While people have the right to be represented by an attorney in criminal cases, they rarely enjoy similar rights in civil cases. For example, in bankruptcy, debtors can seek the appointment of counsel, but their requests will only be granted in exceptional circumstances, as discussed in a recent California ruling. If you are overwhelmed with debt, you should meet with a California bankruptcy attorney to evaluate whether bankruptcy may be an option for you.
History of the Case
It is reported that the debtor filed for Chapter 13 bankruptcy. The court then granted a creditor relief from the automatic stay, which had been initiated when the debtor filed for bankruptcy. The debtor claimed that the creditor had wrongfully acquired the property at issue through fraud. The bankruptcy court also dismissed the debtor’s Chapter 13 case after the debtor failed to amend her debt adjustment plan as directed by the court. The court had ordered the debtor to omit a particular creditor from the plan, but the debtor failed to do so by the June 28, 2024, deadline, resulting in a dismissal of the case due to prejudicial delay. The debtor appealed both orders and moved for appointment of counsel in both matters.
Appointment of Counsel in Bankruptcy Cases
On appeal, the court reviewed both of the debtor’s motions for the appointment of counsel. It applied the standard for appointing counsel in civil cases, which requires a showing of “exceptional circumstances” under 28 U.S.C. § 1915(e)(1). This involves evaluating the likelihood of success on the merits and the debtor’s ability to articulate claims in light of the legal issues’ complexity.
In the first appeal, the court found that the debtor’s claims of fraud against the creditor were unsupported by any evidence beyond mere allegations. The debtor failed to explain why the creditor, as a legitimate party in interest, should not have been granted relief from the automatic stay. As such, the debtor did not demonstrate a sufficient likelihood of success on the merits.
In the second appeal, the court noted that the debtor had failed to comply with the bankruptcy court’s directive to amend the debt plan and did not address this failure in her appeal. Instead, the debtor focused on alleged unfair treatment and hardship caused by the appellees. The court found these arguments insufficient to demonstrate a likelihood of success.
Furthermore, the court held that while the debtor had some difficulty articulating her claims, this difficulty did not stem from the complexity of the legal issues, which were deemed relatively straightforward. Given the lack of complexity and the debtor’s ability to articulate her claims, the court concluded that no exceptional circumstances warranted the appointment of counsel. Consequently, the court denied both of the debtor’s motions for counsel.
Talk to a Dedicated Bankruptcy Attorney in California
Bankruptcy can provide essential relief from unmanageable debts and help people obtain financial stability and move forward from their lives. If you are facing overwhelming debt and struggling to keep up with payments, understanding your legal rights and the bankruptcy process is critical. A knowledgeable California bankruptcy attorney can help advise you of your options and guide you throughout the process of regaining control of your life. To schedule a consultation, contact us via our online form or call (916) 361-6028.