Two years ago I wrote about a scandalous situation in which a consumer bankruptcy attorney in New York thought he had found a way to by-pass the requirement of having his clients go through mandatory credit counseling . He had his secretary do it for them!
I wrote a detailed post about that attorney: Attorney Caught Cheating on Credit Counseling Requirement .
This attorney didn’t even bother telling his clients about their obligation to do credit counseling. He just had his secretary do it for them, in their names. When the Chapter 7 trustee discovered this “irregularity” he told the debtor that there were serious problems with the case.
That debtor wound up coming to me for advice since he no longer trusted his attorney (and for good reason). I took the case over and was successful in getting the former attorney to refund the debtor’s legal fees and pay my fees as well.
The U.S. Trustee then went on to investigate the attorney and sanctioned him $40,000. In addition, the bankruptcy court suspended the attorney from practicing bankruptcy before the court for a year. He was also required to take 16 hours of continuing legal education covering bankruptcy law, four hours of which had to be for ethics.
Here’s the update: The New York Appellate Division for the Second Judicial District learned of the suspension and misconduct. It disciplined the attorney by giving him a public censure. This is the highest form of discipline short of suspension.
The attorney paid the full $40,000 sanction, took the required continuing legal education courses, and has since been reinstated to practice before the bankruptcy court.
In short, a very expensive price to pay for taking a foolhardy and highly improper shortcut around a bankruptcy law requirement.