made many motions (asking the court for permission to do something; also known as "motion practice"), among them to amend certain items that were missing/misstated from the original bankruptcy petition. My client and I were extremely thorough in going over each and every item that was listed in the petition, correcting those items that were irrelevant, adding items that were missing, and deleting items that had no basis in fact. The result: We were able to reduce the fines the trustee was seeking to a miniscule amount. In addition, my client is still considering a malpractice claim against her original bankruptcy attorney.


What's the takeaway from this story? First, always be honest with your attorney. They have a duty to keep things confidential. Second, if you're not sure about anything that might be relevant to your case, tell your attorney and let him or her decide. Third, trust but verify. Make sure that what the attorney wrote in your name is truly what you said. And, lastly, if you have any questions whatsoever, make sure they are answered to your satisfaction.


Please call or email me if you have a need for legal assistance, and let your family, friends and colleagues know I am available as well. Thank you.

Law Offices of David Clough P.C. | 312-849-3000 | [email protected] |
55 West Monroe, Suite 3950, Chicago, IL 60603