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Can you stop CH. 7 bankruptcy after just leaving a down payment but haven't filed yet?

Chicago, IL |

I went to seek a bankruptcy lawyer on how I can stop wage garnishment he offered me his service on how to stop wage garnishment and go bunkrupt. I left a down payment but haven't filed anything yet. Can I still cancel the bankruptcy process? I no longer want to go through Bankruptcy and want my money back from the down payment.

Attorney Answers 6

Posted

Why are you not discussing this with the one person who can answer your question - the lawyer with whom you met? If your case has not been filed, just tell the lawyer you changed your mind. Whether you get money back is something that only the lawyer can tell you. We don't know the lawyer's policy on meetings and whether billable time was spent on the matter.

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Posted

Yes - You can either instruct your attorney not to file, or if you have filed, instruct your attorney to withdraw your petition. This question should have been asked directly of your bankruptcy attorney who would have been better able to advise you of the wisdom of your decision.

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2 comments

Derek R. Caldwell

Derek R. Caldwell

Posted

I agree that you can instruct your attorney not to file your case if it has yet to be filed. However, you cannot just direct your attorney to withdraw your case once filed and have it withdrawn. As Ms. Sinclair points out, you have to file a motion showing good cause, serve the motion and notice giving opportunity to object on all creditors and the trustee, and at least get the trustee to agree. There is no right to dismiss a Ch7. You can dismiss a Ch 13 without consent of the court (usually), but you have to get a court order allowing dismissal of a 7 and they are rarely given.

Judy A. Goldstein

Judy A. Goldstein

Posted

Thank you for your polite explanation.

Posted

Yes you can stop the bankruptcy case from being filed. You should contact the lawyer immediately to let the lawyer know you changed your mind. You should communicate to the lawyer in writing. Only the lawyer can let you know if you will get your down payment back. If you received a contract for the lawyer to provide legal services, the contract should tell you what happens to your down payment. If your case has been filed, it can be dismissed. However, dismissing a case has a lot of requirements. You would need the lawyer to help you dismiss it. I hope this works out for you.

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Derek R. Caldwell

Derek R. Caldwell

Posted

I am glad Ms. Porter qualified her statement that a Ch7, once filed, can be dismissed. They can be but it is very rare and generally is only possible in extreme circumstances because, unlike Ch13, there is no right to dismiss a Ch7 case after filing. I have only done it once in my 10+ years of bankruptcy practice and that was when shortly after filing my client, who had a no asset case, was in a car wreck and broke her back and was incurring substantial medical bills as a result. Generally, I tell my clients that they will not be able to dismiss a Ch7 case once it is filed.

Posted

Of course, you are not required to file a bankruptcy petition even though you retained an attorney to start preparing one. Your fee arrangement with the attorney is, however, suspicious unless by "down payment" you mean the first of a series of partial payments on a flat fee to be completely paid before your case was to be filed. If your attorney agreed to an installment payment schedule under which your payments were to continue after your petition was filed, that agreement may be unethical or at least unenforceable since your obligation to pay would be discharged along with the rest of your debts.

The right of your attorney to retain any part of your "down payment" upon the closing of your file will be governed by your legal services agreement/contract with the attorney and secondarily by the extent of work s/he has already performed.

Be aware that Ms. Goldstein's advice that you can just withdraw a bankruptcy petition once filed is inaccurate. The Bankruptcy Code allows withdrawal of a Chapter 7 petition only upon a finding of "good cause," after notice and hearing, and such good cause is almost never found.

Bet wishes for an outcome you can accept, and please remember to designate a best answer.

This answer is offered as a public service for general information only and may not be relied upon as legal advice.

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Posted

My colleagues are on point. Ask your lawyer if the case was filed. If it wasnt, convey your intent not to file. If the case was filed, your lawyer now has to make a motion to dismiss (which is not automatically granted) Whether he will issue you a refund, is up to him and the retainer agreement.

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Posted

You wrote, " I no longer want to go through Bankruptcy and want my money back from the down payment."

A: Unearned attorney fees & and all court costs advanced (if any) should be refunded.
Although you did not file bankruptcy, your attorney may have earned some or all of the "down payment" based on the work done on your case.

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