In 2008, Debtor retained attorney MaGee to file her chapter 13 petition. The confirmation order from her chapter 13 plan stated that, “the debtor shall inform the Trustee of any changes in circumstances or receipt of additional income…” In 2009, Debtor was involved in an automobile accident and reached a settlement of $25,000 on her Third Party Claim. In 2010, Debtor sued her own insurer and was awarded $50,000 in 2011. Debtor never disclosed either claim to the chapter 13 trustee or the bankruptcy court, but according to her, Attorney MaGee informed her not to worry about the claims because the chapter 13 trustee’s office was unlikely to catch any failure to disclose. The Ninth Circuit Bankruptcy Appellate Panel upheld sanctions of $2,685 against MaGee for advising the debtor not to disclose to the chapter 13 trustee a post-confirmation car accident recovery.
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