Hessinger & Associates v. U.S. Trustee

Chapter 7 of the Bankruptcy Code (the “Code”) provides for the discharge of all the debtor’s pre-petition debts save those expressly excepted from discharge by the Code. In this case we must decide whether an installment contract for pre-petition legal services, which calls for all fee payments to be made post-petition, is dischargeable under 11 U.S.C. § 727 . We have jurisdiction under 28 U.S.C. §§ 158 (d) and 1291. We hold that the fee agreement at issue creates a pre-petition debt, which is dischargeable under the Code.

FACTS

Jennifer Biggar, Donna Martinez and Martin Clark each retained Hessinger and Associates (“Hessinger”) to represent them in their respective liquidation proceedings. Hessinger and each debtor entered into a fee agreement which specified that payment for pre-petition services was to be made in monthly installments after the petition was filed.

The United States Trustee (the “Trustee”) moved for review of Hessinger’s fees. In ruling on the Trustee’s motion, the bankruptcy court first determined that the debts arising from Hessinger’s pre-petition services constituted pre-petition claims. The court then held that these claims were discharged along with the…