Bankruptcy Attorney Issues

[ColoradoBell]

I don't have the normal consumer debt bk issues. (Mine are from divorce and owing X and attorneys)
I've learned that most bk attorneys just want to do the 'simple'
consumer debt filings where they fill out the paperwork and send it in and collect the basic fee.

The ones I've spoken with so far have been very nice, but always say my case is 'compicated' (ie: more hassle for them) and they refer me to others (more cost to me).

It seems that no one knows the answers to the questions I pose about certan unsecured debt and what the bk trustee might do. I'm starting to panic as these debts are earning interest at 18% and I can t pay any off until my house sells.

[HHM]

Well you can't have the best of both worlds...you are probably talking to the wrong attorneys. If you want "real" BK attorneys, it will cost more. Bottom line.

However, if your plan is to sell the house and pay off the debt, why are focusing on BK (granted, you probably addressed this before)

[Mensa1]

It seems that no one knows the answers to the questions I pose about certan unsecured debt and what the bk trustee might do.

And what are those questions?

[ColoradoBell]

Hi HHH. Well, you'll probably be sorry that you asked, but here goes:
I
receive alimony until July and I've used that alimony to pay all my expenses and attorney fees in re a never-ending-divorce-from-hell from a wealthy man who can afford to litigate forever. I'm 62 and due to a heart condition will not be able to work after alimony stops and will have to live on $475/mo.SS until 66.5 and then I'll get just under $1000/mo. X was ordered to give me my retirement money in 2005, but refuses (he is Plan Administrator). So, I have to pay an attorney to sue in an unfriendly court to extend alimony and get the retirement money.

I live in a house (huge) I built for us in 1983. Divorce orders said that the house should be fixed up 'so as to maximize gain from sale' and sold and divided. I was to pay 100% of upkeep until it sold and 60% of repairs. X refused to allow repairs since 2003 and in 2008 the judge decided to appoint a Receiver of X's chosing and have him sell the house 'as is'. X assured the judge that the 'as is' value of the house was $1.5 mil (more than the 2003 'fixed up appraisal'.

The Receiver paid himself $50k and made 'emergency repairs' for $150k that were poorly done, if at all. X controlled the HELOC loan but I am court ordered to repay 60% of it. Much of that loan went into someone's pocket but not into the house. X's plan has always been to do whatever it takes to get me to buy out his share of house using my share of retirement. Until recently it was based on the 40% of $1.5mil appraisal. I couldn't afford it.

Then more shady stuff happened and in Jan, the Receiver said the house should be scrapped off the lot and was worth less than $500k. Then there was a not at arms length Buyer offering $645k. I said: ok if that's the case I will buy out X's share to avoid going bankrupt. (At $645k, my share would not have paid off my secured and unsecured debt 'due on sale' of home.) Offered
X 40% of $645k plus agreed to pay him for half of HELOC even tho that is not in my name plus any joint debt on house. He wanted $512k...I couldn't afford it. (Also said I couldn't sue him for more alimony) About $120k of secured debt is judgment liens to my attonrey who was paid the amount we agreed I owed him (25% by me with X paying 75%). 33k is judgment lien against me by X. These are earning interest at 18%.

The $645k contract was terminated by BUyer shortly after I told X I'd have to declare bankrputcy. The house was listed as 'pending' for two month after the termination (improper/illegal) and then the Receiver decided to sell it to the original Buyer for $600k instead AND with a contingency giving Buyer til November to sell his home, thus keeping the house off the market. The Realtor is telling others that the house has so much damage that they shouldn't show it PLUS that the contract was pending when it wasn't etc....again this is all to force me to comply with X's demands.

I'd hoped that BK would discharge the unsecured debt (to my X and some attonreys). I also hoped it might 'take over' the so far shady sale of the house in which case it would probably sell, as is, at a minimum of $1million.
But at $600k sale price, my share will barely cover the secured debt (which is also not 'real' in the sense the debt was fabricated, but I have to pay it anyway.)

Sigh.

I've contacted about 50 attorneys so far and when I tell them that my debt is due to a divorce and not the usual consumer debt....they refer me to others who then refer me to others and it gets pretty tiring. Also, I don't have funds to pay a huge amount PLUS I need to pay money to file for a modification of alimony and to file to get my retirment money. It's one of those lose/lose things that just keeps snowballing.
Since the house is my only asset awarded in the divorce (supposed to net me $500k minimum after all debt is paid)...if the $600k sale goes through, I'll have to declare BK to even save my homestead exemption which is half in jeopardy because since it attachess to the property and X is a part owner , he will try to claim half. Finally if you wonder why X is being so sucky, I have no idea...I gave him the divorce on paper without a property settlement in 2003 in exchange for his promise that we would do the prop settlement w/o lawyers or courts. As soon as my sig was on the paper, his lawyer filed for a trial date..knowing I'd have no money to hire an attorney and that X would get most of our assets, even tho I was the one who built most of those assests during our 25 year marriage.

So I'm hoping that BK might possibly stop the shady sale, the trustee might market the house for its real worth so as to get more money to pay creditors,
that my unsecured debt could be discharged and maybe even some of that unjust secured debt, and that I'd end up with my homestead exemption instead of nothing. It would even be cooler (but I'm sure impossible) to have the unsecured debt discharged in which case I could then afford to buy out Xs share of house and have a place to live in instead of being homeless.

[MSbklawyer]

No, you're not going to find an attorney willing to wade off into all that for the standard Chapter 7 fee of $1200 - $1500. The bankruptcy would be a fairly small part of this picture, if at all, since bankruptcy won't discharge a debt to a spouse incurred in connection with a divorce or separation.

[BKDefender]

ColoradoBell - That is a $5k-$10k case, not the usual $1200-$1500 'simple' bankruptcy case.
Are you in Colorado? If so, let me make some inquiries and see if there are any NACBA attorneys who might be able to help you.

--William

[ColoradoBell]

Thanks for your offer, BK Defender. I am in Colorado and I'd appreciate any referrals. Please PM me or I can send you my email address if its easier. There are a couple of BK attonreys listed in the phone book who also do family law, so that might be a fit.

MSBKLawyer: I've read a lot of case law in Colorado on the subject of divorce debt since the 2005 revision. Being dischargeable isn't writ in stone, and in this case we have an X making over $500k a year and owing me a lot more than I owe him. Plus my debt is 'due on sale' and there won't be anything left if the current sale takes place. And if the current sale takes place I won't have any assets he can take anyway.

I realize that this case would be fraught with litigation by X. (I don't htink anyone else would file objections but that could be naive on my part)

[Mensa1]

that X would get most of our assets, even tho I was the one who built most of those assests during our 25 year marriage.

There is much about the post that doesn't add up to me, especially this. Often difficult to discuss such emotional issues and be objective about what happens and why. But as stated this is a subject way wider than any Bk discussion could lend credence to.

[ColoradoBell]

Well, Mensa, I can only say that I am offended at the inference in your remark. It seems as if you believe that all property settlements are fair or perhaps you live in a community property state where things are generally divided 50-50. Since the settlement was in 2005, I've had time to be unemotional about the unfair division. But I haven't even rec'd the unfair division yet and have spent quite a bit on attonrey fees trying to. If the judge doens't wnat you to get the money he's awarded you....he can see to it that you don't get it. If you knew what had happened in my case, you wouldn't be quite so flip as to your remarks. Be that as it may, you're entitled to your opinion, however uninformed it may be.

[BobMango]

Well, Mensa, I can only say that I am offended at the inference in your remark. It seems as if you believe that all property settlements are fair or perhaps you live in a community property state where things are generally divided 50-50. Since the settlement was in 2005, I've had time to be unemotional about the unfair division. But I haven't even rec'd the unfair division yet and have spent quite a bit on attonrey fees trying to. If the judge doens't wnat you to get the money he's awarded you....he can see to it that you don't get it. If you knew what had happened in my case, you wouldn't be quite so flip as to your remarks. Be that as it may, you're entitled to your opinion, however uninformed it may be.

I wouldn't sweat the snarky comments. As anyone that's been involved in the law/courts/etc knows, it not about fairness. If it was would OJ have been free to golf all those years? Would the folks who lost their homes in the Kelo decision still be living there?

I don't have any real constructive advice to offer, but as others have pointed out, there is no inexpensive way to deal with this and adequately protect your interests. Good luck to you.

[HHM]

Based on what you are saying, you are going to need to pay an attorney just to figure out what the best option is. I can see why many attorneys are bowing away, they probably feel like what they would need to charge you just to figure it out is something you are unable or unwilling to do. Your situation is far beyond what any initial consult can address. You are in the rock and hard place, you need help, but given the complexity of the situation, "free" advice is not going to cut it. You will probably need to come out of pocket a couple grand just to have someone look at it and you will need to have the expectation that after spending that money, there may still be nothing to do.

Even despite that long explanation, it is not clear what a BK will accomplish for you, my guess is there are numerous facts that still need to come out to clarify the situation.

[ColoradoBell]

You are all correct in that this is an unusual situation.

But my expectation of what BK might do for me is rather simple:
1. in my stich, I need to file BK to salvage my homestead exemption.
This too will be challenged, as X will claim that he is entitled to half. And he may get it.

2. If the current contract on my house 'goes through' , there wouldn't be enough money to pay off all of my share of liens and some would be avoided.
While the avoidance would be great! the sale at such a reduced price would be nonetheless devastating. So my 'other' hope for BK would be if the sale might be challenged by the Trustee as being too far below appraisal that the Trustee might take over the sale and sell it for an amount that would allow me to pay my debts.

Although my predicament is indeed complicated, my questions that I'd like answered are actually straightforward. The attorneys I've called so far have admitted that they are just credit card debt BK filers, unequiped to handle my sitch. I haven't been upset that they've referred me to others, just frustrated.
I've been reading Colorado BK case law and learned a few answers, and this forum has certainly helped with some specifics. But I've paid out over $100,000 to attorneys since the divorce started and have ended up worse off than if I had just not responded to any of the motions, lawsuits, litigation.

I appreciate all the good advice found here and will take it to heart. Thank you!

[spetkovich]

Caveat: I'm not in Colorado, and have no experience outside of my state.

With that said, here's the real reason you'll have to pay more for your bankruptcy. Most attorneys accepting bankruptcy cases are not specialized bankruptcy practitioners, and most have little knowledge of bankruptcy procedures beyond the simple "credit card debt" cases as I believe you referred to them. Typically, the attorney you meet with accepts your fees, handles your calls and appears in court with you, yet contracts with a second attorney to essentially "ghost write" your petitions and schedules, and appear at any motion calendars that might come up. If you pay $1,500 for fees for a BKC case, $1,000 might go to the attorney you meet with, and $500 to the attorney who ghost-writes the petition and schedules.

This "typical" scheme does not apply to your situation. Your attorney would need to actually have a lot of specialized bankruptcy knowledge **himself** in order to provide any semblance of adequate representation. For this reason, you will have to actually hire one of the specialists in your area.

Most Trustee's offices also have attorneys who represent debtors, and these attorneys are typically very specialized in bankruptcy matters that will undoubtedly require litigation. Rather than going through the phone book, you might start by looking for a list of panel trustees in your district and calling their offices.

[Faust]

Your situation sounds horrible. I think if I were you I would just pack up,move away and call it a loss.

[ColoradoBell]

Thanks, Spetkovich,
I understand what you're saying and believe it....My only experience has been with family law attonreys, but I learned quickly that most of them had limited knowledge and relied on wheeling/dealing more than the law in representing their clients. If anything came up about specifics, they hired out researchers at half (or less) than their hourly and then charged the client by their hourly.

I have to attend to some other matters this week, but then will try once again to
find what i need. Perhaps I should meet with the 'basic' bk attorneys just to get some basic questions answered first. I'm starting to get a good picture of what might happen, but since there are variables, I really need a strategist to advise me on which strategy might be best for me.