Klein Law Group Wins Bankruptcy Case For Client Challenged By Trustee

Like several of our clients, “Joe,” a senior living alone in our area, fell on hard times and needed to file bankruptcy. In addition to having financial challenges, he was afflicted with serious medical issues. Over the years, Joe’s brother had been lending him money to pay for items such as the mortgage, property repairs, and daily living expenses. It was Joe’s plan to repay his brother once he sold his home. Housing prices plummeted and Joe was only able to pay back a portion of what he owed his brother. Nonetheless, his brother forgave the outstanding balance.

A few months prior to filing bankruptcy, Joe had a medical complication that put him in a nursing home. With the bills mounting and creditors calling, Joe had no other option but to declare bankruptcy. Upon filing bankruptcy, the trustee saw an opportunity to challenge the payment he had made to his brother after the home was sold. The trustee sought to prevent Joe from receiving a discharge of his debts, and also recoup $34,000.00 from his brother. In Chapter 7 proceedings, the trustee is paid a portion of whatever they can recover. Although it was a completely baseless claim, the trustee was looking to receive approximately $11,000.00.

Kunal Mirchandani, Klein Law Group’s attorney who specializes in bankruptcy and real estate law, aggressively countered the trustee. He filed a motion seeking to have the judge summarily reject the trustee’s claim. In addition, Mr. Mirchandani gave the trustee notice that he would be seeking sanctions against her and her attorney for filing a frivolous lawsuit. One day prior to the notice for sanctions expiring, the trustee backed down and voluntarily dismissed the case. Now Joe is free to receive a discharge of his debts and his brother does not have to worry about the trustee pursuing him on a frivolous claim.