After a lawyer jointly represented spouses in a Chapter 13 bankruptcy and one disappears, can the lawyer keep representing the remaining spouse?

Plain-English summary

A lawyer jointly represented a husband and wife in a joint Chapter 13 bankruptcy. The husband disappeared, leaving the wife unable to make the plan payments. She asked the lawyer for advice on stopping payments so the plan could be dismissed as to the husband and then modified to cover only her debts. The committee considered whether the lawyer could continue to represent the wife under Rule 1.7(a).

The opinion concluded that continuing to represent the wife in the husband's absence does not, by itself, present an actual conflict. If the case is dismissed for the wife's inability to comply, neither spouse gets a discharge and both remain liable; the wife's later discharge after a plan modification does not change the husband's position, and to the extent she pays joint debts, he benefits. The opinion identified situations that would create a conflict, such as the wife trying to discharge marital debts subject to equitable distribution, alimony, or child support, or the need to use confidential information the husband had shared (Rule 1.9(c)); if competent representation of the wife would require using that information, the lawyer could not continue.

The opinion encouraged lawyers undertaking joint Chapter 13 representation to discuss with clients the conflicts that can arise over the three-to-five-year plan and to obtain written waivers of future conflicts (Rule 1.7(a)(2); RPC 168). Absent a waiver, the Bankruptcy Court, which supervises the attorney-client relationship (11 U.S.C. section 329; Fed. R. Bankr. P. 2016(b)), may authorize continued representation after notice and a hearing. If a potential conflict becomes actual and zealous representation of the remaining spouse would require acting against the absent spouse, the lawyer would have to withdraw (Rule 1.7(c)).

Currency note

This opinion was issued in 2001, before North Carolina's adoption of the 2003 revisions to the Rules of Professional Conduct, and it cites the rule numbering then in effect (including a now-renumbered conflict structure at Rule 1.7(a), (c) and the former-client rule at Rule 1.9(c)). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific requirement mentioned here.

Common questions

Q: Can a lawyer keep representing one spouse after jointly representing both in a Chapter 13?

A: Often yes. The opinion held that continued representation of the remaining spouse is not an actual conflict by itself, where the spouses' interests are not adverse on the bankruptcy outcome.

Q: When does it become a conflict?

A: The opinion identified conflicts where the remaining spouse seeks to discharge marital debts tied to equitable distribution, alimony, or child support, or where the absent spouse's confidential information would have to be used against him (Rule 1.9(c)).

Q: How can lawyers prepare for these conflicts in joint bankruptcy cases?

A: The opinion encouraged discussing the potential conflicts and obtaining a written waiver of future conflicts from both spouses (Rule 1.7(a)(2); RPC 168), noting waivers must be in writing.

Q: What happens if there is no waiver and a real conflict arises?

A: Absent a waiver, the Bankruptcy Court may authorize continued representation after notice and a hearing; and if the conflict becomes actual and would require acting against the absent spouse, the lawyer must withdraw (Rule 1.7(c)).

Background and rules framework

The opinion applied North Carolina Rule 1.7 (conflict of interest: current clients, including the then-existing subsections (a), (a)(2), and (c)), the analogue to Model Rule 1.7, together with Rule 1.9(c) (use of a former client's confidential information), the analogue to Model Rule 1.9. It relied on prior opinion RPC 168 on future-conflict waivers and on the Bankruptcy Court's supervisory authority under 11 U.S.C. section 329 and Fed. R. Bankr. P. 2016(b).

Citations and references

Rules of Professional Conduct:

• MR 1.7 (conflict of interest: current clients) / NC Rule 1.7(a), (a)(2), (c)
• MR 1.9 (duties to former clients) / NC Rule 1.9(c)

Statutes and rules:

• 11 U.S.C. section 329; Fed. R. Bankr. P. 2016(b) (court supervision of attorney compensation)

Other opinions cited:

• NC RPC 168: waiver of objection to a possible future conflict must be in writing

See also

• NC Bar 2001 FEO 6: Death Benefit Conflicts
• ABA Formal Op. 08-450: Confidentiality, Multiple Clients
• NC State Bar 2007 FEO 1: Duty to Heirs When Filing a Wrongful Death Action

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2000-formal-ethics-opinion-2/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Inquiry:

Attorney represented Husband and Wife in filing a joint Chapter 13 bankruptcy petition. Husband disappeared, leaving Wife responsible for the entire Chapter 13 payment plan. Wife called Attorney to inform him that Husband had disappeared and Wife did not believe that she could make the payments alone. She asked Attorney for his advice. Attorney believes that it would be best for Wife if she stopped making the payments. The case would be put on for dismissal and notice sent by the court to both spouses. If Husband does not respond to the notice of dismissal, the court will dismiss the plan as to Husband. Attorney can then modify the plan for Wife to include only the debts for which Wife is liable. If Attorney cannot assist Wife in this way, Wife will have to hire another lawyer at an added expense to her. May Attorney continue to represent Wife?

Opinion:

Rule 1.7 (a) prohibits Attorney from representing a client if the representation of that client will be, or is likely to be, directly adverse to another client, unless Attorney reasonably believes the representation will not adversely affect the interest of the other client, and that client consents.
The mere fact that Attorney continues to represent Wife in the absence of Husband does not present an actual conflict. If the Chapter 13 case is dismissed because of the inability of Wife to comply with the current plan, there will not be a discharge and both parties will remain liable for individual and joint debts. If Husband does not get a discharge from the debts, he will remain liable on his debts. However, this outcome will not be changed by the fact that the Wife receives a discharge after a plan modification. In fact, to the extent Wife pays on joint debts in a modified Chapter 13 plan, Husband benefits from the reduction in the amount for which he remains liable.
There are circumstances under which representation of Wife to discharge (while Husband does not receive a discharge) is a conflict, such as instances in which Wife attempts to discharge marital debts, which are the subject of equitable distribution or alimony or child support claims. In addition, if Husband communicated confidential information to Attorney, Attorney may not use that information to the advantage of Wife or the disadvantage of Husband. Rule 1.9(c). If competent representation of Wife requires the use of the information, Attorney cannot continue to represent Wife.

Attorneys who undertake joint representation of a husband and wife in Chapter 13 cases should discuss with potential clients the potential conflicts that might arise in the three to five years of the plan's duration. Given the potential for conflicts, attorneys are encouraged to obtain a waiver of future conflicts from both spouses. See Rule 1.7(a)(2) and RPC 168 (waiver of objection to possible future conflict of interest). Waivers of future conflicts must be in writing. RPC 168. In the absence of such a waiver, the Bankruptcy Court, which has an ongoing supervisory role in the attorney-client relationship (11 U.S.C. section 329; Rule 2016(b), F.R.Bkr.P.), may authorize the continued representation of Wife after notice and a hearing.

It should be recognized that if a potential conflict becomes an actual conflict, and the zealous representation of the remaining spouse requires acting contrary to the interest of the disappeared spouse, the Attorney would have to withdraw from the representation of Wife. Rule 1.7(c).