By Henry E. Hildebrand, III, Chapter 13 Standing Trustee for the Middle District of Tennessee (Nashville) When a case converts from Chapter 13 to Chapter 7 prior to the confirmation of a plan, the Chapter 13 Trustee is not permitted to divert funds from the debtor to the debtor’s attorney. In re Lettie, 597 B.R. 637 (Bankr. E.D Wis. 2019)...
From the Editor’s Desk – Attorney Fees and Issues
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By The Honorable William Houston Brown (Retired)
Requiring attorney to return properties to estate not sustained under § 329. In a Chapter 13 case then converted to Chapter 7, the debtor had transferred to his attorney two properties that were subsequently foreclosed, with the attorney using his funds to purchase at foreclosure. The bankruptcy court found that the attorney’s services provided no reasonable value to the debtor and that the attorney did not disclose the transfers, requiring the attorney to disgorge fees received and return the properties to the bankruptcy estate. Although the bankruptcy court has . . .
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