Lawyer screwed up, now what?

What is the name of your state?Wisconsin
When I met my wife she had just gone thru a divorce in which she walked away and just wanted to put it all behind her. The ex-husband was given control of the home they owned together and was to take care of finishing renovations that were started and then sell the home. Instead he let the house fall into a state of disrepair and eventually stopped making the payments and actually took out some kind of second mortgage against the property. Well to make a long story short the bank can only find my wife and the ex is nowhere to be found. We have taken care of the second mortgage and paid the back taxes just so she could sell the home to "get out from under it". The divorce decree has everything in writing that my wife is not responsible for any of these debts but here in WI I guess the judges ruling isn't worth the paper it is written on. The bank is now coming after my wife for the remaining balance on the original mortgage ($24,000) and we went to an attorney to see what could be done and according to him my wife filing bankruptcy would "make it go away". We had put every "big ticket" item we have purchased since we were married in my name knowing that someday this may come back to haunt us but had we thought about it we would have realized that whats mine is hers and whats hers is mine. So we get to the courthouse on the day the bankruptcy was to take place and her attorney is not there, he had sent his brother instead which we weren't impressed with but what were we to do. Anyway, we start going over the details and he has this "deer in the headlights look" and is totally shocked that she is even trying to file bankruptcy. Needless to say he was not prepared to go thru with this, so he went in and told the federal person that we were not prepared to proceed and I guess he was not to pleased at all! So here we are, My wife has a bankruptcy on her record (because it was filed) for the next ten years even though not a single debt was eliminated! I realize that if she has to pay the debt (because they can find her!) she has to pay the debt, but what about the incompetence of the attorney that said we should do this? I guess I don't know where to turn but there is an unnecessary bankruptcy on my wife's record and to me that is some serious character and credit damage not to mention she is a wreck! What can we do if anything? Please help

Bankruptcy mess

First of all, what explanation did you get from your attorney and what did his brother give you as a reason you shouldn't / couldn't proceed?

Second of all, your wife doesn't have a bankruptcy "on her record" until the court approves the provisions and grants it. If your attorney's brother didn't submit the papers to the court, they couldn't have granted a bankruptcy.

You need to either start communicating with your original lawyer and get a full explanation of what happened. If you can't get one, you need another lawyer. Sorry. But once you get a good understanding of what went on and what the consequences of this mess are, you could conceivably have a legal malpractice action. But you have to know what happened first!

Question:"We had put every "big ticket" item we have purchased since we were married in my name . . ." Do you mean YOU purchased them with YOUR funds? Or do you mean you transferred them into your name after they were purchased?

There was an inheritance involved with this and my wife recieved it. Whenever we made titled purchases we put the title in my name, (house, truck, travel trailer) so the items were purchased with "her" money. This was all disclosed when she initially spoke to her attorney his response now is "I'm sure you told me but I just don't remember", he remembered to cash the retainer check! The reason he told us not to proceed was because the debt would not be eliminated since we had the means to pay it. The way I see it at the initial consultation he should have just told her that she was screwed and that she would have to pay it instead of getting the federal bankruptcy courts involved for absoloutley, %100, NO reason!! If she had to pay she had to pay and we understood that but we were looking for a loophole since she shouldn't have been responsible for this debt to begin with!
The way I understood him, since the bankruptcy was filed; letters sent out to creditors, posted in the newspaper, even if the bankruptcy doesn't take place (which he has never returned our calls so we get an update) these items will be there for any potential lenders to see, maybe thats not correct but I can't get new information to find out. Granted we haven't tried to reach him lately but we will and we will start documenting the time and dates.
He has admitted he was negligent but I don't have it in writing.
I guess I'm looking for some advice on what to do next. If everything is as I described it and the bankruptcy does appear on her credit report, what if anything can be done? If I can sue him for malpractice what will that do?

Bankruptcy mess

O.K. let's look at this realistically. Your writing indicates you are not a stupid individual, but I think perhaps the sting of having this bankruptcy fizzle - and I do mean fizzle: explode would have been if you had tried to go forward with it - has your reasoning a tad . . . skewed.

First, call your wife over to the computer . . .c'mon. . . .have her look over your shoulder and read along.

Your first post contains no mention of any inheritance. And you still haven't indicated when your wife actually received the proceeds. And you kind of gently kind of try to suggest that you didn't know you lived in a community property state. Leaving these tidbits out - and admitting that she deliberately put "titled property" purchased with her money into your name - suggests to me that you are trying to rationalize a situation that you have a better understanding of than you care to admit - which is O.K.: lots of people make careers out of doing that

In your OP you also allude to the fact that the plan was for your wife to sell the property "just to get out from under it". But you don't mention why that hasn't happened. I am on the East Coast, but it's hard to imagine being unable to get $24,000 for the building lot and the septic system - even if it is in Wisconsin Again, I'm supposed to guess? It wasn't done in time and the bank foreclosed; auctioned and they accepted a bid that was 24K short?

O.K. All that aside, since you talk about a bankruptcy being on your wife's "record" but not your own, I assume this wasn't a joint "attempted bankruptcy" and your question is: can your wife sue her bankruptcy attorney for legal malpractice? (You can't sue anyone - unless there's something else going on that you've posted in another forum that I don't know about.

Let's say she does have the most inept bankruptcy attorney since the Roosevelt administration. She was forthcoming about putting property purchased with her money solely in your name - and he didn't see it as significant. He didn't know he practiced in a community property state and so did not ask about the many circumstances that make a single filing in a community property state often complicated. She told him how much she inherited and when - and he forgot - so when he prepared her documents, it was not included. He then forced her to swear to her financial affidavits without reading them because he admits he's negligent and forgets things. And he sends her to bankruptcy court with his brother.

She's lucky he did. Because inheritances and lottery winnings are two of the first things the bankruptcy court cross-checks for. You misinterpreted the "deer in the headlights" look on his brother's face: it wasn't that he didn't know how to proceed. It was that he realized he was about to perpetuate a fraud upon the federal bankruptcy court on your wife's behalf - that "explosion" I referred to earlier. And it would have all been his brother's fault! And as a result of your wife's aborted bankruptcy, she has incurred significant damages to her finances (that retainer check you mentioned); her reputation - with creditors (who are happy the debts were not discharged) - and with the public (notices in the newspapers that are lining birdcages as we speak). And grievous mental anguish and suffering.

Have your wife run this by an attorney who handles legal malpractice. If she can't find one to take the case, there's always Pro se. Yes - that's a great idea: have her get up in court and try and sell this as legal malpractice to a jury. You, of course will be relaxing in the gallery while she's trying to learn the Rules of Civil Procedure.

I almost hate to tell you this, but if there is an iota of legal malpractice anywhere, it could conceivably be with the divorce lawyer who failed to include clauses requiring the ex-husband to immediately obtain refinancing in his own name and to prohibit him from borrowing further on the property until that was accomplished. And a clause that provided some consequences if he failed to comply with the other two. And But the statute may have run on that and I don't know if those clauses are even relevant to a community property divorce settlement.

And finally - and this is a big "finally" - there's a phrase called "Coming into Court with Clean Hands". It applies to Plaintiffs of Civil Actions. The "property-in-your-name" thing and the "trying-to-declare-bankruptcy" thing? They might make you want to consider alternatives to the courtroom - at least as far as this whole mess goes.

You and your wife need to acknowledge that this debt isn't going to go away. As the terms of the mortage undoubtedly hold her liable for costs of collection and attorneys' fees, the bank doesn't retain $75/hour lawyers to represent them. Your wife is also probably being charged an exhorbitant interest rate on the 24K: now an unsecured debt arising from a defaulted mortgage. It's not far from 24K to 100K under those circumstances.

I'm sorry you folks are in this mess. What you stand to lose and how you decide to take control of the situation should depend on what kind of property you own now and the general state of your finances. If you own a home; even if it's mortgaged, it is not necessarily immune from this debt.

Best of luck
RIS

When I first posted I didn't feel it was necessary to go into so much detail but now that I have gotten responses I will. Here is somewhat of a chronological order of events.
Wife gets divorced from ex and he is court ordered to take care of selling the home, my wife doesn't really want anything to do with it since there was really no equity in the home anyway.
Wife gets inheritance from grandparents and we, at this point know nothing of what has become of the other home and his failure to take care of his obligation.
Bank contacts wife and demands payment on mortgage.
Wife works with bank to pay off second loan against home and back taxes so the home can be sold with the understanding that her name (should have gotten that in writing!) will come off of the loan.That costs about $10,000 out of her pocket.
Home sells for less than what is owed on the mortgage, there is still money owed on the mortgage and for about a year and a half we hear nothing. In the meantime any purchases we make we put in my name so they can't "go after" them. At this point bankruptcy is NEVER considered.
Bank serves papers on wife demanding payment of $24,000.
She talks to attorney and he says a bankruptcy will eliminate the debt, she told him of everything including inheritance and how the titles were all put in my name.
Now at this point we believe him, we have no reason not to, thats what he does for a living!
Were not happy about the bankruptcy but this seems like the only way of avoiding having to pay for a home that has long since been sold and she wasn't obligated to pay for in the first place.
The rest of the story is the court date for bankruptcy and whatever repercussions there are. At this point were not really sure what if anything happened that day.
Now we know that she would possibly be obligated for some of this loan but not all of it, not to mention the $10,000 she already put into this just so it could be sold, they want her to pay for everything because they can't find him!
We were simply looking for a way out and this attorney led us to believe he had found one and now the hole may have gotten deeper. We know that the situation she is in was not his fault but everything that happened in these bankruptcy proceedings he should be held responsible for, everything was disclosed to him and there were no secrets kept, he chose to proceed and whatever happens with this bankruptcy is a direct result of his advice and his decisions.