Re: Bankruptcy Filings Rise

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On 3/30/06, Dante wrote:
> Question: I understand that the new law only applies to half the
> population - namely, those that make more than the median income of
> their particular state. This being the case, are any attorneys
> charging these clients the same fee as before? Or are the new fees
> hiked for everybody?
>
> And as a side thought, since poorer people are presumably more
> likely to go bankrupt, would it be safe to say that the majority of
> potential clients are not impacted by the new law?
>
> Answer: Bankruptcy law is no longer for amateurs. Please do yourself
> a favor and work with someone who does this for a living. The result
> of messing it up, which is now fairly easy to do, could be huge
> professionally. Check out membership in the ABI if you're seriously
> considering BK practice. Liability coverage is more expensive, so
> everybody gets charged about twice as much as before. This is the new
> reality.
>
> Poorer people tend to be "judgment proof," i.e., you can't get blood
> from a stone. When I first started doing BK about 10 years ago, I
> figured that the target market was the poor; it is not. It is the
> working poor, formerly known as the lower middle class, who comprise
> the client base. Everyone is impacted by the new law. I had to turn
> someone away today because they couldn't afford my fee. It was a lose-
> lose result that wouldn't have happened 6 months ago. But keep a
> positive outlook. Opportunities are rarely handed to us on golden
> platters. There is always room at the top. It's the bottom tiers of
> the practice that are crowded.
>
> Good luck.
>
>
>
>
>
> On 3/28/06, FordhamGrad wrote:
>> Question: I understand that the new law only applies to half the
>> population - namely, those that make more than the median income of
>> their particular state. This being the case, are any attorneys
>> charging these clients the same fee as before? Or are the new fees
>> hiked for everybody?
>>
>> And as a side thought, since poorer people are presumably more
>> likely to go bankrupt, would it be safe to say that the majority of
>> potential clients are not impacted by the new law?
>>
>> I'm not practicing yet, just curious.
>>
>> On 3/28/06, Dante wrote:
>>> I admire the optimism of both Jiff and rrr to predict the future
>> of
>>> bankruptcy. What do we really know? The practice area has now
>>> dropped off a cliff in terms of business. Will this trend
>>> continue? The U.S. household savings rate is the lowest ever.
>>> Housing prices are the highest ever, and oil is now over $60 per
>>> barrel. Add into that an aging population, foreseeably massive
>> tax
>>> increases both at the federal and state level, and the financial
>>> picture darkens.
>>>
>>> Short-term, our business looks bad; over the longer haul, one has
>>> to think that there's hope. I am told that the Chinese character
>>> for "crisis" and "opportunity" is the same.
>>>
>>> We are diversifying over the short-term, and keeping an eye on the
>>> long-term opportunity for consumer liquidations that is sure to
>>> arise in the deepening morass that is our national economy.
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>> On 3/28/06, Jiff wrote:
>>>> I admire your optimism, but I just don't see it that way. The
>>>> problem I see with your analysis is that you assume debtors are
>>>> actually going to defend against collection suits. In reality,
>>>> they don't, not in large enough numbers to make it a viable
>>>> practice add on. As far as independent paralegals, they never
>>>> really took hold in my area, and as far as easy, cheap work,
>>>> attorneys were more than happy to do it. Client comes to me and
>>>> offers $400-500 for about 2 hours (at most) of my time for a
>>>> simple 7, and I take it happily over and over again. Well, I
>>>> used to, under the old law. I share the sentiment voiced by
>>>> others on this board that bankruptcy's glory days are behind
>>>> us. It was the easiest money I ever made, now, back to those
>>>> pesky divorce clients!
>>>> On 3/28/06, rrr wrote:
>>>>> On 3/28/06, Jiff wrote:
>>>>>>
>>>>>> Read these thoroughly. Bankruptcy filings are "rising", but
>>>>>> from virtually nothing. The current and projected caseload
>>>>>> for the next twelve months will not support the current
>>>>>> number of bankruptcy attorneys. 2/3 of the bankruptcy
>>>>>> attorneys will go out of business in the next year, in my
>>>>>> view.
>>>>>
>>>>> I think its going to push the Independent Paralegals out of
>>>>> Bankruptcy business since they were the ones doing most of the
>>>>> fast & easy petitions (at least they were the ones here in
>>>>> California). I've already seen it in the local advertising.
>>>>> Not a Paralegal advertising for BK at all. The Attorney
>>>>> who "occassionally" did a bankrutpcy will no longer do them,
>>>>> and the mills will have to change their methods, but the core
>>>>> Debtor-Consumer Attorneys are going to come out ahead. And we
>>>>> haven't even started to see the fallout from the slow down in
>>>>> real estate and consequences from aggressive mortgage lending
>>>>> practices. When the foreclosures start to hit in a stagnant
>>>>> market, it will be time to feed again. Not to mention there
>>>>> will be more Collections Defense Litigation from those who
>>>>> can't Chapter 7 because of the Means Test and lack the
>>>>> financial stability to Chapter 13, and have no foreclosure to
>>>>> prevent. This new law may actually be great news for Debtor-
>>>>> side Practitioners after we shake off the immediate mental
>>>>> shock and adapt to the change. Time to be patient and time to
>>>>> be visionary, the greedy shylocks might have just made us all
>>>>> rich.