Three things will get you ejected from my bankruptcy office.
Three qualities simply disqualify prospects who want me to be their bankruptcy lawyer.
So what would make a bankruptcy specialist turn down work?
That is, other than the prospect who is blatantly dishonest.
See if you recognize yourself in any of these profiles.
The foreclosure is tomorrow
This week’s story was even worse. The call came at 3 p.m. and the foreclosure was set for 11 a.m. the next day. Not even 24 hours to work.
And there was more than a half a million dollars in equity in the property, as the caller told the story.
Yet I declined the case, and the associated fees:
Someone who waits til the last minute to seek professional help isn’t likely to be a good team mate in a bankruptcy case.
Unlike lots of kinds of law, a bankruptcy case requires the continuing participation and engagement by the person who’s filing.
There are documents to assemble, budgets to create, and choices to make among options. The court imposes deadlines to get things done.
If you’ve waited til the very last minute to address your problem, how am I going to keep your attention when the pressure is off and the automatic stay prevents foreclosure?
Just as disqualifying is the fact that a last minute filing allows no time to assess the bigger situation.
- Are there other factors that argue against bankruptcy?
- Does bankruptcy create as many problems as it solves?
- Who else might be dragged into the case if we file without planning?
There’s no time to answer those questions if the foreclosure is tomorrow.
And if we file and something goes wrong, the professional is at risk of a claim of malpractice.
I said: no thanks.
Playing games with income and expenses
Hiding your income, usually trying to avoid taxes, is the second way in my book to get thrown out of the game.
Two prospects recently told me they paid their living expenses through their business. All their personal expenses were treated as business deductions.
Setting aside the issues of legal consequences from this stunt in the past, the lack of coherent documentary support for an individual’s income makes bankruptcy difficult.
The bankruptcy bargain trades protection from creditors for financial transparency.
We would have to tease the information out of the records in which it’s hidden. We’d have to persuade the client that full disclosure is necessary.
Then we’d have to convince a judge or a trustee that this time the client is telling the whole truth.
It’s the honest but unfortunate debtor who commands the protection of the law.
Not the person who has cooked the books.
Great but unreasonable expectations
The caller with the foreclosure tomorrow had another strike against him: unwillingness to compromise.
He was years behind on the mortgage, had lots of equity in his home, but was unwilling to consider selling other assets to save the house.
I had to tell him that my magic wand was out for service this week.
When the situation is dire, sometimes we have to accept less than we’d like to get something we prize.
A debtor with unreasonable expectations creates lots of tension and stress within the team. It’s like an unhappy locker room in sports.
We should be on the same team, moving in the same direction. A client who’s dug a deep hole has to be flexible on how to exit that hole.
Make yourself an appealing client
It’s not hard to endear yourself to a bankruptcy lawyer. Getting people out of financial trouble is what we do.
Be proactive, play it straight with the money, and be flexible, and we can work together for a fresh start.