Debtor or Creditor – Why you should consult a bankruptcy attorney before doing anything touching a Bankruptcy

There is no thing in law as a true jack-of-all-trades. Many attorneys dabble in areas with which they are not all that familiar, and, if they have at least SOME familiarity or know what to ask – they will do OK. That is to say, if they make a mistake, it won’t be catastrophic.

A friend just posted a link to a case out of the Northern District of Texas on a Bankruptcy Lawyer’s group to which I belong. The case dealt with individual creditors who alleged that they were defrauded by a dishonest debtor. When you want to allege that a debt cannot be discharged because of fraud, you MUST make that allegation within a certain period of time. You must file specific papers with the court in order to make the allegation stick. If you need more time, you must ask for it before the deadline. If not, you are SOL. In this case, the creditors’ attorney was not a regular bankruptcy practitioner. He blew his deadline and the court held that his inexperience in bankruptcy was not “excuseable neglect” sufficient to excuse the late filing. The upshot was that the creditors lost their claim.

In my own practice I regularly see creditors and debtors who come in with attorneys who are not familiar with bankruptcy practice in my districts. Worse, when it is attorneys dealing with related cases that impact the bankruptcy, the creditors’ attorneys do not realize that they are committing stay violations.  Debtors who file with attorneys that do not regularly practice in bankruptcy law, especially in more complex cases, run the risk that deadlines are missed or that service is not made properly on the appropriate parties.  It can be even worse with pro se parties who, if creditors, run the risk of sanctions for breaking the rules and, if debtors, risk having cases dismissed or assets liquidated.

Take the time, talk to an expert, don’t rely on the internet.  The time spent could save tons of money later.