Ask Bill your personal finance question

My Attorney's Office Closed Taking My Files & Money

The State Bar closed my bankruptcy attorney's office. Where are my files? Where is my money? What can I do?

I have quite a bit of credit card debt that I attempted to repay through a credit counseling agency. When the payment became too large, I tried to renegotiate but couldn't so I stopped paying, hoping that the SOL would run out. In the meantime, one of them won a judgment in SC with an order for garnishment. Right after that, I had moved to VA and have only received one letter from that collector. However, I have received notice that another creditor has filed for a judgment. In addition, my house in SC is being foreclosed on. I decided that bankruptcy was the best option. I retained an attorney, completed all the paperwork and then found out today that the Virginia Bar Association has closed my attorney's office! My entire retainer is gone and she has all of my paperwork. I was able to work out an arrangement with the creditor that filed here in Virginia, so that will keep my wages from being garnished even though it won't stop the judgment. My question is, what should I do now? I obviously don't have the money to pay another attorney. Will the creditor in SC be able to pursue the garnishment here in VA?

Read full question
Bill's Answer
4.2
/5.0
(6 Votes)

Bills.com | Find Learn Save

Before I get to your answer, let me give you a little background information.

When a client signs a fee agreement with an attorney, it is customary though not required in all cases for the client to pay the attorney some money in advance. The attorney is required by law to put that money in a special bank account, which is called a "trust account." As the attorney works on a client's case, he or she is allowed to withdraw an amount out of the trust account that corresponds to the amount of time spent times the attorney's hourly rate.

One of the easiest ways for an attorney to be disbarred is to not take accounting for the client trust account seriously.

Client Security Funds

In response to attorneys absconding with their trust accounts in the 1950s and 1960s, almost all state bar associations set up client security funds to protect consumers in their state from unscrupulous attorneys. The state bars collect an annual fee from each attorney, which is pooled in a fund to reimburse victims of misappropriation. Each state bar has its own rules for determining what is a victim, and the maximum compensation amount.

The District of Columbia Bar has a list of state client security funds.

Although what I am about to write is specific to Virginia, readers in a similar situation in another jurisdiction should follow the steps suggested below with their state bar organization.

Virginia Clients' Protection Fund

I recommend you contact the Virginia State Bar as soon as possible.

The Virginia State Bar is an agency of the Supreme Court of Virginia that regulates the practice of law in Virginia. Although your former attorney may have been suspended or disbarred, she likely still has an obligation to refund any fees for services that were not completed and to provide you with a copy of your client file. The Bar should be able to explain to you how to make such requests and how to pursue a claim if your former attorney refuses to cooperate. If the attorney will not cooperate, you may need to file a lawsuit against her for unearned fees; the Bar should be able explain what steps you need to take to recover your money.

The Bar maintains a Clients' Protection Fund to reimburse clients who suffer monetary loss resulting from the misconduct of an attorney in Virginia, including failure to refund fees paid in advance for services that were not performed. This fund is a "payer of last resort," so you will probably be required to pursue any other available remedies before filing a claim with the Clients' Protection Fund.

The Bar may also be able to refer you to another attorney so that you can proceed with your bankruptcy filing, hopefully allowing you to discharge the debts that are contributing to your financial difficulties. To read more about bankruptcy, I encourage you to visit the Bills.com bankruptcy page.

You mention the "Virginia Bar Association" in your question. You should be aware that there is a voluntary attorney organization in VA called the Virginia Bar Association, but it is not the same as the Virginia State Bar, in which membership is mandatory for all attorneys practicing in the state of Virginia. I only mention this so that you make sure that you contact the correct agency -- the Virginia State Bar.

South Carolina judgment enforced in Virginia

As to your question regarding the enforceability of the judgment entered against you in South Carolina, it is possible for the creditor to take action to enforce its SC judgment in Virginia, but the process is relatively difficult and expensive. In my experience, most creditors choose not to try to enforce judgments across state lines, especially for small consumer debts, such as credit cards.

To garnish your wages in Virginia, the creditor will probably be required to file a lawsuit in VA, and petition the court to "domesticate" its South Carolina judgment in Virginia. Filing a lawsuit in VA will involve retaining an attorney licensed in Virginia and paying court fees and other costs up front. The creditor may simply decide it doesn’t want to spend any more money pursuing the debt, especially if you are planning to file bankruptcy in the near future.

Although I think it is unlikely that the creditor will pursue you in Virginia, I encourage you to consult with another attorney as soon as possible to get you bankruptcy case back on track. There is always the possibility that your creditor may be particularly aggressive, and it is best to resolve the debt once and for all.

Bills.com offers a wealth of information to consumers struggling with debt, available on the Debt Help page. I wish you the best of luck in resolving this debt and the problems with your previous attorney, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.Bills.com

Get Debt Help!
4.2
/5.0
(6 Votes)

People also like to Read

Bills.com Team

Get all the information you need about voluntary repossession, be it a vehicle or a home that you considering for voluntary r... Read more >>

BS

Get more information as to how wage garnishments work. If you are facing a creditor judgment, Bills.com can help you save.... Read more >>

Mark Cappel

You may or may not be responsible for your deceased spouse's debts depending on which state you reside in. In community prope... Read more >>

Mark Cappel

When a person dies, his or her debts do not disappear automatically. However, the family is not responsible for the debts. Le... Read more >>

Mark Cappel

How to handle collection calls on 12-year-old debt. Your state statute of limitations and federal law set the rules collectio... Read more >>

0 Comments

1500 characters remaining
loading...