The United States Trustee has demonstrated the following facts by clear and convincing evidence.
In the fall of 2015, the Debtors decided to file for bankruptcy.
One of the Debtors searched on the internet and found the online cite of Volks Anwalt Law (“Volks”). On September 8, 2015, she contacted Volks, spoke to a Volks representative, agreed to hire the firm, received the Volks Retainer Agreement, signed it, and returned it all on the same day. On September 22, 2015, the Debtors wired $1,615 to Volks, which was the amount Volks required to cover attorney’s fees for the Chapter 7 filing, the Court’s filing fee, and a credit check.
The Volks’ Retainer Agreement promises the following to the Debtors:
— Advising the Client about dischargeability and non-dischargeability of certain debts;
— Advising Client about exemption planning;
— If, after evaluation and consultation, the Client decides to proceed in Chapter 7, preparing and filing the Chapter 7 Bankruptcy Petition, applicable Schedules, Statement of Financial Affairs, and Statement of Current Monthly Income;
— Representing the Client at the 341 Meeting of Creditors;
— Negotiating reaffirmation agreements if supplied by secured creditors and meeting with Client to review and execute the same;
— Negotiating interim trustee’s Motions for Turnover and Objections to Exemptions on behalf of Client.
The Volks’ Retainer Agreement also promised to hold retainer fees paid to Volks in a trust account that “shall only be withdrawn from the Trust account when they are earned by [Volks].” The Retainer Agreement further promised that Volks would send invoices to the Debtors by email. The Retainer Agreement included a term that, “All fees are earned when paid” but also stated that “Client may be eligible for a refund of the filing fee if bankruptcy is stopped prior to the filing date.”
Volks informed the Debtors that it would appoint a Volks attorney in their State to represent them and further advised the Debtors to take a credit counseling course. The Debtors promptly took the credit counseling course on October 5, 2015.
On or about January 16, 2016, attorney Woo contacted the Debtors as Volks’ local bankruptcy attorney. Woo had previously reached an agreement to serve as Volks’ state-based attorney. . Woo provided the Debtors a draft bankruptcy petition, schedules, and statement of financial affairs for their review. The draft bankruptcy documents identified Woo as “Volks Anwalt — Partner.” The Debtors reviewed the drafts and pointed out numerous errors that needed correction.
8) The Debtors contacted Woo in April and May 2016 to find out the status of their filing. Woo gave them assurances about preparations for their case and asked for their patience. But after May 2016, Woo stopped returning the Debtors’ calls and texts. They were also unable to reach anyone at Volks. At some point after May 2016, they did get in touch with Woo who informed them by phone that he could not help them and that they would have to proceed without him.
In December 2016, a collection agency, AR Recovery Solutions, commenced wage garnishment against one of the Debtors in the amount of $82 per week. This continued until their bankruptcy was filed on April 30, 2017. From the start of the garnishment to the date of the bankruptcy filing, the Detbors lost approximately $1,437.
In 2017, the Debtors persisted in their attempts to contact Volks to request a refund. They managed to speak with someone at Volks in January or February 2017 and asked for a refund. Volks did not respond to the requests for a refund.
The Debtors did not receive the advice, the documents, or other services promised by Volks in the Retainer Agreement. Volks did not send any invoices by email, as promised in the Retainer Agreement.
By early 2017, the Detbors had largely given up on Volks fulfilling its obligations, they consulted with bankruptcy attorney Bullard. They hired Mr. Bullard and paid him $1,734 for attorney’s fees plus the filing fee. Mr. Bullard filed the current case on April 30, 2017.