If their attorney is friends with your family, but has not represented you, it would depend on how he obtained the information, it's probably not a conflict In a small town, attorneys are probably friends with a lot of people.
This is AVVO, a place for users to obtain general legal information to general legal questions. I am glad to help you in any way I can, within those limits. I wish to make clear I am only communicating with you for the sole purpose of exchanging such general information, and nothing more. It is not legal advice, which I can not provide because among other reasons I know few of the necessary details of your situation. I do not purport to represent you in any way, shape or form. Of course, if you would like to seek out my services, and if you are a NY resident, I will probably not put up very much resistance but representation would still necessitate a signed retainer agreement between yourself and I. Thank you.
It is unlikely to be a conflict of interest unless this attorney has previously represented you or your immediate family in other legal matters. Attorneys are not allowed to use information about or learned from one client to the disadvantage of another client. But there are no regulations that limit an attorney's actions based upon their own personal knowledge and experience. It is different than being disqualified from performing jury duty or acting as a judge where one must be able to be impartial.
What information would this attorney be likely to have about you that isn't contained in your bankruptcy file? The purpose of a conflict of interest is to prevent a party that has inside information from using it against you. Information that is widely available, such as something you may have posted on Facebook or small talk at a social event doesn't create a conflict - it is information that is publicly available. In addition, the bankruptcy process does allow a creditor & its attorney to ask you questions about your finances.
So is there something you are trying to hide that you may have disclosed to others? Sorry, if you have a big mouth, you can't expect a lawyer to keep a secret about information you may have publicly disclosed.
Hope this perspective helps!
I wonder how this would become a problem since in filing for bankrutpcy you will be offering disclosure under penalty of perjury so unless you are hiding assets, income, transfers of assets/income, I'm not clear how this impacts your case.