Author-Attorney Alex Bouthilet
Apart from the actual health concerns, the financial impact of the coronavirus and the measures taken to combat it are having profound impacts on people. Most people are not going to work and for many people, this means they are no longer earning any income. Unfortunately, this may leave lots of people unable to pay their bills.
And even though the government and lenders are taking extraordinary efforts to lessen the effects of the coronavirus and the safer-at-home protocols – from direct taxpayer-payments to loaning money to businesses so they can make payroll to 60-day moratoriums on most foreclosures and evictions – the reality is that there are going to be bills that go unpaid.
Ideally, everyone will have the savings or other financial resources to weather this storm and stay current on their bills. But I know that not everyone is fortunate enough to be in that position.
And even if some people fall behind on their bills, many of them will be able to work things out to bring their accounts current once things return to normal– either through forgiveness, settlement, or extended-repayment terms, or combinations of all three.
But some people will not be able to do either and their best option might be to file bankruptcy.
Should I file Bankruptcy
How do you know whether you should file bankruptcy? That’s easy – talk to an experienced bankruptcy attorney who will take the time to listen, explain, and evaluate your options.
How do you find one of those attorneys? That’s not so easy.
See, even before the coronavirus, bankruptcy firms generally fell into two categories; let’s call them “volume firms” and “hands-on firms”.
You want to find a hands-on firm because they will take the time to listen, explain, and evaluate. With a hands-on firm, the client feels welcomed, informed, and cared-for, from the minute they walk in the door to the day they receive the discharge of their debts They will not feel rushed or that they are just a file-number. Their case will get the individual attention each case deserves. This is the right way to do things and leads to better client results and satisfaction.
Volume firms, on the other hand, have a different approach: volume. Their goal is to file as many cases as possible with less emphasis on considerate, honest advice. Don’t get me wrong – we run a business, too, and we like it to be profitable. But never at the expense of good client services.
Do we offer consultations
My free consultations are available over the phone or via video services like Zoom, FaceTime and Google Hangouts. They are exclusively with me, the attorney, and last between 60 and 90 minutes depending on how complex your situation is.
The consultations at a volume firm, on the other hand, do not last nearly as long. They are usually only 20 – 25 minutes or roughly the amount of time it takes the paralegal (yep, you may not even meet with an attorney) to convince you to sign the fee agreement they prepared before the consult.
While this assembly-line approach works ok for many bankruptcies, it doesn’t work very well to identify potential issues in a client’s case. And once those potential issues become real issues, because they’ve been discovered by a Trustee or a Judge, it’s likely too late to do anything about it, and you find yourself playing defense trying to settle.
Here’s the deal: it’s not as if the attorneys and staff at the volume firms are bad people or bad at what they do. On the contrary – they work really hard for their clients and get good results, given the situation. But that situation simply does not allow for the up-front in-depth analysis and individual case attention that produces consistent great client representation and results.
The fact of the matter is it takes time and explanations and questions to identify and thoroughly review potential issues in a bankruptcy. You’ll get that with me; you likely won’t at a volume-firm.
You may ask how I know this much about the volume firms. I know because I’ve worked at a few of them, starting in the aftermath of the 2008 financial crisis. I’ve seen them operate in normal times and in extraordinary times. I like the way I do it and I think you will, too. It’s more predictable and less stressful, for me and my clients.
How do you identify the volume firms? Start by seeing who’s spending the most on advertising. Whose webpages show up first when you Google bankruptcy? Whose webpages are ‘Sponsored’ on Google? Whose banner ads stalk your browsing after you Google, bankruptcy?
Those are the volume firms; advertising is one of their top priorities, if not the top. I’m not saying advertising is bad; shoot, we’re a business, and we advertise. I’m just saying this is a general way to identify the volume bankruptcy firms.
A Different Approach
And how do you find a hands-on firm? Here are some clues:
- Look for attorneys who state they do only (or almost only) bankruptcy work, particularly consumer bankruptcy (Chapters 7/13).
- See how long they’ve been practicing bankruptcy by looking at their State Bar or LinkedIn profile. This is especially important right now (See ‘CORONAVIRUS Update’).
- Does it seem like that attorney does most of the work or does he or she have other, less experienced associates do the work? That would indicate a volume firm.
- Read reviews. Read them critically. Do they actually tell you what they liked about the attorney (hands on) or are they generic?
- Call a few and get a sense of whether they value polite, unrushed service or pressure you to set an appointment.
- Finally, when you meet with the attorney, do they make you feel comfortable? Are they explaining things to you? Answering your questions? Being realistic or just telling you what you probably want to hear?
In the end, hire whoever makes you feel comfortable, and you’ll probably have a good outcome. Just make sure you know what’s going on in your case. If you don’t, then ask your attorney. If they can’t or won’t tell you, find a new attorney.
Warning in the time of Covid-19
I wanted to add something in light of the recent Coronavirus pandemic.
Lawyers and law firms are not immune to this situation and most, if not all, legal work has been severely reduced, if it hasn’t ground to a complete halt. So, lawyers and law firms are looking pick up business in other areas. I don’t blame them one bit.
Many of them are now going to start “offering” bankruptcy as a practice area. It happened after the financial crisis of 2008; it’s happening now.
Here’s the thing: they could be veteran lawyers with years of experience in areas of law I haven’t even heard of. But bankruptcy is arcane i.e. you either know it or you don’t. I think most areas of law are like that.
Which is why it’s so important that you find an experienced bankruptcy lawyer.
Thing is, once you file a bankruptcy, it’s a little like right after you crest the first hill of a roller coaster: there’s no going back. You do not want any surprises. If there is an issue in your case, it should have been identified and discussed at the consultation. Not after the case is filed, or when it’s been discovered by a Trustee or Court. It doesn’t matter if it was an innocent mistake; it’s likely too late to do anything other than settle.
So, please, be wary of volume firms as their volume is only going to pick up. And look out for attorneys touting a bankruptcy practice when they have little or no experience. You don’t want to be their learning experience.