Just a Lawyer in Lincoln's Hometown

May 31, 2012

Bankruptcy issues relating to personal injury cases | Illinois State Bar Association

Bankruptcy issues relating to personal injury cases | Illinois State Bar Association.By  Brett J. Swanson

Despite difficult economic times, the American Bankruptcy Institute has noted the number of bankruptcy filings has dropped across the country. However, a recent opinion from the Illinois Appellate Court confirms that trial lawyers from both sides of the bar should be aware that bankruptcy filings can, and will, impact your case. In Berge, the First District found that the doctrine of judicial estoppel bars a plaintiff from proceeding with a cause of action in state court where the plaintiff fails to disclose the action as an asset in a bankruptcy petition. Berge v. Kuno Mader and DMG America, Inc., 354 Ill.Dec. 374, 957 N.E.2d 968 (1st Dist. 2011).

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Mr. Swanson is a smart guy. Thanks to ISBA for publishing this. Go read the full article in the Bar Journal. The federal courts here in the 7th Cir. will apply judicial estoppel to inchoate civil rights claims. Which is why I learned to, and now ask my prospective employment clients whether they have ever filed a bankruptcy claim!

October 16, 2010

Relying on clients? Its allowed.

Filed under: Other Law I want to pontificate about — Chuck @ 12:15 pm
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Just read an article about a bankruptcy lawyer who at the meeting of creditors had to back pedal so fast he should have fallen on his butt. Turns out that on one of the forms his client had filled out under penalty of perjury , indicated that he had no personal expenses. When the trustee asked about it, he indicated that he lived with his parents. So the trustee opined that all of the client’s income would be available to pay his creditors. Now the client and the lawyer had to back pedal, and fast.

It’s obvious to me that the client was trying to game the system — or was so dense that he couldn’t understand the forms. In any case the lawyer should have seen that something was wrong. As lawyers we cannot simply be form fillers. If a client with a house, car, children, etc fills out a form indicating that she has no expenses, – the lawyer MUST question it. When there is a glaring error like that the lawyer and her staff have to raise questions.

But what about when a client says he spends $500 on food each month when in fact he spends $400? Or claims that there are no judgement against him, when in fact an unreported judgement exists in some other state? Or that she has disclosed all of her assets, when in fact valuable, but hidden, personal property exists? Is the lawyer responsible for these client mistakes (misrepresentations)? Does the lawyer have to spend all of his (usually) small flat fee searching high cost databases, searching the client’s home, or traveling to clerk’s and recorder’s office all over? I think not!

At some point lawyers have to be allowed to rely on the client’s assertions. Any lawyer worth her salt will tell, nay demand, that the client tell the truth. Clients need to be impressed with the fact that the documents they sign are signed under oath. Lawyers have to challenge anything suspicious and take reasonable precautions to determine that the client’s tale is true. But in the final analysis, a lawyer just has to trust his client.

Chuck from Watson Law, LLC

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