Attorney BS Leads Homeowner Seeking Foreclosure Defense To Unwittingly Find Himself In Bankruptcy Court?

In Westchester County, New York, The Journal News reports:

• When the Yonkers home where his parents lived was threatened with foreclosure, Domingo Hernandez went to White Plains lawyer Christopher Cabanillas to fight the proceedings. Cabanillas told him that his firm had a "special program" designed to hold off foreclosure proceedings for up to two years. The "special program" used a legal defense against foreclosure combined with modification of the mortgage loan. Hernandez agreed to a $7,500 retainer for Cabanillas and the special program and on March 9 gave the lawyer $1,250. But instead of a "special program," Cabanillas put Hernandez in bankruptcy, filing a petition for Chapter 7 bankruptcy in White Plains on Oct. 1 — all without Hernandez’s knowledge or permission. Those charges are contained in papers filed by Hernandez in U.S. Bankruptcy Court in White Plains that seek sanctions against Cabanillas.

• "At no time did attorney Christopher Cabanillas or anyone at the law firm Cabanillas and Associates advise, suggest, or otherwise tell me that filing a false petition was part of their ‘special program’ or that filing for bankruptcy would be part of defending me in the foreclosure matter," Hernandez wrote in court papers. He has a new lawyer, and she filed papers asking for the withdrawal of the bankruptcy filing.(1)

For more, see Owner of Yonkers home says lawyer put him in bankruptcy without permission.

For follow-up story, see Judge: Lawyer wrongly submitted bankruptcy documents.

(1) Reportedly, the petition was filed by attorney Cabanillas without Hernandez’s required signature. According to the story, the U.S. Trustee’s Office, which oversees compliance with bankruptcy laws, has filed papers in the case recommending that Cabanillas be sanctioned. "The Cabanillas Firm has engaged in egregious conduct that directly impacts on the integrity of the bankruptcy system by filing a Chapter 7 petition without obtaining a signature of its client prior to filing the petition," wrote Greg Zipes, a lawyer for the U.S. Trustee’s Office in Manhattan. Zipes said the filing was "not an isolated case of misconduct by the Cabanillas Firm."

In a letter to Cabanillas, he noted two other cases where bankruptcy petitions "do not appear to meet professional standards." In an e-mail to Zipes filed with the court, Hernandez’s new lawyer, Linda Tirelli, said Hernandez "comes across as a very calm, level-headed person but is clearly upset about having the petition filed unbeknownst to him." The e-mail also says Hernandez never met the lawyer from Cabanillas’ firm, Jan Hudgins-Riley, listed as his attorney on the filing, never saw or signed the petition and never retained Cabanillas’ firm for bankruptcy purposes. Tirelli said in the e-mail that Hernandez would likely need to file a Chapter 13 bankruptcy — which provides for a scheduled repayment of debts — rather than a Chapter 7 filing — which requires liquidation of petitioners’ non-exempt assets.