Suing Your Bankruptcy Attorney for Malpractice

Types of Damages

Economic Damages

Economic damages are the most common and most quantifiable type of recovery in bankruptcy malpractice cases. They represent the financial losses directly caused by the attorney's negligence.

• Lost discharge: The total value of debts that would have been discharged but were not due to the attorney's malpractice. If your attorney's negligence caused your case to be dismissed and you still owe $50,000 in unsecured debt that would have been eliminated, that $50,000 represents your economic loss
• Fees paid: Any attorney fees, filing fees, credit counseling fees, and other costs you paid in connection with the failed bankruptcy case
• Property lost: The fair market value of property lost due to the malpractice -- a home foreclosed because the attorney missed a deadline, a vehicle repossessed because the attorney failed to enforce the automatic stay, or personal property liquidated because exemptions were not properly claimed
• Increased debt: Interest, penalties, and fees that accrued on debts that should have been discharged or stayed during the bankruptcy
• Lost wages: Income lost to wage garnishment that resumed after an improper dismissal
• Cost of refiling: If you had to file a second bankruptcy case because of the attorney's failure in the first, the additional fees and costs are recoverable
• Consequential damages: Other financial losses flowing from the malpractice, such as moving costs if you lost your home, rental deposits, or costs of alternative transportation if you lost your vehicle

Non-Economic Damages (Emotional Distress)

Some states allow recovery for emotional distress caused by attorney malpractice. The availability and requirements vary significantly:

• Some states require that emotional distress be accompanied by physical manifestation (sleeplessness, anxiety disorders, depression requiring treatment)
• Some states require proof of intentional or reckless conduct, not mere negligence
• A few states do not allow emotional distress damages in legal malpractice cases at all

The loss of a home or the continuation of crushing debt due to attorney malpractice causes real and significant emotional harm. If your state allows it, document any medical treatment, therapy, or prescription medications related to the stress caused by the malpractice.

Punitive Damages

Punitive damages are rare in legal malpractice cases and typically require proof of intentional misconduct, fraud, or reckless disregard for the client's interests. Examples that might support punitive damages:

• The attorney knowingly filed fraudulent documents
• The attorney converted client funds (stole money held in trust)
• The attorney intentionally concealed the malpractice from the client
• The attorney continued to charge fees while knowing they had abandoned the case

The "Case Within a Case" Doctrine

This is the most challenging aspect of any legal malpractice claim. You must prove not only that your attorney was negligent but also that you would have succeeded in the underlying case if the attorney had performed competently. In other words, you must try the original case as a "case within a case."

For bankruptcy malpractice, this means demonstrating:

• If the attorney had met the deadline, your case would not have been dismissed
• If the attorney had filed under the correct chapter, you would have received a discharge
• If the attorney had properly claimed exemptions, you would have kept the property
• If the attorney had listed all creditors, those debts would have been discharged

This requirement protects attorneys from liability when the client's case would have failed regardless of the attorney's performance. If your Chapter 13 plan was not feasible and would have been dismissed even with competent representation, the attorney's negligence did not cause your loss.

Statute of Limitations

The time to file a malpractice lawsuit varies by state. Most states use a 2-3 year limitation period, but the rules for when that period begins running differ.

Rule	How It Works	States
Discovery rule	Clock starts when you discover (or should have discovered) the malpractice	Most states (majority rule)
Occurrence rule	Clock starts when the negligent act occurs, regardless of when you discover it	A few states
Continuous representation	Clock is tolled while the attorney continues to represent you in the same matter	Many states

Practical Considerations

Contingency Fee Arrangements

Most legal malpractice attorneys work on contingency, meaning they take a percentage of the recovery (typically 33-40%) and charge no upfront fee. This means you pay nothing unless you win. However, malpractice attorneys are selective about the cases they accept because they invest their own time and resources.

Cases with clear liability and significant, quantifiable damages are the strongest candidates for contingency representation. A case involving a lost home worth $200,000 is more likely to attract a contingency attorney than a case involving $2,000 in lost fees.

Alternative Remedies

A malpractice lawsuit is not your only option. Consider these alternatives, which can be pursued simultaneously:

• Fee disgorgement under Section 329(b): Available within the bankruptcy court itself. No separate lawsuit needed. See our Fee Disgorgement guide
• Bar complaint: Free to file. Can result in discipline and, in some states, an order of restitution. See our Bar Complaints guide
• State consumer protection claims: Some states allow consumer protection claims against attorneys, which may provide treble damages or attorney fee shifting
• Fee arbitration: Some state bars offer fee arbitration programs that can resolve fee disputes without litigation

Finding a Malpractice Attorney

For guidance on finding qualified legal malpractice counsel, including what to bring to your initial consultation, see our Finding Help page.