Regina Williams

1
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
REGINA WILLIAMS,
Debtor.
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Case No. 08-00116
(Chapter 13)
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION AND ORDER DENYING FEE APPLICATION
Shortly after the commencement of this case, the debtor’s
counsel filed a Rule 2016(b) statement which disclosed only
$1,000 in payments received. 	She has now filed a fee application
in which she states that she has received $2,000 in payments.
If she received an additional $1,000 after the initial Rule
2016(b) statement was filed, Rule 2016(b) required her to file a
supplemental statement "within 15 days after any payment or
agreement not previously disclosed." 	See In re Taylor, 2004 WL
The Memorandum Decision and Order below is hereby
signed. Dated: July 21, 2008.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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1 	This is true even though a plan was confirmed in this
case because the order confirming that plan provided that the
property of the estate would not vest in the debtor until all
plan payments were completed.
2
1746112, at *1 (Bankr. D.D.C. Aug. 4, 2004). 	Moreover, until
payment of that additional $1,000 was approved by the court, the
attorney was not entitled to collect the same (because it was
estate property), and was obligated to hold the $1,000 in escrow
on behalf of the debtor and subject to the debtor’s direction and
control. 	Id. 1 	As stated in In re Jensen, 2008 WL 2405023, at *4
n.7 (Bankr. E.D. Pa. June 13, 2008):
To receive such a payment without running afoul of the
bankruptcy regulatory scheme, the transaction would
have to be disclosed and counsel would have to maintain
the funds in a trust account until the payment is
allowed by the bankruptcy court. 	In effect, for
administrative convenience, the attorney would simply
be segregating funds that remained property of the
debtor (and the bankruptcy estate); upon demand by the
debtor, the attorney would be obliged to transfer the
money in the trust account back to the debtor.
If the attorney received $1,000 and was holding it in escrow on
behalf of, and subject to the direction of, the debtor, she
should have disclosed in a supplemental Rule 2016(b) statement
that she was so holding the funds, and she ought not have
collected the $1,000 towards payment of her fees unless and until
authorized by order of the court.
At this juncture, the debtor’s counsel has not been given an
opportunity to respond regarding whether there was a violation.
The original Rule 2016(b) statement may have been in error
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instead of an additional $1,000 being received later. 	In any
event, because of the discrepancy with the Rule 2016(b)
statement, I will deny the fee application without prejudice,
with the issue of addressing any violation to await the filing of
an amended fee application.
If, indeed, there was a subsequent receipt of another
$1,000, the debtor’s counsel should either return the $1,000 to
the debtor or place the $1,000 received postpetition into a trust
account subject to the direction of the debtor as to its
disposition unless and until the court authorizes payment of any
fees from that $1,000. 	In any event, the debtor’s counsel needs
to file an amended Rule 20169b) statement. 	It is thus
ORDERED that the pending fee application is denied without
prejudice, and within 15 days of entry of this order the debtor’s
counsel shall file an amended Rule 2016(b) statement. 	It is
further
ORDERED that for 90 days after entry of this Memorandum
Decision and Order, the clerk shall post a copy outside the
meeting of creditors’ room and outside the court’s courtroom.
[Signed and dated above.]
Copies to: Debtor; Debtor’s attorney; Chapter 13 Trustee; Office
of United States Trustee.
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