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Is there any recourse against a lawyer who lied to me about bankruptcy laws?

Owosso, MI |

I am in MI and he told me if I file chap 7 my 2nd mortgage would sit as a lien on my property and I wouldn't have to pay it if i didn't reaffirm on it - he advised me to stop paying on the mortgage and now I am being foreclosed on for non-payment and I am in a worse position than i was before filing. His office is now vacated and phones disconnected and all attempts of trying to contact him have been fruitful.

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Attorney answers 3

Posted

He was correct. If you did not reaffirm you would not have to pay, and the lien would stay on your property. That is the law. Whether his advice to stop paying was or was not good advice depends on many more details we don't have, and certainly you had the final call as to whether or not you paid. Even if you had a malpractice claim you would have to show damages, and that would be questionable in most cases. You did not tell us the time frame, but that is another question. Finally, if he is out of business, how are you going to collect?

Asker

Posted

then how can my mortgage company demand full payment or foreclose if it was just to sit as a lien on my property? I have continued to pay on the first mortgage and never been late

Asker

Posted

He told me this was to prevent foreclosure not put me into it

Asker

Posted

and additionally my mortgage is under water and the second mortgage has no equity

Carl H Starrett II

Carl H Starrett II

Posted

They have the right to enforce their lien even if it makes no economic sense for them to do so.

Paula Brown Sinclair

Paula Brown Sinclair

Posted

Your personal liability on the second was likely discharged in the Ch. 7, but the lien remained. It is the lien that is foreclosed. Whether you fully understood the advice from your first attorney is impossible to know. Mr. Starrett correctly points out the availability of Ch. 13 to avoid foreclosure.

Asker

Posted

yes i understood his advice - I asked him even right before we went before the magistrate to clarity it again - I was obviously duped - and a good friend of mine just informed me that this lawyer had weapons charges against him (which if I had been aware of I would not have hired him) and is no longer available because he has begun serving a prison sentence - so next question - is there any way to avoid foreclosure now or is it too late?

Asker

Posted

the bankruptcy was dismissed in March

Paula Brown Sinclair

Paula Brown Sinclair

Posted

Dismissed???? Everything you have said proves that nothing short of a full case review by local experienced bankruptcy counsel will meet your needs which are clearly beyond the scope of the Avvo Q&A.

Asker

Posted

oops i meant discharged - i used the wrong word sorry

Carl H Starrett II

Carl H Starrett II

Posted

I'm still not seeing how you were "duped" and what the alleged weapons charged has to do with anything. You got a discharge of your debts and you still can file a Chapter 13 to get caught up on the second mortgage.

Paula Brown Sinclair

Paula Brown Sinclair

Posted

Dear Asker: Mr. Starrett is absolutely correct. If you want save your house, a Chapter 13 can help. Consult counsel without delay.

Asker

Posted

ok. I was under the impression from my attorney I couldn't file chapter 13 for 4 years after chapter 7. but I guess he gave me a lot of impressions that weren't correct.

Carl H Starrett II

Carl H Starrett II

Posted

You won't be eligible for a discharge of debts because you just got one in the Chapter 7, but you can still used Chapter 13 to get caught up on delinquent mortgage payments..

Posted

I agree with everything that Mr. Riddle said and only have a few more additional comments.

Whenever I meet with someone who is considering bankruptcy and owns a home with multiple mortgages, we discuss whether a Chapter 13 bankruptcy can be used to get rid of the second mortgage. It most parts of the country, removing a second mortgage in bankruptcy can only be done in Chapter 13 and not Chapter 7.

Some clients the path that you did - filing for Chapter 7 and hope that the second mortgage doesn't foreclose if they stop paying. Sometimes this makes sense. The bankruptcy discharge eliminates the risk of post foreclosure liability and there only remedy is to foreclose to collect on the second if you aren't paying. If a property is worth $200,000 and you owe $250,000 on the first mortgage, why would the second foreclose?

However, there are no guarantees in life. Property values can go up and maybe the second thinks they can get some money.

And as far as the original attorney goes, it isn't like he is responsible for paying your mortgage and it isn't his fault if you spent the money that you would have used to pay the second mortgage.

You should consider talking to another local bankruptcy attorney about using Chapter 13 to get caught up on the second if you wish to keep your home.

First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy. We also do other stuff and we do it well, but Congress wants me to post this notice. Second, nothing on this site is legal advice. You are not my client unless you enter into a written agreement signed by you and me.

Paula Brown Sinclair

Paula Brown Sinclair

Posted

Sound and comprehensive advice from Mr. Starrett.

Posted

Your lawyer did not "lie" to you -- he correctly stated the law. He must not have understood that you wanted to keep your house, or else he would not have advised you to stop paying. You can get a clue as to what he thought your intention was by looking at the Statement of Intention that was filed along with your petition -- which you should have reviewed and signed separately.

Asker

Posted

He stated I wish to keep the property on all the documents and he knew that from the start because my very first question set forth to him is how can I do something to relieve my debt and still keep my house