Manhattan Bankruptcy Attorney Daniel Gershburg discusses why you should always check references for lawyers

Hey Daniel Gershburg, is this a self serving post as a Bankruptcy attorney in Manhattan?  yes.  Do I still think its incredibly important?  Yes.  I was at a meeting of the creditors this past week in New York City, in front of a trustee who was extraordinarily detailed in his approach.  A client, who seemed to have no assets or any exemption issues, began her meeting.  The attorney had not sent the petition, tax returns, or any other info to the Trustee ahead of time (huge red flag.)  The trustee was nice enough to go on anyway.  The attorney also forgot to tell the client to bring her social security card (another red flag).  Trustee went on anyway.

Finally we cut to the part that every Manhattan Bankruptcy attorney has witnessed recently.  The trustee asks about the 2009 tax returns.  Youll remember I wrote a previous post about this subject and my feeling that unless its necessary you should hold off on filing a chapter 7 Bankruptcy in New York until after you file and receive your tax refund.  Well the client apparently received THOUSANDS of dollars in tax returns, way over the amount you are allowed to protect, which meant the Trustee was entitled to all of that money.  The problem?  The client disbursed the money to her family and friends and other people she owed it to and could not possibly get it back. It was the attorneys job to tell her that she couldn’t do this.  Also his job to let her know what would happen to any money over $2400 in tax refunds that she received.  That didnt happen here.   What ensued was raw emotion mixed with frustration.  And the client was right.

Any competent Bankruptcy attorney in Manhattan would know that you need to analyze your clients tax return before filing the case.  And if the client insists on filing then the client needs to understand the money cannot at all be disbursed, but instead needs to stay exactly where it is, because it will most likely be the property of the Bankruptcy estate.  The trustee even asked how much the attorney charged and the amount was low.  And I always say this.  Just because the attorney is cheap, doesn’t mean you’re saving any money.  It will almost certainly be the case that this clients case is dismissed.  Now every lawyer makes mistakes, but there are some things that are just palpably clear.  This is exactly why I tell everyone looking to hire a Bankruptcy attorney in Manhattan, Brooklyn, or anywhere for that matter, to seek referrals.  Go online, do some research.  This will be one of the most important financial steps you take in your life and you cant to make sure you choose correctly.

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