A client contacts your law firm on the eve of a foreclosure sale, then proceeds to plead with you to help them save their home. During the intake process and the petition preparation process, the first thing that should be done is to “ask and verify”, if they have ever filed for bankruptcy before. It is at this point where you will find out the trustworthiness of your client.
Obtaining their drivers license, social security card or tax return to verify their identification is important. This information can be inputted into a program called PACER, that allows you to check if there were any previous filings and what was the result of those previous filings.
Why is this important? An individual cannot have two open bankruptcy cases going at the same time. Now why would someone try to file for bankruptcy again knowing they are already in an active case? What may seem to be to that person, an innocent but desperate attempt to keep their home, is actually fraudulent and is subject to the penalty of perjury and all that comes with that.
In their current case, a lender may have obtained relief from the automatic stay and will be proceeding with their foreclosure process. That debtor might be incorrectly thinking to themselves that their current Chapter 13 bankruptcy did not include their mortgage, but now that they are delinquent with their payments, they feel they could file a separate case to now include this mortgage. They then fail to reach out to their current attorney to go over their options, such as modifying their plan, and decide to hire a new law firm to file this new case.
Another matter you have to be worried about is sanctions against your firm, for failure to do your due diligence. Never put your practice at risk due to this. Do not allow the stress of your client to become your stress, in which you are now rushing to file their case without doing the proper legwork prior to filing their Chapter 7 or Chapter 13 bankruptcy. If you do not have a PACER account, make sure to obtain one by going to https://pacer.uscourts.gov.
As a reminder, make sure to always ask and then verify if there are any previous bankruptcy filings prior to filing a bankruptcy petition.