Divorce and Bankruptcy present a daily problem to all including the bankruptcy lawyer. Chapter 13 was designed to be a fluid bankruptcy in which it can change along with changes in the debtors lifestyle. The case can be modified, converted, dismissed, and dismissed and refiled. The options more then double when the client calls and ask what do I/ we do we are now getting divorced. The easy and only answer maybe call another bankruptcy lawyer. A meeting is necessary with the clients.
A review of the clients case should be done with updated information form the clients to determine what their options are. Maybe everyone will get lucky amd only a few more dollars are needed to finish the Chpater13. Most clients are not that lucky.
The clients need to be told they need to get a Relief From Stay from the bankruptcy to proceed with their divorce. They must be told that they need to make each of their divorce lawyers aware that they are in a Chapter13.
Now the problems and the conflicts arise. How do you determine what is each parties best interest. Should they both finish Chapter 13 and who is going to pay for it? Are they better off both converting to Chapter 7. Is one party better off converting while the other finishes Chapter 13? Maybe they are both off in new separate Chapter13s or Chapter7s. How do the new debts and the potential alimony and child support issues impact this decision.
The questions can go on and on. The conflict questions are the tough one:
1. Can one lawyer represent both parties?
2. Can the present bankruptcy lawyer continue to represent both parties?
3. Can the present bankruptcy lawyer represent either party?
The present lawyer may have too much information about either party to allow continued representation. This knowledge may put the lawyer in a spot in which his advice benefits one debtor and harms the other. The lawyer has to get out of the case. Clearly if the debtors do not get along the present bankruptcy lawyer can not continue to represent either or both parties.
Waivers are probably necessary even in the simple situation that can be wrapped up quickly.
The hardest part is that our clients (the debtors) typically do not have a lot of money to splash out on more legal fees at this time. It is going to be difficult for the current client to find a lawyer to take over their representation. The clients trust the current lawyer. The lawyers are not trying to make it more difficult on the debtors. Their are many unanswered questions in these situations. The easy road and the only road for the present bankruptcy lawyer is to send his debtor/clients onto new bankruptcy counsel. This maybe the only way the debtors get good advice for themselves.
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