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Ask Elizabeth Prentice Your Own Question
Elizabeth Prentice
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 174
Experience:  Managing Attorney for one of the largest consumer bankruptcy firms in America.
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I am currently in a chapter 13 bankruptcy filed in 2013.

Customer Question

I am currently in a chapter 13 bankruptcy filed in April 2013. My plan was confirmed in July 2013. A month afterwards I had received two notices of proofs of claim submitted to the courts from both my 1st and 2nd mortgages that contradicted earlier statements on the 1st mortgage on payoff information and arrearage and asking the court to start payments on my behalf to the second which is being stripped according to my lawyer. I also have been receiving bills from my creditors throughout this process even though they were to have stopped. I called my lawyer and sent emails to address these issues only to receive brief reassurances that everything was fine which I took in trust. One month later I received a bill notice from the court that my law firm is billing me for these email responses 562.00 that is to be added to my current plan. I have a chance to respond to the court to refute these charges (which I do) within 21 days. I have tried to talk to my lawyer first who responded that cursory glances to emails, not having a lot of time do to other court matters, billing doesn't always reflect actual dates and time spent on my issues, but that calls and emails do take extra time on my lawyers part to address these issues. My question is that this is all part of handling a bankruptcy case isn't it? I get notices in the mail I should be able to ask my lawyer about them and not expect to be billed more than what I have already paid out in the set fee we originally agreed upon. That is why I hired an attorney in the first place I am not familiar with the bankruptcy process or the laws and if I have questions about court notices including the one I received from the court asking for payment to be added on behalf of my law firm I should be able to ask my lawyer about these issues without incurring more debt which is the whole point of why I'm doing the bankruptcy in the first place. I feel I am backed into a corner here. I don't want to file a formal response with the court and risk upsetting my lawyer to the point where the issues that are soon going to be addressed ie. mortgage modification and other points left may not be properly addressed because I do dispute the charges on the other hand I don't want my lawyer to think that it's alright to bill me for work that has been overstated or not addressed at all.
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Elizabeth Prentice replied 3 years ago.
I am a bankruptcy attorney and I would be happy to assist you. I am sorry to hear about your matter and understand that Chapter 13 can be very difficult to understand, Let me clear up your confusion on all of the issues. First, the creditors are required to file a proof oc claim with the court. The proofs of claim are actually the correct numbers, even if you don't agree. The reason is that these numbers have included interest and their attorneys fees up to that date. Your bankruptcy did not stop the amount from escalating since it is a secured debt. Further, they had to retain an attorney after you filed bankruptcy which would have compounded the amount due to attorneys fees and legal costs. The 1st mortgage is the only proof of claim you should be concerned with. It should have a copy of your original mortgage signed by you, attached to it. Make sure it has your name and it is not someone else's mortgage. Next, you should not be concerned about the 2nd mortgage. Although your attorney has filed a motion to strip the lien (and it sounds like it was granted since your plan was approved), let me explain this further since most debtor's in bankruptcy are confused about what "stripping" means. Essentially, your 2nd mortgage is not YET gone. In order for it to be fully removed from your case, you must continue to make payments to the trustee and complete your 3 or 5 year plan. Only then will you recive a discharge. Then, when you recieve your discharge, you may go and complete whatever is required in your county recorder's office to take the lien 2nd mortgage lien off the house or request that the 2nd mortgage company do it. You will need a copy of the order (you can get a copy at the court clerk's office) and your discharge which will come in the mail. Many times debtors are unable to make it all the way through a Chapter 13. If that were to happen, the 2nd mortgage would come back as if it never left. This is why they filed a proof of claim.

With regards XXXXX XXXXX attorneys fees, typically in a Chapter 13 debtors will pay a flat fee. For example - $1500 before the case is filed by the debtor and $3500 in the plan. HOWEVER, Chapter attorney fees bill by the hour. So if a client's calls, meetings, work in file exceeds that amount, OR if work is performed after confirmation of the Chapter 13 plan, the attorney may file a motion to request that they be paid in the plan. Attorneys do not work for free and they flat fee that a client pays is not limitless. You should read your original attorney retainer agreement close. Your attorney probably charges $300/hour which is the norm in the industry. Your emails would have required he go and research your case, evaluate the docket and other documents in your file in order to respond to you. Unfortunately, most bankruptcy attorneys have so many clients that we can not remember them all, which is why when a client asks a question we have to go back and review your file, which we are sure that the clients appreciate so we aren't telling incorrect information. The motion your attorney filed with the court is so that your attorney can be paid out of the plan. It merely decreases the amount that the unsecured creditors get. So think of it this way - your attorney is going to be paid for the work he did for you instead of some credit card company or your second mortgage. Therefore, your attorney is entitled to ask to be paid for providing services in excess of what he was obligated under the attorney retainer agreement. In the future though, you should not hesitate to contact him if you have a problem, but remember that he has the right to file a motion to be compensated.

I hope my answer has assisted you and that you will provide me a positive rating!