“Real Housewives of New Jersey” star Teresa Giudice has sued her former bankruptcy attorney, claiming he botched her family’s bankruptcy filing in 2010. Her high–profile bankruptcy resulted in a 15 month prison sentence for Giudice and a 41 month sentence for her husband, Joe, after the couple was convicted of hiding assets during their bankruptcy proceeding.
In a three count lawsuit filed in Manhattan Supreme Court, Guidice makes claims against attorney James Kridel for Negligence-Legal Malpractice, Breach of Contract, and Breach of Fiduciary Duty. Kridel is alleged to have never met with Teresa Giudice before filing the bankruptcy case, and failed to conduct a reasonable investigation into her financial affairs. She claims that Kridel acted negligently in
“(a) representing the Plaintiff throughout the Bankruptcy Case when it was apparent that he lacked the ability to competently represent the Plaintiff;
(b) negligently preparing materially inaccurate amendments to the schedules and statement of financial affairs;
(c) negligently advising Plaintiff throughout the Bankruptcy Case;
(d) negligent representation in connection with the Section 341 Meeting; and
(e) negligent representation in connection with the 2004 Examination.”
Giudice asks for $5 million dollars in damages.
Whether or not Teresa Giudice has any valid claims against her attorney, her allegations are serious. A personal meeting between the client and the attorney is mandatory. One court stated, “This court concludes and finds that an attorney, as a debt relief agency, must provide face to face legal advice to a client, as an assisted person, prior to the filing of the petition and at every critical stage of the bankruptcy proceedings.” In re Santiago, 2011 WL 4056700 (D.P.R. 2011).
Additionally, Bankruptcy Rule 1008, requires that “[a]ll petitions, lists, schedules, statements, and amendments thereto shall be verified . . . .” This means that debtors must sign the petition, Schedules, SOFA and any amendments to those documents as a means of not only authorizing the filing of those documents, but of verifying, under penalty of perjury, that they have reviewed the information contained therein and that it is true and correct to the best of their knowledge, information and belief. See Briggs v. LaBarge (In re Phillips), 317 B.R. 518 (B.A.P. 8th Cir. 2004). Attorneys, correspondingly, have “an affirmative duty to conduct a reasonable inquiry into the facts set forth in a debtor’s schedules [and] statement of financial affairs . . . before filing them.” See Lafayette v. Collins (In re Winthrow), 405 B.R. 505 (B.A.P. 1st Cir. 2009). As a part of this reasonable inquiry, the attorney should sit down in person with his client and carefully review all Schedules, the SOFA, and any other documents to be filed with the court to ensure that all of the representations set forth therein are true and accurate. See In re Nguyen, 447 B.R. 268 (B.A.P. 9th Cir. 2011).
The best practical advice is to insist that you meet with your bankruptcy attorney in person prior to filing a bankruptcy petition. As in the case of Teresa Giudice, the debtor is ultimately responsible for the contents of the bankruptcy petition and schedules and verifies the accuracy of the information under penalty of perjury. Protect yourself by ensuring that your attorney is also following the law and is fully engaged in protecting your legal interests.