Bankruptcy Law

  • NY Times, August 13: Preparing Petitions: It Irks the Lawyers, but Is It Lawyering?

    This is an interesting story that discusses the issues concerning non-attorney bankruptcy petition preparation and the proposed bankruptcy “reform” law. Here are a couple of excerpts from the story that I want to comment on…

      Deborah L. Rhode, a law professor at Stanford who is an expert in legal services, has criticized the legal system for not providing affordable services or allowing others to do so.

      “In `poor people’s courts’ that handle housing, bankruptcy, small claims and family matters, parties without lawyers are less the exception than the rule,” Professor Rhode wrote in a law review article. “Almost all the scholarly experts and bar commissions that have studied the issue have recommended increased opportunities for nonlawyer assistance. Almost all the major rulings on the issue have ignored those recommendations.”

    Hmm… isn’t this interesting? Her remarks speak volumes. The legal profession as we know it, does not adequately represents the interests of those at the lowest tier of our society. It’s time to allow more room for traineded nonlawyer assistance, similiar to the practice of Physicians Assistants in the Medical field today.

      If legislation to overhaul the bankruptcy system becomes law, bankruptcies will most likely become more expensive and less attractive to lawyers. Lawyers will, for instance, have to certify that they have investigated the accuracy of their clients’ statements about their assets, debts, income and creditors, and lawyers will face penalties if the submissions turn out to be wrong.

      Investigating such things costs money, which would drive legal fees higher. Some lawyers may decide that the consumer bankruptcy practice, which has never been particularly prestigious or lucrative, is not for them.

      “People will have trouble finding a bankruptcy lawyer, or one they can afford,” Professor Skeel said.

    The new bankruptcy laws are garbage, and this quote illustrates this very clearly. The new laws are written for one purpose… to screw the poor for the benefit of credit card companies that contribute money to the political campaigns of those in power. It is not right and it is repugnant that many Republicans who trot out their Christian “faith” to sell themselves to the people of faith in their party, seem to have ignored the teachings of Isaiah, Amos, and Jesus on the issue of social justice.

    Think about it. Many consumer BR lawyers will be unable or unwilling to meet the legal requirement to investigate their client’s finances enough. The liability will be too high. As a result, some lawyers will stay in the biz, but will charge 5-10 times what they charge today for bankruptcies, while others will get out of the market.

    Who will be hurt? Besides debtors’ counsel, it will be the little man.

    Who will benefit? Creditors’ counsel, big credit card companies, mortage companies, predatory lenders who exploit the poor and minorities, and especially our elected officials. (including President Bush who took in more money from MBNA American that from any one else.)