HAMILTON - Ravalli County attorney candidate Bill Fulbright told supporters in August that a battle over student loan payments had forced him to file Chapter 7 bankruptcy in 2003.

He didn't tell them the bankruptcy included a $250,392 professional malpractice claim from a lawsuit filed the year before in California.

Fulbright is running as a Republican candidate against incumbent Ravalli County Attorney George Corn. He currently serves as a deputy county attorney.

Last month, Fulbright volunteered information about the bankruptcy in a letter to supporters on his website and in an interview.

He said his family's decision to file bankruptcy was the result of a 10-year "running battle" with the Federal Student Loan Commission over its decision to capitalize interest on his student loans.

Bankruptcy documents filed in Butte indicate that 64 percent of the unsecured debt Fulbright asked to discharge was included in two professional liability claims.

Dee Gomez of Sacramento, Calif., secured a claim of $250,392 in the bankruptcy filing.

Gomez sued Fulbright in 2002 for failing to "exercise reasonable care and skill in undertaking to perform legal services" when he was practicing in Lodi, Calif.

Court documents indicate that Fulbright was served court papers in November 2002 and when he failed to respond, the court entered a default judgment against him for $250,000, plus costs in April 2003.

Gomez was eventually awarded $4,869 on her claim in Fulbright's bankruptcy.

Monica R. Larkin sued Fulbright in 2001 for $55,370. Larkin said he "negligently failed to serve the summons and complaint in San Joaquin County Supreme Court" and that he "did not possess the necessary expertise to handle such a case."

San Joaquin Superior Court documents showed Fulbright was served with court papers in November 2001 and March 2002 in the Larkin case.

Larkin's attorney filed a motion for a default in March 2002, but no judgment was made before Fulbright filed bankruptcy in September 2003.

Both cases were stayed following the bankruptcy filing.

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Fulbright said Monday he didn't know the Larkin case had been filed in superior court.

"I was never served in that case," he said.

Fulbright said he didn't remember the details of the Gomez case, except that it involved a personal injury.

"She was an unhappy client ... after practicing law for 10 years, you get people who are mad at you," Fulbright said. "It happens."

Fulbright said he and his family had already moved to Montana when the two cases were filed.

In the Gomez case, Fulbright said his family decided bankruptcy was their only option when the lawsuit was filed and he decided not to return to California to fight it.

"At that point, we knew that bankruptcy was the only option left," he said.

Fulbright told the Ravalli Republic in August that he decided to volunteer information about his bankruptcy after hearing the issue was being discussed in the local rumor mill.

"An attorney came up to me and said, ‘So I heard you filed bankruptcy to get out from under your student loans, '" Fulbright told the Republic. "That was not my motivation for filing bankruptcy. That's completely off-base."

Fulbright said he disputed accounting by the Federal Student Loan Commission that capitalized interest, which resulted in a doubling of the principal balance over a 10-year period.

By filing bankruptcy, Fulbright said he was able to sue the student loan commission to "stop the madness."

Fulbright filed a Chapter 7 bankruptcy, which allows a debtor to turn over all non-exempt property to a bankruptcy trustee who then converts it to cash for distribution to creditors. Other debts are wiped clean.

Court records said Fulbright listed $474,145 in unsecured nonpriority claims, which included $107,145 in student loans and $305,762 in professional liability claims.

A bankruptcy judge ruled in January 2005 that Fulbright had failed to show that repaying his student loans would impose an undue hardship on his family, considering the fact he tithes $430 a month in voluntary religious contributions to his church.

Judge Ralph Kirscher also said Fulbright had never applied for available repayment programs. The judge ordered him to repay loans of $91,337, plus accruing interest.

"Fulbright is not entitled to equitable relief because he has not acted equitably or availed himself of available relief," Kirscher wrote.

In August, Fulbright said he continues to pay on his student loans.

Fulbright began working at the Ravalli County Attorney's Office in 2002. He was named Montana Prosecutor of the Year in 2007.

Ravalli Republic reporter Perry Backus can be reached at 363-3300 or at pbackus@ravallirepublic.com.