I was recently retained by a client who – like many people struggling nowadays – tried to tackle their mounting financial problems by going to a debt settlement company. I’ve said it once, and I’ll say it again: debt settlement companies are a rip-off. The proof is in how empty my client’s wallet is now, and where my client is now.
Posts Tagged ‘attorneys’
Still Think You Can File Bankruptcy Without An Attorney?
Tuesday, July 27th, 2010
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.
Cheap Becomes Expensive
Tuesday, May 18th, 2010
Like many attorneys, I get calls from prospective clients asking me what my fee is for a bankruptcy filing. It’s not a particularly difficult question to answer – in theory. But at the same time, it is. Generally, I know that if their concern is price, then who they retain as their attorney is not all that important to them. But I also get calls from prospective clients who have or had another (and less expensive) attorney who now is not performing at what they believe is an acceptable level. Perhaps they aren’t returning calls. Perhaps they are not giving straight answers to honest questions. Or perhaps better said, the cheap attorney doesn’t know what the hell they are doing. The desire to go cheap has now turned into something expensive. (more…)
E.D.Michigan Caps Petition Preparer Fees
Friday, April 23rd, 2010
I came across this interesting order issued on Tuesday, April 20th by the US Bankruptcy Court for the Eastern District of Michigan. The Administrative Order caps the maximum allowable fee charged by a bankruptcy petition preparer in any case to just $100.
When Bankruptcy Attorneys do a Wicked Bad Job
Tuesday, April 6th, 2010
I’ve been doing a lot of research lately on attorney malpractice… specifically, bankruptcy attorney malpractice. More and more attorneys are popping into bankruptcy practice because they think it’s the new growth area. And sadly, some are doing a god-awful job at it – and in some cases, they are hurting debtors. So in my research, I came across this case that came down last Friday out of the Northern District of California.
What caught my eye about it was the opening sentence: “[t]he schedules filed in this Chapter 7 case by [debtors’] attorney …contained horrific omissions, including a furniture store filled with furniture, a $13,000.00 bank account, a 2008 Mercedes automobile, and real property.” [emphasis added]. As I read the decision, I learned that the term “horrific” was justified, and then I wondered to myself…’how many other lawyers are out there doing the exact same thing as this guy?’
The Peculiar Parallel of Debt Relief Agencies and Madonna
Thursday, March 11th, 2010
In yesterday’s blog, I suggested that some attorneys – namely on Craigslist – were not complying with the BAPCPA imposed requirement that they disclose that they are a “debt relief agency.” That might not have been completely fair.
Certainly, when an attorney fits into the definition of a “debt relief agency”, they must disclose that fact and are obligated to comply with additional disclosure requirements. But, if an attorney does not fit into the definition of a “debt relief agency”, may they still represent individuals in consumer bankruptcy matters? The answer is yes… and that raises some interesting questions.
CareOne: What’s Behind Those Commercials?
Thursday, February 18th, 2010
As I was watching the news the other night, I saw this commercial for CareOne Credit. The name rang in my head – and then it hit me: I had recently read about them in a case while doing some research Since the judge’s observations in that case and his comments were stuck in my head – and since I am seeing these commercials more and more - I thought I would share them here.
The Case
In late 2006, Debra Wood was struggling with debt – and after apparently seeing an ad, she contacted CareOne Credit Counseling. When she contacted CareOne, she was referred to Consumer Law Associates, LLC (CLA). CLA then gave her documents to start her into a debt management plan – which would be administered by Ruther and Associates, LLC (RA). They describe themselves as a “national law firm dedicated to consumer debt reduction.” As the facts of this case unfold, you’ll see what that description is inaccurate – at best.
What Does a Good Bankruptcy Attorney Do?
Friday, November 27th, 2009
I’ve compared my role as a debtor’s attorney as similar to that of a boy scout. My job is to help my debtor client cross the road without getting hit by the bus. A big part of that job is done while preparing. In essence, I get behind the steering wheel of the bus and I ask myself “if I were trying to run over the debtor, what would I be looking for first?” Perhaps a better, and far less macabre way of looking at how I do my job is this: when preparing my client’s case, I pretend that I am trustee and I ask myself: what has my client told me or shown me that would send up a red flag. What could make my client’s life even more difficult than it already is?
If Only You Knew…
Wednesday, August 12th, 2009
Let’s assume that you work for a company and things are not going well. You start negotiating a severance. Does the employer have an obligation to share with you its intention to seek bankruptcy protection? Maybe. If you ask. But what if you don’t ask? What if they don’t tell? What if perhaps, you really should have assumed that bankruptcy was an option that might be considered even though it’s not mentioned at all during the negotiations? These issues were faced by the 7th Circuit in the case of Smith v. Duffy, decided on August 3. They answered the questions but rather than discuss them, I’ve posted the Court’s decision here.
I will share one thought. The case discusses, among other things, the duty of candor that parties owe each other – and uses the attorney-client relationship as an illustration of when that duty of candor not only arises, but is expected. But it also does so by reminding us when that duty of candor simply doesn’t exist.
The case of a special relationship, such as the lawyer’s fiduciary obligation to his client, is really just a special case of the general proposition that context can create a duty of candor. The lawyer’s specialized knowledge invites the client to repose trust in what the lawyer tells him, and the client’s expectation would be shattered if the lawyer could be uncandid with impunity, as is normal in arm’s length dealings between buyers and sellers.
I encourage you to read this case, and put yourself in the shoes of the now very disgruntled employee. Ask yourself – when entering into an arm’s length negotiation, are you equipped to handle the negotiations yourself? Or might you find a benefit by having someone by your side who has a legal duty to be candid with you. Perhaps better said – are you better off being told what you want to hear? Or are you better off hearing what you need to know?
Read the case and think about that the next time you think about buying a home, or refinancing or modifying your real estate mortgage. And most definitely think about it if your boss calls you into your office and wants to discuss your departure from the company.
Blackberries & Form-Fillers: What Bankruptcy Practice is Really About
As I continue to work through (in my mind) the issues raised by the proposed auction at 115 Cottonwood in Fairhaven, I recall attending a seminar where one of the speakers remarked that consumers have become “Blackberried.” Specifically, the speaker mentioned that clients had a tendency to send via Blackberry or email a specific legal question, and then call within 10 minutes or so wondering why no response to the question had been provided. The speaker remarked at how clients wanted information “now” – but lawyers on the other hand, sometimes need time to think and analyze before responding.
The same can be said for certain practice areas. For many years, I thought that consumer bankruptcy practice was just completing forms and filing them. Many, many years ago, before I embarked out on my own an old friend and colleague from law school told me that the only way to practice bankruptcy law successfully was by “volume.” That might have been true (way) back then, before BAPCPA was enacted, but it’s not the case now. And it cannot be.
When I got out of law school, the thought of being a bankruptcy lawyer never entered my mind. In fact, it was the last thing I wanted to do. I viewed it as little more than completing forms. Over time, I learned that I was wrong.
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Tags: attorneys, Commentary - Legal, Petition Preparers and Fees
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