Even though I have written and spoken publicly about the perils of representing oneself in bankruptcy, people still do it. I recently came across a case where a lawyer – with a boatload of legal problems – was sanctioned for essentially abandoning his clients during a bankruptcy case. But I’m not writing about that lawyer or what he did that got him into so much hot water with the Bankruptcy Court. Rather, what I write about today is what District of Massachusetts Bankruptcy Judge Melvin Hoffman had to say about the bankruptcy process, and the role of a debtor’s attorney. So if you’re still thinking you can or should go through the bankruptcy process alone, take a few minutes and read this.
In every bankruptcy there is a meeting of creditors. As I wrote in my book Chapter 13 in 13 Chapters:
The meeting of creditors, commonly referred to as “the 341”, sets the tone for how the case may move forward in the process. It is an opportunity for the chapter 13 trustee to meet a debtor face to face (along with debtor’s counsel). It is an opportunity for the chapter 13 trustee and creditors to ask questions they may have about the debtor’s plan or about the information disclosed on the petition, schedules and statements. It is also an opportunity for all parties to discovery potential issues that might arise in the case. With all of that said, preparation of all parties is crucial.
In a June written opinion, Judge Hoffman said this:
The § 341 meeting is most often a debtor’s first exposure to the public face of the bankruptcy process and to the adversarial forces potential arrayed against [him or] her. Much depends on [his or] her performance before a sober and probing trustee and sometimes hostile creditors. The § 341 meeting is the crucible in which the months or years of the debtor’s financial and emotional hardship are fused into a final cathartic event. The debtor is often distracted by nerves and fear. [He or s]he thus has every reason to expect a knowledgeable and zealous ally at [his or] her side. This is where the bankruptcy lawyer earns his fee.
The Rules of Professional Conduct of the Massachusetts Supreme Judicial Court, which apply to attorneys practicing in federal as well as state court, require, among other things, that a lawyer provide competent representation, Rule 1.1, and that he not assist another in the unauthorized practice of law. Rule 5.5. Fed.R.Bankr.P. 9010 (a) also restricts the role a non-lawyer may play in a bankruptcy case to either pro se representation or acts “not constituting the practice of law.”
He continues, citing In re Bankcroft, 204 B.R. 548, 551-52 (Bankr. D. Ill 1997):
[A] professional, practicing bankruptcy law, cannot apply a high level of knowledge and skills unless he has some contact, and first meets, with the client to determine the client’s needs and explains what action, if any, is required and its effects. Reviewing papers prepared by a secretary from information supplied by a client to a secretary is not sufficient, as the high level of knowledge and skills is not present when the questions are asked. The secretary may or may not ask the right questions. Furthermore, if a problem exists, the secretary may not recognize it as such. If the secretary did so, the secretary cannot advise the client, as that would constitute the practice of law.
Nor can an attorney apply his professional knowledge and skills without attending the first meeting of creditors. By filing the petition in bankruptcy, the attorney sets in motion a series of events, including the first meeting of creditors, which exposes a layperson to a potential plethora of legal hurdles. The layperson will be exposed to questioning by a professional trustee and attorneys representing creditors. The layperson may be asked to take certain actions. In response, the layperson, acting out of ignorance or feeling that there was no need for an attorney to represent him, may say or do something to his or her detriment. Having initiated the process, an attorney must shepherd the client through it, to its conclusion.
My point in bringing this aspect of the decision is this: a good bankruptcy attorney is not just correctly filling out forms. The very best comparison I can come up with is that of a Boy Scout helping someone cross the street. The pedestrian wants to cross the street and their objective is to get to the other side. The Boy Scout is aware of the traffic patterns on the street, the presence of arrogant speeders, and the problems of the occasional pothole that can and should be avoided. Like the Boy Scout, the bankruptcy attorney shepherds the client through the process.
And like the Boy Scout, the good bankruptcy attorney does all he or she can to ensure that the client won’t get hit by a bus. Think about that before deciding you can file your bankruptcy case without an attorney.
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This new guy can write!
It is good to quote a judge in making the point filing for bankruptcy without a lawyer is fraught with risk. A recent experience of mine, illistrates this. I warned a client that he needed to have an attorney and should not go it alone, repeatedly. The client left my office saying, by his actions, he could do it himself. At the next hearing of the court case, the judge told him he should have an attorney. That was all it took. There is something about that robe. But nonetheless, there will always be pro se filers.