Arlene Huff

1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
In re: 	: 	Case No. 2:24-bk-54407
Arlene Huff, 	: 	Chapter 7
Debtor. 	: 	Judge Nami Khorrami
______________________________________________________________________________
MEMORANDUM OPINION GRANTING IN PART AND DENYING
IN PART MOTION TO DETERMINE EXCESSIVENESS AND
UNREASONABLENESS OF FEES UNDER 11 U.S.C. § 329(b) (DOC. 19)
______________________________________________________________________________
I. 	Introduction
Andrew R. Vara, the United States Trustee for Regions 3 and 9 (the “U.S. Trustee”), has
filed a motion1 asking the Court to order the return of fees paid by the debtor, Arlene Huff (“Ms.
1 Motion To Determine Excessiveness And Unreasonableness Of Fees Under 11 U.S.C. § 329(b) (Doc. 19) (the
“Motion”). Gardner Legal, LLC d/b/a Option 1 Legal (“Option 1 Legal”) opposed the Motion by filing a Response
To U.S. Trustee’s Motion To Determine Excessiveness (Doc. 23) (the “Response”). The U.S. Trustee filed a Reply To
Response To Motion To Determine Excessiveness And Unreasonableness Of Fees Under 11 U.S.C. § 329(b) (Doc.
23) (Doc. 27) (the “Reply”).
________________________________________________________________
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: November 25, 2025
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Huff”), to Option 1 Legal. 	Ms. Huff retained Option 1 Legal in July 2019 to provide debt
settlement services in connection with certain credit card debts. Over the next four years, Option
1 Legal reached settlements with Ms. Huff’s creditors and paid those settlements, and the fees of
Option 1 Legal, out of funds that Ms. Huff paid monthly. Ms. Huff ultimately filed this chapter 7
case on October 31, 2024 (the “Petition Date”). The U.S. Trustee now asks this Court to review
for reasonableness Option 1 Legal’s fees under 11 U.S.C. § 329(b) and Rule 2017(a) of the Federal
Rules of Bankruptcy Procedure (the “Bankruptcy Rules”).
A hearing was held on the Motion, the Response, and the Reply on August 13, 2025 (the
“Hearing”). The evidence submitted to the Court was presented by stipulation (the “Stipulations”).
Am. Stip., Dkt. No. 38.2 	The Hearing proceeded as an oral argument based on the stipulated
record.3 At the Hearing, the Court granted Option 1 Legal’s request to file a supplemental brief
regarding the scope of § 329(b) and subsequently entered an agreed order setting the briefing
schedule. Am. Agreed Order Setting Briefing Schedule, Dkt. No. 41. Briefing was completed on
September 10, 2025, and the matter is now ripe for decision.4 For the reasons which follow, the
Motion is granted in part and denied in part.
II. 	Findings of Fact
Ms. Huff met with Catherine DeLong (“Ms. DeLong”), a representative of Option 1 Legal,
at a McDonald’s restaurant in Carrollton, Ohio on July 24, 2019. Am. Stip. ¶ 3. At the meeting,
Ms. DeLong showed Ms. Huff a PowerPoint presentation (the “PowerPoint”) regarding the
2 In addition to the stipulated facts, the parties also stipulated to the admissibility of Exhibits 1-4, which were admitted
at the Hearing. As contemplated by Paragraphs 31-35 of the Stipulations, at the request of the parties, the Court took
judicial notice of Ms. Huff’s Schedules E/F and I as well as the Statement of Financial Affairs, all of which were filed
with the Petition. Am. Stip. ¶¶ 30-35; Petition 18, 26, 31, Dkt. No. 1.
3 The U.S. Trustee was represented by Laura Atack. Option 1 Legal was represented by Timothy Elliott. Ms. Atack
appeared in person. With leave of the Court, Mr. Elliott appeared via Zoom video.
4 Gardner Legal, LLC’s Supplemental Brief (Doc. 43) (the “Option 1 Legal Supplemental Brief”); Post-Hearing Brief
In Support Of Motion To Determine Excessiveness And Unreasonableness Of Fees Under 11 U.S.C. § 329(B) (Doc.
19) (Doc. 44) (the “U.S. Trustee Supplemental Brief”).
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services offered by Option 1 Legal. Id. ¶ 4; Ex. 1.5 Ms. Huff decided to retain Option 1 Legal to
negotiate settlements with specific credit card creditors and to provide litigation defense if she
were sued by those creditors. Am. Stip. ¶ 2. 	She signed an agreement (the “Client Retainer
Agreement”) retaining Option 1 Legal on July 24, 2019. Id. ¶¶ 5-6.6
Between August 2019 and December 2023, Ms. Huff paid Option 1 Legal $6,710.99 in
fees. Am. Stip. ¶¶ 21-22. Ms. Huff also paid $970.45 in account fees for the dedicated account
used to fund her payments. Id. ¶ 23. Option 1 Legal negotiated eight settlements on Ms. Huff’s
accounts. 	Id. ¶ 25. 	Of a total 	original debt amount of $17,926.88, Option 1 Legal negotiated
$8,228.41 in debt reduction, for a total settled debt amount (the “Settled Amount”) of $9,699.07.
7 Id. Of the Settled Amount, Ms. Huff paid a total of $8,877.27. Id. ¶ 27. The amounts paid by
Ms. Huff for legal fees to Option 1 Legal ($6,710.99), account fees ($970.45), and the debt
settlement amounts ($8,877.27) totaled $16,558.71. Id. ¶¶ 22, 23, and 27. Option 1 Legal also
provided litigation defense and settled a collection lawsuit filed in the Carroll County Municipal
Court. 	Id. ¶ 28. 	While the parties have stipulated that none of the debts included in the Client
Services Agreement appear on Ms. Huff’s bankruptcy schedules, they have also stipulated that
two settlements reached by Option 1 Legal, Second Round LP ($797.00 unpaid) and Portfolio
Recovery ($25.00 unpaid), were not paid in full. Am. Stip. ¶ 27, 33.
Option 1 Legal does not maintain time records for any of the services it provides to its
clients, and this is true for the services it provided to Ms. Huff. Am. Stip. ¶ 29. As a result, there
5 A copy of the PowerPoint presentation was admitted into evidence as Exhibit 1. It reflects what purports to be Ms.
Huff’s initials at the bottom of each page, and the parties stipulated that those initials were placed on Exhibit 1 by Ms.
Huff. Am. Stip. ¶ 4.
6 A copy of the Client Retainer Agreement was admitted into evidence as Exhibit 2.
7 There is a sixty-cent discrepancy in the column titled “Difference” in Paragraph 25 of the Stipulations. The parties
stipulated that the difference between the original amount of the debt ($17,926.88) and settled amount of the debt
($9,699.07) was $8,228.41. Am. Stip. ¶ 25. However, $17,926.88 - $9,699.07 is $8,227.81, not $8,228.41. Because
the discrepancy is not material, and because it is not apparent which is the correct figure, the Court will utilize the
figures contained in the Stipulations.
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is no evidence regarding how much time Option 1 Legal expended on behalf of Ms. Huff. Ms.
Huff filed her bankruptcy under chapter 7 on October 31, 2024. 	Am. Stip. ¶ 30. 	Ms. Huff’s
Schedules I and J reflect that she has monthly income of $1,589 and expenses of $1,535.66, leaving
monthly net income of $53.34. Am. Stip. ¶ 31. 	Ms. Huff’s Schedule E/F reveals that she had
$32,586 in general unsecured debt as of the Petition Date. Am. Stip. ¶ 32. The creditor names
and account numbers that were settled by Option 1 Legal under the Client Retainer Agreement do
not appear in Ms. Huff’s bankruptcy schedules. Am. Stip. ¶ 33. Ms. Huff received a discharge on
February 11, 2025. Am. Stip. ¶ 34.
Option 1 Legal also asserted in its Response and at the Hearing that, of the $6,710.99 in
fees that it received, only $106.95 of them were received within the year before the Petition Date.
Option 1 Legal’s Resp. 3, Dkt. No. 23. 	The U.S. Trustee does not dispute this assertion. 	U.S.
Trustee’s Reply 3, Dkt. No. 27.8
III. 	Contentions of the Parties
The U.S. Trustee asserts that 11 U.S.C. § 329(b) and Bankruptcy Rule 2017 give the Court
the authority to review all fees paid to Option 1 Legal dating back to when Ms. Huff signed the
Client Services Agreement in July 2019. He asserts that all services performed by Option 1 Legal
were either in contemplation of or in connection with this bankruptcy case, and that the one-year
provision in § 329 does not limit the scope of the Court’s review. The U.S. Trustee further asserts
that, because Ms. Huff received the benefit of $8,228.41 in debt reduction but had to pay $6,710.99
in fees to Option 1 Legal (plus $970.45 in monthly account fees) to get that benefit, the fees paid
8 Exhibit 3 confirms that in the year prior to the Petition Date (from October 31, 2023, to October 31, 2024), Option
1 Legal received a $55 fee payment on November 24, 2023, two “settlement fees” of $8 each on November 27, 2023,
an “ancillary fee” of $19.95 on December 17, 2023, and two “settlement fees” of $8 each on December 28, 2023, for
a total of $106.95. Ex. 3 at 11. The parties stipulated that these categories make up the fees received by Option 1
Legal. Am Stip. ¶ 22 n.3. The Court will accordingly use $106.95 as the amount of fees paid to Option 1 Legal after
October 31, 2023.
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to Option 1 Legal are excessive and unreasonable. 	The U.S. Trustee did not articulate what he
views as the reasonable value of the services provided or request that the Court order the return of
a specific amount from Option 1 Legal but left that for the Court to determine. 	U.S. Trustee’s
Suppl. Br. 3, Dkt. No. 44.
Option 1 Legal disputes that any return of fees is appropriate here. It argues that the one-
year provision of § 329 precludes the return of any fees other than the $106.95 paid from October
31, 2023, to October 31, 2024. It argues that none of its services were rendered in connection with
Ms. Huff’s bankruptcy case, given that Ms. Huff’s schedules do not list any of the creditors whose
claims were listed in the Client Services Agreement. It further argues that the “in contemplation
of” provision in § 329 is not applicable. 	To the extent that Bankruptcy Rule 2017 contains
language expanding the time or scope of review of fees beyond that allowed by § 329, it argues
that this violates the Rules Enabling Act, 28 U.S.C. § 2075. Finally, Option 1 Legal asserts that it
did what it promised Ms. Huff it would do, and for approximately the price it had estimated, and
therefore it asserts that the fees it received were reasonable notwithstanding the lack of
contemporaneous time records.
IV. 	Legal Analysis
A. Jurisdiction
The Court has jurisdiction over this matter under 28 U.S.C. § 1334 and the Amended
General Order 05-02 entered by the United States District Court for the Southern District of Ohio,
referring all bankruptcy matters to this Court. Motions brought pursuant to 11 U.S.C. § 329(b) and
Federal Rule of Bankruptcy Procedure 2017 are core proceedings because they are matters
affecting the administration of the bankruptcy estate under 28 U.S.C. § 157(b)(2)(A) and (O). In
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re Rosales, 621 B.R. 903, 912 (Bankr. D. Kan. 2020). Venue is proper before this Court under 28
U.S.C. §§ 1408 and 1409.
Although Option 1 Legal does not dispute the Court’s jurisdiction, it asserts that the
requirement of “in contemplation of or in connection to the case” in § 329 limits the Court’s
jurisdiction such that services that do not meet § 329’s requirement are beyond the Court’s
jurisdiction to review. 	Option 1 Legal Suppl. Br. 1, Dkt. No. 43 (citing In re Walters, 868 F.2d
665 (4th Cir. 1989) (“Certain services by attorneys, it is true, are so unconnected to bankruptcy
that the bankruptcy court has no jurisdiction to review them under § 329.”); Roland v. Unum Life
Ins. Co. of Am., 223 B.R. 499, 503 n.9 (E.D. Va. 1998)).). 	These cases suggest that whether
prepetition fees are sufficiently related to the bankruptcy case to satisfy § 329’s “in contemplation
of or in connection with the case” requirement is a jurisdictional issue. Id. Even so, both these
cases predate the Supreme Court’s efforts, which started in earnest in 2006, to become “more
disciplined in our use of the term ‘jurisdictional.’” Riley v. Bondi, 606 U.S. 259, 275, 145 S. Ct.
2190, 2202, 222 L. Ed. 2d 497 (2025) (citing Arbaugh v. Y & H Corp., 546 U.S. 500, 511, 126
S.Ct. 1235, 163 L.Ed.2d 1097 (2006)). Under this approach, the requirements in § 329 are properly
viewed as merits-based elements of a claim rather than limits upon the Court’s jurisdiction.
In Arbaugh, the Supreme Court recognized that it had been imprecise in use of the term
“jurisdictional” in the past. 	As a result, “subject matter jurisdiction in federal-question cases is
sometimes erroneously conflated with a plaintiff's need and ability to prove the defendant bound
by the federal law asserted as the predicate for relief—a merits-related determination.” 546 U.S.
at 511 (citation modified).9 Accordingly, the court held that unless “the Legislature clearly states
9 Arbaugh involved Title VII of the Civil Rights Act of 1964, which defines an “employer” to mean someone who
employs fifteen or more employees. The court held that the provision was not jurisdictional but an element of the
plaintiff’s claim on the merits. 546 U.S. at 516.
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that a threshold limitation on a statute's scope shall count as jurisdictional,” courts should treat
those limitations as elements of the claim for relief. 	Id. at 516.10 	And the Supreme Court has
subsequently cautioned against the use of “old lower court cases that predate our effort to bring
some discipline to the use of the term ‘jurisdictional.’” MOAC Mall Holdings LLC v. Transform
Holdco LLC, 598 U.S. 288, 304, 143 S. Ct. 927, 215 L. Ed. 2d 262 (2023).
MOAC’s caution applies with full force in this case. 	Here, the Motion asserts a claim
created by § 329(b). Therefore, bankruptcy jurisdiction exists under 28 U.S.C. § 1334(b) because
the Motion asserts a claim under 11 U.S.C. § 329(b). 	A claim arises under title 11 when it is
“created or determined by a statutory provision of title 11.” Mich. Emp. Sec. Comm'n v. Wolverine
Radio Co. (In re Wolverine Radio Co.), 930 F.2d 1132, 1144 (6th Cir. 1991); Redhawk Glob., LLC
v. World Projects Int'l, 495 B.R. 368, 374 (S.D. Ohio 2013). Claims based upon § 329 arise under
title 11. 	In re Aquilino, 135 F.4th 119, 130-131 (3rd Cir. 2025). And there is no indication in
§ 329 or elsewhere that Congress intended a departure from this standard jurisdictional analysis
regarding claims based upon § 329(b).
Therefore, the Court holds that the provisions of § 329 establish elements of a claim rather
than limits upon the Court’s jurisdiction. That is not to say that the concerns expressed in Roland
and Walters that attorney fees be sufficiently related to the bankruptcy case can be dismissed or
ignored. It simply means that those concerns are not jurisdictional but relate to the merits of how
§ 329(b) should be applied. The Court now turns to those issues.
B. Burden of Proof
Defining the burden of proof under § 329(b) and Bankruptcy Rule 2017 is somewhat
complicated. Where the attorney’s fees are challenged, the burden is on the attorney to show that
10 The Supreme Court recently noted that it has almost never found a statute that satisfies Arbaugh’s “very demanding
test.” Riley, 606 U.S. at 275 (collecting cases).
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they are reasonable. Thomas v. Robinson (In re Robinson), 189 F. App’x 371, 374 (6th Cir. 2006).
The parties have not cited, and the Court has been unable to locate, any cases assigning the burden
of proof on the antecedent question presented here of whether § 329 applies at all. Robinson stated
that “the burden of proof on all issues under 11 U.S.C. § 329 is on the attorney, and it is the
attorney's burden to come forward with the appropriate proof, such as the fee schedule, to establish
that the fee is reasonable.” 189 F. App’x at 374. That said, in Robinson, the attorney had appeared
on behalf of the debtor during the bankruptcy case so there was no question that § 329 applied,
and the Sixth Circuit’s statement must be understood in that context. And the general rule is that
the party seeking to alter the status quo bears the burden of proof. See, e.g., In re Brumley, 570
B.R. 287, 289 (Bankr. W.D. Mich. 2017); In re Energy Conversion Devices, Inc., 474 B.R. 503,
508 (Bankr. E.D. Mich. 2012). Therefore, the Court concludes that the U.S. Trustee here has the
burden of showing that § 329(b) and Bankruptcy Rule 2017 apply. If the U.S. Trustee carries that
burden, Option 1 Legal bears the burden of showing that its fees were reasonable.
C. Overview of 11 U.S.C. § 329
The first legal basis for the Motion is 11 U.S.C. § 329, which provides as follows:
(a) 	Any attorney representing a debtor in a case under this title, or in connection
with such a case, whether or not such attorney applies for compensation
under this title, shall file with the court a statement of the compensation paid
or agreed to be paid, if such payment or agreement was made after one year
before the date of the filing of the petition, for services rendered or to be
rendered in contemplation of or in connection with the case by such
attorney, and the source of such compensation.
(b) 	If such compensation exceeds the reasonable value of any such services, the
court may cancel any such agreement, or order the return of any such
payment, to the extent excessive, to—
(1) 	the estate, if the property transferred—
(A) 	would have been property of the estate; or
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(B) 	was to be paid by or on behalf of the debtor under a plan
under chapter 11, 12, or 13 of this title; or
(2) 	the entity that made such payment.
“The provisions of the Bankruptcy Code and the Bankruptcy Rules that regulate attorney
fees are designed to protect both creditors and the debtor against overreaching attorneys.”
Henderson v. Kisseberth (In re Kisseberth), 273 F.3d 714, 720 (6th Cir. 2001); see also In re
Campbell, 259 B.R. 615, 625 (Bankr. N.D. Ohio 2001) (“This section was enacted because
payments to a debtor's attorney provide serious potential for evasion of creditor protection
provisions of the bankruptcy laws, and serious potential for overreaching by the debtor's attorney,
and should be subject to careful scrutiny.”) (citation modified).11
Section 329(a) accordingly requires attorneys to make disclosures of fees that they have
received. In particular, its disclosure requirement applies to “any attorney representing a debtor
in a case under this title, or in connection with such a case, whether or not such attorney applies
for compensation under this title . . . .” 11 U.S.C. § 329(a). Such attorneys “shall file with the
court a statement of the compensation paid or agreed to be paid, if such payment or agreement was
made after one year before the date of the filing of the petition.” 	Id. 	And this statement must
disclose any compensation “for services rendered or to be rendered in contemplation of or in
connection with the case by such attorney, and the source of such compensation.” 	Id. 	In turn,
§ 329(b) complements this disclosure obligation by authorizing bankruptcy courts to order the
return of those payments that are unreasonable or excessive: “[i]f such compensation exceeds the
reasonable value of any such services, the court may cancel any such agreement, or order the return
of any such payment, to the extent excessive . . . .” 11 U.S.C. § 329(b).
11 Section 329 is the successor to section 60d of the Bankruptcy Act of 1898. See In re Rheuban, 121 B.R. 368, 375-
379 (Bankr. C.D. Cal. 1990).
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Although given a broad and expansive construction, § 329’s language establishes that it is
not unlimited. Barron v. Countryman, 432 F.3d 590, 595 (5th Cir. 2005) (“While these provisions
are potent, they are not limitless”); see also Walters, 868 F.2d at 667 (noting that some services
“are so unconnected to bankruptcy” that they are not subject to review under § 329); In re Swartout,
20 B.R. 102, 106 (Bankr. S.D. Ohio 1982) (same). Those limits are established by § 329’s text,
which references payments made or agreed to after one year before the petition was filed, and
payments that are for services rendered “in contemplation of or in connection with the case.”
D. The $106.95 Paid to Option 1 Legal After October 31, 2023, Was For Services
Rendered In Contemplation of and In Connection With This Bankruptcy
Case.
“[M]ost courts have interpreted 	the operative phrase—‘in contemplation of or 	in
connection with’—as incorporating two different concepts and have applied different standards
under each sub-phrase.” In re Mayeaux, 269 B.R. 614, 622 (Bankr. E.D. Tex. 2001) (collecting
cases).
“A fee payment is made ‘in contemplation of’ a bankruptcy case if the underlying
professional services were rendered at a time when the debtor was contemplating bankruptcy.”
Mayeaux, 269 B.R. at 622. This is a subjective test based on the debtor’s mental state. Id. “[T]he
controlling question is with respect to the state of mind of the debtor and whether the thought of
bankruptcy was the impelling cause of the transaction.” Schilling v. Heavrin (In re Triple S. Rests.,
Inc.), 130 F. App’x 766, 772 (6th Cir. 2005) (quoting Conrad, Rubin & Lesser v. Pender, 289 U.S.
472, 477-78, 53 S. Ct. 703; 77 L. Ed. 1327 (1933)).12 	In this regard, “negotiations to prevent
bankruptcy may demonstrate that the thought of bankruptcy was the impelling cause of payment.
12 Given that the phrase “in contemplation of” appears in both § 60d and § 329, the Sixth Circuit has used caselaw
under § 60d to interpret § 329. Schilling v. Heavrin (In re Triple S. Rests., Inc.), 130 F. App’x 766, 772 (6th Cir.
2005).
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A man is usually very much in contemplation of a result which he employs counsel to avoid.”
Schilling, 130 F. App’x at 772 (quoting Pender, 289 U.S. at 479).
“In connection with” the bankruptcy case is generally a more objective inquiry. In re Keller
Fin. Servs. of Fla., Inc., 248 B.R. 859, 878-79 (Bankr. M.D. Fla. 2000). “The phrase may include
services related to the precipitating cause of the bankruptcy, or services which are inextricably
intertwined with the bankruptcy.” Id.; In re Campbell, 259 B.R. 615 (Bankr. N.D. Ohio 2001); In
re Busetta-Silva, 314 B.R. 218 (B.A.P. 10th Cir. 2004).
The two standards thus ask similar questions but from different perspectives. 	The
subjective test asks whether the thought of bankruptcy was the “impelling factor” in the debtor’s
mind when the services were performed. Schilling, 130 F. App’x at 772. The objective test simply
asks whether the services were related to the “precipitating cause” of the bankruptcy. Keller, 248
B.R. at 878-79. Both “in contemplation of” and “in connection with” are broadly interpreted. See,
e.g., In re Laferriere, 286 B.R. 520, 528 (Bankr. D. Vt. 2002) (“Just as the courts give broad
interpretation to the phrase ‘in contemplation of,’ bankruptcy courts also find the phrase ‘in
connection with’ to have a broad scope.”) (citing In re Ostas, 158 B.R. 312, 321 (N.D.N.Y. 1993));
In re Storey, No. 08–00198, 2009 WL 2855819, at *2 (Bankr. D.D.C. June 29, 2009) (collecting
cases).
The Court finds that the payments made to Option 1 Legal were for services in
contemplation of this bankruptcy case. The only evidence admitted to the Court regarding whether
Ms. Huff was contemplating bankruptcy is that the Client Services Agreement contains two pages
of discussion and disclosures that discuss the possibility of bankruptcy as an alternative to debt
settlement. Ex. 2 at 22 (“As you have indicated in your compliance review, you prefer Option 1
to attempt debt negotiation as an alternative to bankruptcy or other options.”). Evidence of this
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nature has been found sufficient to demonstrate that debt settlement fees were paid “in
contemplation of” bankruptcy. Hearn v. Persels & Assocs., PLLC (In re Hearn), No. 10–09116,
2011 WL 5357849, at *5 (Bankr. M.D.N.C. Nov. 4, 2011) (holding that fees paid for a debt
settlement program were in contemplation of the bankruptcy case based upon provisions in firm’s
retainer agreement that debtor was pursuing debt settlement “to avoid filing for bankruptcy”).
Because the debt settlement plan was being used as an alternative to bankruptcy, the Court
concludes that these payments were made in contemplation of bankruptcy.
Further, the fees paid by Ms. Huff to Option 1 Legal were paid “in connection with the
case.” “[This] phrase may include services related to the precipitating cause of the bankruptcy . . .
.” In re Campbell, 259 B.R. 615, 626 (Bankr. N.D. Ohio 2001). 	And while the Court does not
have evidence regarding the specific debts that were the precipitating cause that led Ms. Huff to
file bankruptcy, her Schedules E/F and I make clear that she was indebted far beyond her ability
to repay her debts based on her meager income. While Option 1 Legal was not addressing all of
Ms. Huff’s debts, it was still working to pay off those debts listed in the Client Services Agreement
not yet paid.13 This fits within the broad and extensive interpretation of “in connection with” under
§ 329. See In re Brown, No. 09–44254, 2011 WL 477822, at *9 (Bankr. D. Maine Feb. 7, 2011)
(holding that debt settlement fees paid almost a year before the bankruptcy “were unquestionably
paid in connection with Brown's bankruptcy case”). Lacking any evidence as to which, , of Ms.
Huff’s debts were the “precipitating cause” of her bankruptcy, the Court must conclude that all of
them were – and therefore Option 1 Legal’s efforts to try to resolve some were rendered in
connection to the case.
13 As mentioned earlier two settlements reached by Option 1 Legal, namely Second Round LP ($797.00 unpaid) and
Portfolio Recovery ($25.00 unpaid), were not paid in full. Am. Stip. ¶ 27.
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Option 1 Legal argues that its services are so far removed in time from the bankruptcy that
those services could not have been rendered “in contemplation of or in connection with the case.”
Option 1 Legal Suppl. Br. 4-5, Dkt. No. 43. However, the settlements arranged by Option 1 Legal
were never fully paid. 	Am. Stip. ¶ 27. 	The unpaid settlements continued to be a financial
obligation for Ms. Huff in late 2023. The remaining payments on the settlements, after all, were
as much a part of Ms. Huff’s unsecured debt load as the new debt she incurred after signing the
Client Services Agreement in August 2019. Accordingly, the Court concludes that the services
rendered by Option 1 Legal were in connection with the bankruptcy case. Having found that the
services provided by Option 1 Legal were both “in contemplation of and in connection to the case,”
the Court now turns to the one-year provision in § 329.
E. Section 329(b)’s Reachback Period Is Limited To One Year Before the Filing
of the Petition Unless Compelling Equitable Circumstances Warrant the
Application of Equitable Tolling.
Section 329(a) contains a critical timing provision: “if such payment or agreement was
made after one year before the date of filing of the petition . . . .” Although § 329(a) is a disclosure
provision, its one-year limitation is relevant here because § 329(b)’s references to “such
compensation,” “such agreement,” and “such payment” all refer to those terms as they are used in
§ 329(a). See In re Rheuban, 121 B.R. 368, 377 (Bankr. C.D. Cal. 1990) (noting that “such,” under
the commonly accepted rules of grammar, refers to the immediately previous use of the term it
modifies) (citing H.W. Fowler, A Dictionary of Modern English Usage, 602 (2nd ed. 1965)).14
And the last usage of the term “payment” that precedes its use in § 329(b)’s “order the return of
any such payment” is § 329(a)’s phrase “if such payment or agreement was made after one year
14 “[B]ecause words are to be given the meaning that proper grammar and usage would assign them, the rules of
grammar govern statutory interpretation unless they contradict legislative intent or purpose.” Nielsen v. Preap, 586
U.S. 392, 407-08, 139 S. Ct. 954, 203 L. Ed. 2d 333 (2019).
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before the date of the filing of the petition.” Thus, as a matter of grammar, § 329(b) incorporates
§ 329(a)’s one-year lookback period. The limited caselaw under § 329(b), however, has not fully
adopted this grammatical interpretation, finding that § 329(b) is subject to a presumptive but not
absolute one-year limit.
The leading case is Arens v. Boughton (In re Prudhomme), 43 F.3d 1000, 1002-03 (5th Cir.
1995), and there are several bankruptcy court decisions that rely upon it.15 Prudhomme holds that
the one-year provision of § 329(a) does not provide an absolute limit on the disgorgement under
§ 329(b). 	But Prudhomme does not hold that the one-year provision in § 329 can simply be
ignored. Rather, it holds that the one-year provision creates a presumptive limit of one year. 43
F.3d at 1003 (citing 2 C OLLIER ON B ANKRUPTCY ¶ 329.03 (Lawrence P. King ed., 15th ed.).
According to Prudhomme, this presumption can be rebutted under principles of equitable tolling
where the attorney has engaged in fraud, concealment, or similar misconduct. 43 F.3d at 1003.
The U.S. Trustee relies upon Prudhomme and its progeny as the basis for the Court to reach
back more than a year before the Petition Date. 	U.S. Trustee Reply 3, Dkt. No. 27. 	The U.S.
Trustee does not assert any basis for equitable tolling to exceed § 329’s one-year limit as required
by Prudhomme, 43 F.3d at 1003. U.S. Trustee Reply 3, Dkt. No. 27. At the Hearing, Option 1
Legal’s counsel agreed that the one-year provision in § 329 is not an absolute limit but argued that
the evidence in this case does not support any exception to that limit.
The Court agrees with Option 1 Legal. 	The one-year provision in § 329 must mean
something – it cannot simply be ignored. “Congress expresses its purpose by words. It is for us to
ascertain—neither to add nor to subtract, neither to delete nor to distort.” Bd. of Educ. of Hendrick
15 These cases include In re Hanawahine, 577 B.R. 573, 578 (Bankr. D. Haw. 2017); In re Glemaud, No. 11–31697,
2013 WL 4498677, at *10 (Bankr. D. Conn. Aug. 21, 2013); and In re Laferriere, 286 B.R. 520, 526 (Bankr. D. Vt.
2002). Based on the parties’ briefing and the Court’s independent research, the proper application of § 329’s one-year
provision appears to be an issue of first impression for courts within the Sixth Circuit.
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Hudson Cent. Sch. Dist, Westchester Cnty. v. Rowley, 458 U.S. 176, 190 n.11, 102 S. Ct. 3034, 73
L. Ed. 2d 690 (1982) (quoting 62 Cases, More or Less, Each Containing Six Jars of Jam v. United
States, 340 U.S. 593, 596, 71 S. Ct. 515, 95 L. Ed. 566 (1951)). Put another way, a statute must
be applied so that each part has “work to do.” Feliciano v. DOT, 605 U.S. 38,, 52, 145 S. Ct. 1284,
221 L. Ed. 2d 712 (2025) (“Linguistically, our reading leaves no part of the statute ignored or left
without work to do.”).
Equitable tolling is typically applied in special circumstances. “We apply equitable tolling
sparingly, meaning that absent compelling equitable considerations, a court should not extend
limitations by even a single day.” Bozzo v. Nanasy, No. 25-1199, __ F.4th ___, 2025 U.S. App.
LEXIS 27073, at *10, 2025 WL 2945609, at *4 (6th Cir. Oct. 17, 2025) (citation modified)
(quoting Graham – Humphreys v. Memphis Brooks Museum of Art, Inc., 209 F.3d 552, 560-61
(6th Cir. 2000)). 	Here, the U.S. Trustee, as the party asserting that equitable tolling should apply,
needed to show compelling factual circumstances to support that assertion. The U.S. Trustee has
neither identified nor established, any compelling equitable considerations in this case that are
akin to the facts in Prudhomme, Laferriere, or Hanawahine. 16 	He does not assert any
concealment, 	fraud, 	or 	any 	other 	facts 	that 	would 	demonstrate 	“compelling 	equitable
circumstances.” Without a factual basis, this Court cannot justify reaching back beyond the one-
year limitation asserted in § 329.
16 Prudhomme and its progeny all involved significant misconduct beyond that established in this case. In Prudhomme,
not only did counsel to a chapter 11 debtor fail to fully disclose the retainers received from the debtor prepetition, the
evidence showed “that counsel hurt the debtors more than helped them.” 43 F.3d at 1003 n.1; see also Laferriere, 286
B.R. at 526 (applying § 329(b) to review reasonableness of retainer paid more than a year before the bankruptcy was
filed because attorney had concealed the full extent of payments that had been made within the one-year period by
filing an inaccurate Rule 2016(b) disclosure); Hanawahine, 577 B.R. at 578-79 (applying § 329(b) to payment made
more than a year before the petition date where law firm defrauded the debtors by accepting their payment and then
abandoning them). No such misconduct has been alleged or proven by the U.S. Trustee in this case. The U.S. Trustee
has stipulated that services were performed by Option 1 Legal, and that Option 1 Legal negotiated $8,228 in debt
reduction. Am. Stip. ¶¶ 24-28.
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Absent any basis to extend the one-year limit in § 329, the Court concludes that the only
payments to Option 1 Legal that are subject to review are those received after October 31, 2023
(one year before the Petition Date). Payments received before October 31, 2023 are not subject to
review or disgorgement under § 329(b). 	For the same reason, the Client Services Agreement
signed in July 2019 is not subject to cancellation under § 329(b). That leaves the $106.95 in fees
that were paid to Option 1 Legal after October 31, 2023. Before proceeding to review those fees
for reasonableness, the Court will consider the other legal basis for the Motion – Bankruptcy Rule
2017(a).
F. 	Bankruptcy Rule 2017(a) Cannot Extend § 329(b) Under the Rules Enabling
Act, 28 U.S.C. § 2075.
Bankruptcy Rule 2017(a) provides as follows:
(a) P AYMENTS OR TRANSFERS TO AN ATTORNEY M ADE IN C ONTEMPLATION OF
FILING A P ETITION OR B EFORE THE ORDER FOR R ELIEF .
On a party in interest's motion, or on its own, the court may, after notice and a
hearing, determine whether a debtor's direct or indirect payment of money or
transfer of property to an attorney for services rendered or to be rendered was
excessive if it was made:
(1) in contemplation of the filing of a bankruptcy petition by or against the
debtor; or
(2) before the order for relief is entered in an involuntary case.
The Advisory Committee’s note to Bankruptcy Rule 2017 states that it “implements § 329
of the Code.” 	Fed. R. Bankr. P. 2017, advisory committee’s note to 1983 adoption; see also
Henderson v. Kisseberth (In re Kisseberth), 273 F.3d 714, 720 (6th Cir. 2001) (“Section 329 is
implemented by Bankruptcy Rules 2016(b) and 2017.”). Rule 2017(a) indeed implements § 329(b)
by clarifying that any party in interest may bring the motion or a court may do so on its own
motion. Further, it specifies that courts may only act after notice and a hearing. However, much
of Rule 2017(a) is substantive in nature. It duplicates the substantive provisions of § 329(b): both
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§ 329(b) and Rule 2017(a) authorize the Court to review prepetition fees paid to attorneys to
determine whether they were excessive. 	The primary difference between the two provisions is
that Rule 2017(a) contains no time limit about how far back the power to order disgorgement may
reach.
In Pruhdomme, the Fifth Circuit held that Bankruptcy Rule 2017(a) provides an
independent basis to review prepetition fees. 	43 F.3d at 1003. 	The court also held that Rule
2017(a) is not subject to any time limit on how far back that review might reach. 	Id.; see also
Laferriere, 286 B.R. at 526. Resisting this conclusion, Option 1 Legal argues that Rule 2017(a)
cannot eliminate § 329’s reachback period without violating the Rules Enabling Act, 28 U.S.C.
§ 2075. Option 1 Legal Suppl. Br. 1, Dkt. No. 43. The U.S. Trustee has not directly addressed
this argument.17 The Court agrees with Option 1 Legal.
The Rules Enabling Act authorizes the Supreme Court to prescribe rules of bankruptcy
procedure. 28 U.S.C. § 2075. The Rules Enabling Act contains a vital limitation: “such rules shall
not abridge, enlarge, or modify any substantive right.” 	Id. 	Because of this limitation, “the
bankruptcy rules cannot implicitly expand the scope of a congressionally enacted statute.” Teter
v. Baumgart (In re Teter), 90 F.4th 493, 500 (6th Cir. 2024); see also United States v. Cardinal
Mine Supply, Inc., 916 F.2d 1087, 1089 (6th Cir. 1990) (“We cannot have a statute that specifically
allows payment of tardily filed claims and rules that prohibit their filing. Accordingly, to the extent
that Rule 9006 contradicts the statute, it cannot stand.”).18 For this reason, the Bankruptcy Code
must prevail in the event of a conflict, though courts must harmonize the Code and Rules wherever
possible. In re Dow Corning Corp., 237 B.R. 374, 378 (Bankr. E.D. Mich. 1999) (stating that “the
17 Neither Prudhomme nor Laferriere addressed the Rules Enabling Act.
18 See also In re Burkett, 329 B.R. 820, 828 (Bankr. S.D. Ohio 2005) (holding that, under the Rules Enabling Act,
neither the Bankruptcy Rules nor the Official Forms can expand the statutory bases for disallowance of a claim set
forth in 11 U.S.C. § 502).
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Court is bound to interpret the Code and Rules harmoniously if it is possible to do so” and that the
goal is to “to harmonize the Code and the Rules to achieve a rational and practical procedure”).
This case presents a dramatic example of the substantive effect of Bankruptcy Rule 2017(a)
if it is enforced as written. If the Court were to apply the literal language of Rule 2017(a) here, it
would give the U.S. Trustee the benefit of a reachback period over five times larger than the
reachback period provided by § 329. And it would do so even though the Court has found that
there were no grounds established to extend § 329’s lookback period under concepts of equitable
tolling. The conclusion is unavoidable that, as applied to the facts of this case, Rule 2017(a) would
modify substantive rights in a manner prohibited by the Rules Enabling Act. The Court therefore
concludes that to enforce Bankruptcy Rule 2017(a) according to its literal terms would ignore the
Rules Enabling Act by substantially expanding the remedy provided by § 329(b).
As confirmed by Dow Corning, 237 B.R. at 378, Rule 2017(a) must be harmonized with
§ 329(b) if possible. In order to avoid running afoul of the Rules Enabling Act, the Court holds
that Rule 2017(a) is subject to the one-year reachback period that is provided in § 329. That leaves
the Court’s determination of the reasonableness of the fees paid after October 31, 2023, in the
amount of $106.95, to which the Court now turns.
G. The $106.95 Fee Is Unreasonable and Excessive.
Where § 329(b) applies, the burden is upon the attorney to show that the compensation is
reasonable. 	Thomas v. Robinson (In re Robinson), 189 F. App’x 371, 374 (6th Cir. 2006).
Reasonableness under § 329 is judged by the same standards as under 11 U.S.C. § 330(a)(3).
American Law Ctr. PC v. Stanley (In re Jastrem), 253 F.3d 438, 443 (9th Cir. 2001) (“Section 330
sets out the standard by which courts should determine the reasonableness of fees under § 329.”)
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(citations omitted); In re Geraci, 138 F.3d 314, 318 (7th Cir. 1998); In re Williams, 384 B.R. 191,
194 (Bankr. N.D. Ohio 2007).
Section 330(a)(3) requires the Court to consider “all relevant factors,” including the time
spent, the rates charged, whether the services were necessary or beneficial, whether the time spent
was 	reasonable, 	whether 	the 	person 	performing 	the 	services 	was 	certified 	or 	otherwise
demonstrated expertise, and what comparable practitioners would charge in other cases. 11 U.S.C.
§ 330(a)(3). The Court may consider other factors, such as results obtained. In re Vill. Apothecary,
Inc., 45 F.4th 940 (6th Cir. 2022).
No evidence was provided as to these factors other than the results obtained. 	Option 1
Legal contends that it did what it promised Ms. Huff it would do and did so at a cost very close to
with what it promised in 2019, and therefore any review of the reasonableness of its fees is unfair
and arbitrary. And the U.S. Trustee does not dispute this assertion. U.S. Trustee Suppl. Br. 3, Dkt.
No. 44. Other than results achieved, Option 1 Legal has provided no evidence. The Court was
provided no evidence regarding how much time was spent on the services, who performed the
services, whether services were provided by licensed attorneys, or any other details. The absence
of any evidence related to these factors makes it impossible for the Court to evaluate the
reasonableness of the post-October 31, 2023, fees. And since Option 1 Legal had the burden of
proof with respect to reasonableness, the Court concludes that Option 1 Legal must return the sum
of $106.95 to the chapter 7 trustee here.
The Court closes by noting that, although it has ruled largely in favor of Option 1 Legal
based on the one-year provision in § 329(b) and the lack of any basis to extend it, this resolution
does not signal the Court’s approval of the business practices of Option 1 Legal as evidenced by
the facts of this case. The facts here are concerning. From August 2019 to December 2023, Ms.
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Huff paid $6,710.99 in fees to Option 1 Legal. During that time, Option 1 Legal negotiated a total
of $8,228.41 in debt reduction on her behalf. Thus, of the $8,228.41 in debt reduction, 81.5% of
it was consumed by payments to Option 1 Legal for its attorney fees. After taking into account
the payments made by Ms. Huff for the Settled Amount, the attorney fees for Option 1 Legal, and
the monthly account fees, she paid $16,558.71 to settle $17,926.88 in debt. She could have paid
far less to file for bankruptcy and discharge these debts, and she could have obtained that relief far
more quickly.19 	The Court questions how it made sense to proceed with a debt settlement
arrangement when Ms. Huff was eligible for chapter 7, which would have provided her with
broader and faster relief at a fraction of the cost she ultimately paid.20 The Court, however, does
not believe that § 329(b) permits it to reach back over five years, at least under the facts that have
been presented here.
V. 	Conclusion
For these reasons, the Court grants the Motion with respect to the $106.95 in fees received
by Option 1 Legal in the year before the Petition Date. In all other respects the Motion is denied.
The Court shall issue a separate order in conformity with this Opinion.
IT IS SO ORDERED.
copies to: Default list
John J. Rutter
Timothy D. Elliott
19 In 2024, she paid $1,085 to her lawyer in this case and has obtained a full discharge from her credit card debts.
Disclosure of Compensation 38, Dkt. No. 1.
20 The only evidence before the Court is set forth on Exhibit 2, which indicates (though in boilerplate fashion) that
Ms. Huff was advised of the option to file for bankruptcy and chose to pursue debt settlement instead. Ex. 2 at 21-22.
There is, of course, no way to know whether this provision was reviewed in any detail and whether Ms. Huff gave it
any serious thought or whether she regarded it as just another form to sign. Given the difference in fees, of course,
Option 1 Legal had a significant financial incentive to steer Ms. Huff towards its debt settlement services.
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