Finding the Right Bankruptcy Lawyer

Every client wants and needs a competent, experienced bankruptcy lawyer to handle their bankruptcy case at a reasonable fee. Today there are more attorneys “practicing” bankruptcy law than at any time that I can remember and, interestingly, they all claim to be “experienced”. It is true that many of these attorneys have been practicing lawyers for quite a few years, but the real question is: How long have they been practicing bankruptcy law? How many bankruptcy cases have they successfully handled? There are a few things that every bankruptcy client should look for, and a few things they should be very wary of.

Verify the lawyer’s experience in consumer bankruptcy law

As the recession wore on and the housing/mortgage crisis exploded in 2008, two things became apparent: (1) a large number of Americans were experiencing hard times and were probably, eventually, destined for Bankruptcy Court; and (2) many general practice attorneys and real estate and transactional attorneys had very little work to do, with few people buying houses or businesses, etc. due to economic uncertainties. The solution for many of these attorneys has been to attend a seminar about bankruptcy (maybe) and then advertise themselves to the general public as bankruptcy lawyers. The problem is that since the passage of the Bankruptcy Abuse Prevention and Consumer Act of 2005 (“BAPCPA”), bankruptcy is definitely not an area of law that an attorney can just “pick up” and effectively represent clients. A client truly needs an attorney whose practice is focused solely on bankruptcy law to obtain the maximum available debt relief. Much like you would not consult a podiatrist (foot doctor) for a problem with your eyes; it is equally unwise to seek bankruptcy advice from a real estate attorney or general practitioner. Unfortunately, many attorneys with little knowledge or experience in bankruptcy are representing themselves to the general public as experts in the field, and for the unknowing consumer there is seemingly little that they can do to protect themselves from such false claims of experience. Or is there?

Fortunately, since the advent of Electronic Case Filing (ECF) in 2000 there is a way for consumers to see how long the lawyer has been handling bankruptcy cases, and how many cases have been handled during said time period. Since 2000, all bankruptcy matters in the Southern District of New York (our bankruptcy district) have been filed over the Internet, and the relevant information about such filings can be obtained from the Court’s website (www.nysb.uscourts.gov). In addition, any bankruptcy case that was still pending at the time ECF went into effect is also be accessible from the Court’s website. Since most Chapter 13 cases involve five-year Plans, there are many Chapter 13 cases filed circa 1995 that can be accessed on said website, along with many Chapter 7 asset cases filed pre-2000 that were still open and being administered by the Chapter 7 Trustee. Accordingly, simply accessing the Court’s website can tell much about a lawyer’s true bankruptcy experience. However, to access the Court’s website you need to know how to do it, and you need an ECF/PACER password—your consulting attorney should have one. Have the lawyer do this for you as part of your consultation. All he has to do is:

1. Once on the Court’s website and logged onto the ECF system, hit the “Query” button on the website’s toolbar;
2. In the open field entitled “Last/Business Name”, have the attorney type in his last name;
3. In the open field immediately below entitled “First Name”, have the attorney type in his first name;
4. In the open field entitled “Type”, use the drop down box to highlight the entry “Attorney”;
5. Hit the “Run Query” button beneath the above described fields;
6. The “results page’ that appears will have (at the top of the page) the gross number of cases handled by the attorney, together with the case number (and a link to the docket) of each such case. The first two digits in any bankruptcy case represent the year that it was filed, so you can actually see when the attorney started filing bankruptcy cases.

If your consulting attorney refuses to do this for you, it might be because he knows that his lack of bankruptcy experience will be revealed to you. If the attorney says he does not have an ECF/PACER password, this might be true. Believe it or not, there are some attorneys filing bankruptcy cases who are so inexperienced that they do not even file their cases online, but rather take the paper document to the Bankruptcy Court and have the Court Clerk’s Office file it online for them. If your consulting attorney falls into this second category, my advice would be to run out of his office, immediately and as fast as possible, and never look back.

If you use the above procedure and type in the name of “Michael O’Leary”, you will see that Mr. O’Leary has been the attorney of record in well over 1,000 bankruptcy cases since the advent of electronic filing in 2000. Typing in the law firm name of “Hayward, Parker & O’Leary” will reveal an additional 65 cases, as for a while the Court was improperly logging the attorney’s name in Mr. O’Leary’s cases. You will also note that each attorney was involved in many cases filed well before 2000. If you type in the name “Michael O’Leary” and slightly change the nature of the query so that in the ”Type” drop down box you highlight the entry “Trustee” instead of “Attorney”, you will see that Mr. O’Leary has been the Chapter 7 Trustee in well over 8,000 cases since the advent of electronic filing in 2000. In short, the attorneys in this law firm have been intimately involved in more than 10,000 bankruptcy cases handled in the Poughkeepsie Bankruptcy Court since 2000.

Your bankruptcy will have a significant and lasting impact on your assets, your home and your family life. Look for a law firm that has many years of bankruptcy experience, and not someone who has dabbled in the field for the last year or two. You have too much at stake to let an inexperienced attorney learn about bankruptcy “on the job” and at your expense.

Be wary of attorneys collecting their fees after the case is filed

This “shady practice” has been around for a long time. If you visit two law firms and Law Firm 1 tells you that their entire Chapter 7 fee has to be paid prior to the case being filed, and Law Firm 2 tells you that some of the fee can be paid after the case is filed, Law Firm 2 might sound attractive to you. It might seem like Law Firm 2 is “working with you”. However, this type of fee arrangement is unethical and creates an immediate conflict of interest, and sets the stage for the illegal solicitation of fees by the law firm.

The conflict between law firm and client created by this type of fee arrangement arises as soon as the case is filed, because the law firm becomes one of your creditors. The provisions of 11 USC §§ 327(a) & 101(14)(A) expressly forbid the hiring of attorneys who are creditors of the debtor. The problem is that while the law firm is trying to protect you from creditors, they are also trying to collect their fee from you at the same time. It is a fact that a good deal of a bankruptcy lawyer’s legal representation occurs after the case is filed. If you do not or cannot make your post-filing payments to the attorney will he show up with you at the Trustee’s § 341 Meeting? Will the attorney represent the client to the best of his ability if he feels that the client “stiffed him”? Can the attorney’s legal advice be relied upon and trusted if the attorney’s own fee arrangement is not in compliance with bankruptcy law?

If you do enter into such a fee arrangement you should be aware that once the case is filed you are not required to pay the remaining legal fee, although I am sure that your attorney will never tell you this. The attorney is barred by the automatic stay created by the bankruptcy filing from soliciting repayment of the fee. You can choose to voluntarily repay him if you want, but he cannot compel you to make such payments, he cannot sue you for the fee, etc. Some attorneys try to “finesse” around this problem by having the client sign post-dated checks, before the bankruptcy is filed, which the attorney is to deposit on the date appearing on the check (after the case is filed). However, this practice still violates bankruptcy law, since under the law a post-dated check is merely a promissory note, with the promise being made prior to the bankruptcy filing. No matter how you look at it, the attorney is still trying to collect his pre-petition legal fee after the case is filed, and this clearly violates bankruptcy law.

A major “disconnect” results when a bankruptcy attorney tries to collect his fee from his client after the case is filed. Putting aside the illegality (which you really cannot do), you hired the attorney to obtain a fresh start free from creditor harassment, and now your own attorney is hounding and harassing you for his own fee! This is exactly the type of harassment that the bankruptcy filing was intended to prevent!

Be wary of attorneys charging unusually low fees

You should not be tempted by discount rates sometimes charged by certain lawyers for bankruptcy services. This is usually done by inexperienced attorneys, who substitute low fees for their lack of experience. It is almost an admission by the attorney that “although I may not really know what I am doing, at least it won’t cost you too much”. Given that bankruptcy involves many complex issues that can have a long-term impact on your life, the phrase “you get what you pay for” is much more than a cliché. It is cold reality. If the legal fee sounds too good to be true, rest assured that it probably is. If it is not an inexperienced attorney quoting you a discount rate, it will be the high volume bankruptcy “mill” doing it, where you may never get to consult face to face with the attorney, with such exchanges instead being handled by support staff via e-mail, phone or fax. Using a medical analogy, do you really want your knee to be operated on by a doctor who has never looked at your x-ray? In addition, it is not unusual for the advertised, low fee to be “a la carte” in nature, although this is rarely made clear by the attorney. Such an attorney may seek other fees as the bankruptcy case progresses, and the client may simply find himself in too deep to walk away, out of fear of being abandoned by the attorney. Suddenly, the attorney hired to protect you from creditors becomes someone you feel threatened by and uncomfortable with. Obviously, this is not the way that the attorney-client relationship is supposed to work.

It is fair to say that all experienced, competent and ethical bankruptcy attorneys charges fees in the same range, and collect their fee (at least in Chapter 7) before the case is filed. If an attorney quotes you an unusually low fee, or agrees to accept part of his Chapter 7 fee after the case is filed, a “red flag” should immediately go up in your head, and my advice again would be to run out of that attorney’s office, immediately and as fast as possible, and never look back.