Re: Bankruptcy and Solo Practice

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On 3/08/06, Guru wrote:
> JF
>
> A couple of quick questions to help me understand,
>
> If your clients have the low income required to pass the means
> test, how do they have $1800 (your fee + ct fee) to pay you?
> - The income required to pass the means test is not that
low, usually in the mid 50s. Clients come up with the money,
usually becaue they stop paying their credit card bills.
Sometimes relatives pay, which I of course disclose to the court.

> Is it ethical in your state to charge a low income debtor that
> much for a "typical" Chapter 7?
- I do not practice unethically.
>
> Have your fees been investigated by the court or trustee?
- I disclose my fees on the petition just like everyone
else. My fee is about average in my area, and I know of people
who charge more.
>
> What does your fee agreement say about additional costs in
> bankruptcy, for things such as lift stay defense, discharge
> objections, etc.?
- My standard fee agreement calls for hourly fees for the
above, but frankly, I would not expect to get paid for those
services. Clients would not have the money, and most judges
would not let me out of the case. Sooner or later I will have to
bite the bullet and perform one or more of these services for
free (part of the cost of doing business).
>
> What bankruptcy software do you use?
-Thompson-West.
>
> What percentage of your clients get subjected to the means
> test, and of that number, how many pass?
-All clients face the means test. About two thirds of my
new clients have passed; where the clients have not passed, I am
reviewing the feasibility of arguing for an exception to the
means test. Otherwise, I'll file a 13.
>
> I'd appreciate information related to these questions.
>
> If you are doing 4 Ch. 7s a month, then you are probably
> meeting maybe 10 or more potential clients each month? Maybe
> 20? You have to figure many will be over median income and
> fail means test. Others naturally wouldnt be able to afford
> your fees.
- I am not meeting 10-20 potential bankruptcy clients a
month. I always advise bankruptcy as a last option, but most of
the people who come to me are ready to file. They tend to either
be referals from other attorneys (and thus pre-screened) or
people who have already been to credit counseling. I would say I
receive 6-7 inquiries a month, so I file about half of the cases
that come in my door.

For the record, I didn't say I'm doing 4 bankruptcies a month. I
said I'm up to 3-4 a month. I haven't been doing 4 a month since
October, although I do expect to stay at my current pace from
this point forward.
>
> Do you do chapter 13s? If so, how much is your fee, and how
> many do you do?
- I used to do a good number of chapter 13s, but I have not
yet done one under the new law, although I expect to. When I do,
my fee will be $2500.00.

>
>
> Thanks in advance.
>
>
> On 3/08/06, JF wrote:
>> Successful solos know how to bob and weave, and bankruptcy
>> is not a dead area. When volume in one practice area goes
>> down, they move to another. I used to do a fair amount of
>> bankruptcy, but stopped during the real estate boom. Now
>> that real estate has died down, I (ironically) started doing
>> bankruptcies again, just as the new law took effect. I am
>> already doing the same volume that I did before (3 -4 a
>> month). Except this time I charge more ($1500.00 for a
>> typical Chapter 7) because of the new rules. Still not a bad
>> practice area.
>>
>> Again, a solo law practice is like any other business. Most
>> will fail. Success depends on how well you are financed in
>> the beginning, hard work, business sense, perserverence, and
>> a little luck.
>>
>> A few questions for you:

1. What state are you in?
2. How long have you been practicing?
3. Have you shut down your practice yet?
>>
>>
>> On 3/08/06, Guru wrote:
>>> As most of you know from reading this board, bankruptcy
>>> practice is kaput. The reasons are many. Now, I just
>>> read Suze Orman saying that "Bankruptcy is no longer
>>> available." That's what the public believes and it is
>>> largely true.
>>>
>>> What is happening to all of the bankruptcy attorneys?
>>> This is where it is getting interesting. Most are not
>>> going out of business. They are moving to other practice
>>> areas, increasing competition for all attorneys,
>>> especially solos.
>>>
>>> Not many people considered what would happen to the
>>> bankruptcy attorneys. Most assumed business would bounce
>>> right back. It isn't, and one bankruptcy expert says it
>>> wont come back for years. She is probably right.
>>> Business was expected to drop off considerably in November
>>> and December, and then resume an upward trend in January,
>>> and be back to normal at some point during 2006. January
>>> and February were no better, and March is looking dismal.
>>>
>>> So, back to my original point, bankruptcy attorneys are
>>> not going out of business. They are now doing divorces
>>> and dui, and personal injury. Non-bankruptcy attorneys
>>> are feeling pressure. I know this from talking with them,
>>> and it only makes sense. Bankruptcy, a booming and
>>> lucrative practice, is now dead. This sets up a major
>>> shake out for the consumer distress (criminal, divorce,
>>> pi) attorneys. I predict that a huge number of solos and
>>> small firms will go out of business this year. Aspiring
>>> solos here should take note.