QUESTION
It is a contingency fee suit, I am wondering if we win, will all the winnings be eaten up in the bankruptcy, or is it possible I could still get paid?
Asked on Feb 08th, 2013 on Bankruptcy - Delaware
More details to this question:
I represent a postal worker in an EEO retaliation case. However, my client has declared bankruptcy, and the trustee has me named as counsel in the suit.
14 ANSWERS
You should apply with the court to have you appointed as counsel for the matter, and specify the terms of your employment. If the Judge approves a per centage contingency fee, you will be paid that amount before the client's portion is paid to the client or the bankruptcy estate. Your client's portion may belong to the estate and creditors, although some tort recoveries are exempt depending on the facts.
Answered on Feb 12th, 2013 at 2:28 PM
Whether the debtor will be eligible to receive any of the money from the proceeds of this suit will depend on whether the debtor was entitled to take and in fact did take an exemption of this assets on Schedule C of the bankruptcy petition. The Trustee has 30 days after conclusion of the 341 meeting to object to the exemption claim, otherwise, must recognize the exemption.
Answered on Feb 12th, 2013 at 2:27 PM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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I'm sure the Chapter 7 trustee will honor your contingency fee agreement; if he did not think it worthy he would have petitioned to replace you.
Answered on Feb 12th, 2013 at 2:27 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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As you are counsel with permission of the Trustee, your fee should be paid. This is based on the facts presented and NJ law.
Answered on Feb 11th, 2013 at 10:27 PM
Richard hirsh
You should be certain that your bankruptcy trustee obtains an order from the court authorizing you to represent him or her as special counsel and to permit the contingency fee upon recovery. Keep detailed account of your time in addition. Under the circumstances your fees will be an administrative expense of the estate and you will be paid on a priority above the general unsecured creditors.
Answered on Feb 11th, 2013 at 10:26 PM
Based on the information provided, it would depend on what type of bankruptcy case your client filed. If he filed a chapter 7 then you should be fine depending on what type of debt he claimed and whether or not the Trustee keeps the bankruptcy open until your client receives a settlement. If this is a chapter 13 then it will depend when your client receives the money and how it will effect his chapter 13 plan. The Trustee will want some if not all of that money to go toward the debtors but will keep you in mind for your contingency fees.
Answered on Feb 11th, 2013 at 9:01 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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The proceeds of the suit, net of your fees, are clearly being claimed as part of the bankrupt's estate.
Answered on Feb 11th, 2013 at 8:22 PM
Deborah F. Bowinski
The assets that can be protected in a bankruptcy case very significantly from state to state. Your client's bankruptcy attorney should be able to answer your question. If your client filed without benefit of counsel then he or she could possibly learn a costly lesson. Either your state follows the federal exemption scheme or, it has "opted out" of the federal scheme to set up its own exemption provisions.
Answered on Feb 11th, 2013 at 8:17 PM
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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You should have a fee agreement with the trustee.
Answered on Feb 11th, 2013 at 8:07 PM
You may be able to get your attorneys fees (contact the trustee and get his read) but your client will probably have to hand over any unexempted amount for the lawsuit.
Answered on Feb 11th, 2013 at 7:59 PM
Business Bankruptcy Attorney serving Raleigh, NC
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J.M. Cook, P.A.
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The trustee stands in the shoes of the Debtor, your former client. If there is a valid contingency agreement and you act under that agreement, you should still get the same distribution under the agreement. The remainder we go to the estate to the extent the Debtor did not exempt it.
Answered on Feb 11th, 2013 at 7:57 PM
Litigation Attorney serving San Antonio, TX
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Graves Law Firm
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If the trustee designates you as his/her counsel on the EEO case, your contract of representation or something like it should be incorporated in the retainer agreement with the Trustee, and you should get paid if, as and when you make a recovery. Why not just get on the phone to the trustee and get smartened up. No crime in confessing that you've never encountered this situation before.
Answered on Feb 11th, 2013 at 7:52 PM
Bankruptcy Attorney serving Plantation, FL
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Moffa & Breuer, PLLC
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Your fees should be awarded through the bankruptcy court. Check to ensure that the Trustee obtained an Order from the Court employing you.
Answered on Feb 11th, 2013 at 7:51 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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Some can go with his personal exemption, but anything over that will be turned over to the Bankrupcty court and become part of the bankrutpcy estate.
Answered on Feb 11th, 2013 at 7:39 PM