May a Connecticut lawyer file a limited-scope Chapter 7 case for a debtor who owes unrelated concurrent clients?
Apply this to your situation
This page answers the general question as of 2014. Ask about yours and see what the current Connecticut Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
Rule 1.2(c) permits a reasonable limited scope with the debtor's informed consent. The lawyer must explain the implications and risks of ending representation after the first creditors' meeting, including vulnerability if a contested matter later requires withdrawal, and the fee must remain reasonable under Rule 1.5.
Merely preparing and filing a Chapter 7 petition is not directly adverse to the lawyer's concurrent creditor clients. The filing supplies statutorily prescribed information for administration by the court and trustee rather than advocating a disputed claim against a creditor.
The lawyer must nevertheless examine the debtor, creditors, and likely objections before accepting the case. A significant risk of a discharge, exemption, lien, claim, examination, or reaffirmation dispute creates a Rule 1.7(a)(2) conflict. The lawyer then may proceed only if all Rule 1.7(b) conditions are met, including a reasonable belief in competent and diligent representation, disclosure of risks, and informed written consent from every affected client.
In practice
Under this opinion, a limited-scope agreement does not narrow the conflict check. The no-consent result depends on matter-specific scrutiny showing that neither creditor objections nor another contested issue is significantly likely to create adversity during the bankruptcy.
Common questions
Q: Is limited-scope Chapter 7 representation ethically prohibited?
A: No. It is permissible when the limit is reasonable, the debtor gives informed consent, and the fee is reasonable.
Q: Does filing the petition itself make the debtor adverse to every creditor client?
A: No. The Committee treats the ordinary filing as a statutory in rem process rather than advocacy against a creditor.
Q: When is creditor-client consent required?
A: When careful scrutiny reveals a significant risk of a contested issue or other direct adversity involving a concurrent creditor client.
Q: What must the debtor understand about the limited scope?
A: The implications and risks of counsel ending after the first creditors' meeting, including possible withdrawal at a vulnerable stage if a conflict develops.
Background and rules framework
Rules 1.0(f), 1.1, 1.2(c), and 1.5 govern informed scope limits, competence, and fees. Rule 1.7(a) defines direct-adversity and material-limitation conflicts, and Rule 1.7(b) governs consent to a waivable conflict.
Citations and references
Connecticut Rules of Professional Conduct:
- Rules 1.0(f), 1.1, 1.2(c), 1.5, 1.7(a), and 1.7(b)
Statutes and rules:
- 11 U.S.C. § 341 and Bankruptcy Code §§ 343, 522(f), 523(a), 524, and 727(a)
- Bankruptcy Rules 2004, 3007, 4003(b), and 4008
- D. Conn. Local Rule 83.2 and Bankruptcy Local Rule 1001-1(b)
Cases:
- In re Slabbinck, 482 B.R. 576 (Bankr. E.D. Mich. 2012), limited bankruptcy representation
- In re Egwim, 291 B.R. 559, 579 (Bankr. N.D. Ga. 2003), limited bankruptcy representation
- In re Opinion No. 17-2012, 2014 WL 4147820, 2014 N.J. 652 (N.J. July 2, 2014), pro bono Chapter 7 screening
See also
- CT Informal Op. 16-02: Municipal tax-sale concurrent client
- CT Informal Op. 20-01: Limited-scope divorce fees
Source
- Landing page: Connecticut Bar Association Informal Ethics Opinions
- Original PDF: Informal Opinion 14-06
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