Converted from 13 to 7 with same attorney. Had an exempt PI case happen and had her hold it in her trust.

Question

Converted from 13 to 7 with same attorney. I paid her for the 13 and she was paid through the 13 payments until conversion. Paid her 3k for the 7. She said I owe her a large figure for the 13 but has never invoiced me after I’ve repeatedly asked her for a bill to be sent to me and to submit it as a debt to the 7 trustee. She said it doesn’t work that way after discharge if the trustee exempts the PI money then I pay her from that. I’ve never seen evidence of that money being in her trust. My bankruptcy was discharged yesterday and she’s still saying she’s waiting on the trustee to exempt the PI money which logically doesn’t make sense because what if there was no PI money? Is this legally accurate?

Martha Warriner Jarrett · Answer

It's hard to tell from the info you provided, but you are on the right track to demand an accounting of the settlement funds in her trust account, as well as an invoice for the services she is billing you for. Do you have a written retainer agreement with her? That should also help determine if she is owed anything. As a last resort, iif none of that works and she doesn't provide you with an accounting and an invoice, you can report her to both your chapter 7 trustee and your state bar (after advising her that you will do so if she doesn't respond to your requests).

James L. Arrasmith · Answer

It seems there are a few issues that need clarification. When your bankruptcy was converted from Chapter 13 to Chapter 7, the bankruptcy estate was essentially reorganized, and your debts might have been handled differently. If you had a personal injury (PI) case, the money from that case could be considered an exempt asset, which means it might not be available to creditors. However, the trustee should provide confirmation on whether the PI funds were exempted. 
 
Your attorney's claim that you need to pay her from the PI funds after they are exempted is a bit unclear. If there is no PI settlement or the funds are not available, it would be unreasonable to expect you to pay from those funds. Additionally, the fact that she hasn’t invoiced you or submitted a debt claim to the trustee could create complications. Normally, she should submit a bill to the trustee for any fees owed under the Chapter 7, and the trustee would decide if it is a valid claim. 
 
Given that your bankruptcy was discharged and there’s been no clear proof of the PI money being in her trust, you may want to follow up directly with the trustee and possibly seek a second opinion about the process. If the funds weren’t exempt or the attorney didn’t act properly, you might need to address this situation separately with legal help.

Q: Converted from 13 to 7 with same attorney. Had an exempt PI case happen and had her hold it in her trust.