Does your attorney do this??

[WantToBeDebtFre]

I'm talking to an attorney about filing bankruptcy. We've been talking back and forth in e-mails and I sent him an e-mail asking him what his fees were.

His response was that his fee is usually $1200 - $1500 for Chap 7 and he wants half up front. After discharge he'll try to find discharge violations on my credit report. He'll also want me to make as many requests for credit as possible and collect letters of denial & high interest rates. Then, he'll re-open my case try to obtain damages and attorney fees which he'll split 50/50 with me. He said this will cover the other half of my bankrupcty fee many times over.

I was wondering if anyone else has heard of this or had any first hand experience. I'm not really sure what to think about it.

[HHM]

Haven't heard that approach.

Most attorney's want the "entire" fee paid up front in a chapter 7 (the obvious reason being is that if you don't pay up front, the fee you still owe is a debt and gets discharged in the chapter 7).

The credit reporting violations is interesting, most BK attorney's focus on BK's and let the debtor deal with the credit report. So, if the attorney really will handle the credit issue, that is added value to you.

However, having you request credit and getting denials is a new one to me. I am not sure what cause of action he would be making exactly. So in that respect, I am not sure what to tell you.

[BassBoy]

I'd be extremely skeptical of any lawyer that would have you attempt to obtain credit for the sole purpose of attempting to obtain damages after the denials and high interest rates. IMO, this is very unethical and I would take NO PART in it. Besides, a suit may only be filed if there is proof of "discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives income from a public assistance program."

Be honest with your BK and you'll end up in better shape in the end.

[Nowwhatohio]

He would try and say the denials of credit were because of the incorrect information on your credit report but having a bankruptcy reported on your credit will do enough damage to warrant denial of credit (meaning you won't be able to prove being damaged). It's a lame attempt to show damages but it will not be a winning case. Award of statutory damages in FCRA cases is $1000 per violation (assuming you can prove actual damages). It's a Federal case and could end up costing you 10's of $1000's of dollars in attorney fees, which you usually have to pay up front.

This attorney sounds like he should be reported to your state bar association.

[BassBoy]

He would try and say the denials of credit were because of the incorrect information on your credit report but having a bankruptcy reported on your credit will do enough damage to warrant denial of credit (meaning you won't be able to prove being damaged). It's a lame attempt to show damages but it will not be a winning case. This attorney sounds like he should be reported to your state bar association.

Incorrect information may get a credit/loan denial, but any common sense person should know enough to get the information corrected and then have the lender re-evaluate the application. It should be that simple. And I know the lender will re-evaluate the application because when my wife and I went to purchase our first home, we were denied the mortgage because they said we already owned property and had a mortgage, car payment and a CC. Well, that was a huge mistake because when my wife's name changed after we were married, her and my Mother had the same first, middle and last name....so.....they pulled my Mother's credit report by mistake. Anyways, my point is that when there is a mistake, and it is corrected, the lender will re-evaluate the application.

[Nowwhatohio]

Incorrect information may get a credit/loan denial, but any common sense person should know enough to get the information corrected

That's right, and I'm pretty sure you have to go through the normal process of disputing items on your credit report before making a Federal case out of it.

And all the while the furnisher of information simply has to correct the information which will take the steam out of your "case"

[WantToBeDebtFre]

I thought it all sounded wierd, too. I really don't WANT to apply for credit after my bankrupcty is over. Who wants to take the time to apply for tons of credit just to receive a bunch of denials anyway? I was planning on using this attorney because he has been really good about answering all my questions and responding to me promptly (I haven't paid him anything yet). Now I'm kind of skeptical...

[BassBoy]

You should be skeptical. No "good" lawyer would instruct you to do such acts.

You won't recieve a bunch of denials for credit/loans after your BK if you know which lenders you should apply with. There are a number of lenders that will grant you credit/loan. Obviously, the conventional lenders (i.e. National City Bank, Key Bank, Fifth Third Bank and those of the like) may be out of the question.