So far this year, I’ve been contacted by three attorneys who are considering filing bankruptcy. I’ve been a bankruptcy lawyer for fifteen years now and it seems that every year at least one or two attorneys contact me for advice regarding serious debt problems.

Attorneys aren’t that different from other consumers – some have serious debt problems. Many attorneys are self-employed entrepreneurs whose cash-flow can fluctuate greatly from month-to-month just like the incomes of other small business owners.

While considering bankruptcy is a stressful thought for almost all business people, attorneys who are thinking about bankruptcy have some unique concerns. The attorneys that I have counseled have all been worried that filing bankruptcy might mean that they wouldn’t be able to continue to practice law.

Here are some typical questions that I get from attorneys:

• Are attorneys allowed to file for bankruptcy?
• Is filing bankruptcy a violation of the rules of professional conduct?
• Can an attorney continue to practice law after filing bankruptcy?

Here’s what I tell attorneys who contact me for bankruptcy advice:

1.  An Attorney Has a Constitutional Right to File Bankruptcy. Article I, Section 8 of the United States Constitution provides that Congress shall have the power to establish uniform laws on the subject of bankruptcies throughout the United States. The Bankruptcy Code clearly provides that any person may voluntarily file a petition in bankruptcy. This means that anyone, even an attorney, can file for bankruptcy relief.

2. It’s Not Unethical for an Attorney to File Bankruptcy. There are many published Oklahoma cases in which a party to a case is an attorney who has filed personal bankruptcy. Not one time has an Oklahoma court concluded that it is unethical for an attorney to file for bankruptcy and no Oklahoma attorneys have been disbarred from the practice of law due to filing bankruptcy. The active roll of Oklahoma attorneys contains the names of many attorneys who have filed personal bankruptcy.

3. A Bankruptcy Trustee Will Scrutinize An Attorney’s Assets. In Chapter 7 cases, trustees are motivated to look for non-exempt assets that can be liquidated and distributed to creditors. One of the primary motivations is that Chapter 7 trustees get a cut of the proceeds realized from the liquidation of non-exempt assets. Chapter 13 trustees look for the same assets, but to determine the percentage a debtor must repay his unsecured creditors.

A trustee will therefore inquire about uncollected accounts receivable owed by clients, uncollected referral fees owed by other attorneys, and pending personal injury cases with potentially large recoveries. If the attorney-debtor is employed by a firm, the trustee might inquire about the likelihood of receiving bonuses. If the attorney is a partner, the trustee will look at the value of the partnership interest. If an attorney-debtor has his own practice, the trustee may inquire about the value of office equipment and any assets owned by the practice. Depending on the situation, the trustee might want to also examine the attorney-debtor’s financial books and records, which is something a trustee might do with any consumer filer who has his own business.

4. Attorneys Who File for Bankruptcy Will Be Able to Continue Their Law Practices. Although a law practice is technically a non-exempt asset, it is a personal services business bound by ethics laws that a trustee could not realistically sell. Thus, sole practitioners filing for bankruptcy relief are usually able to continue their practices without any problem.

5. Unique Issues Attorney-Debtors May Encounter. Since attorneys have the potential for earning substantial income, both the case trustee and the Office of the United States Trustee, which is the governmental agency that oversees bankruptcies, will want to make sure that an attorney who files for Chapter 7 relief is doing so in good faith. In other words, they want to make sure the attorney-debtor will not be in a position to earn a hefty salary after filing that could have enabled him to make some payments to creditors. If that was the case, the attorney-debtor can still file for bankruptcy, but he would have to consider a case under Chapter 13 instead, which would involve a payment plan.

6. Attorneys Who File for Bankruptcy Won’t Be Treated Any Differently By Judges Or Trustees. In my experience, bankruptcy trustees and judges treat attorney-debtors the same way as any other debtor. Attorney-debtors do not receive any special treatment, nor are they disparaged or made to feel embarrassed in any way.

7. Attorney-Debtors Should Not Represent Themselves. Like any other pro-se debtor, an attorney-debtor can obviously represent himself. However, it would be much wiser for attorney-debtors who do not regularly practice bankruptcy law to hire a bankruptcy attorney to represent them. A knowledgeable, experienced bankruptcy attorney will know the Bankruptcy Code, Bankruptcy Rules, the local rules and practices, and will be best equipped to guide the case to a beneficial conclusion.

So in conclusion, attorneys who have serious debt problems should consider bankruptcy as an option.

If you’re an attorney who is struggling with too much debt and you have questions about bankruptcy, contact me today to schedule a FREE initial telephone consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. Or just give me a call at 918-615-8260.

One of the benefits of being a member of both the Oklahoma Bar Association and the National Association of Consumer Bankruptcy Attorneys is that both organizations provide their members with free access to Fastcase.

Fastcase is a web-based legal research service that is a welcome alternative for solo attorneys like myself to LexisNexis and Westlaw, both of whom not long ago were the only online legal research options available. And they charged accordingly.

And now Fastcase has upped the ante by releasing a FREE iPhone app. Now attorneys like myself who use the iPhone can access Fastcase’s libraries even when we’re not in front of our computers.

Fastcase libraries include cases, statutes, regulations, court rules, and constitutions. Case law is available from all 50 states, as well as deep federal coverage going back to 1 U.S. 1, 1 F.2d 1, 1 F.Supp. 1, and 1 B.R. 1.

Fastcase’s libraries are searchable, just like you search the Web or traditional legal research services – by keyword (or “Boolean” search), natural language search, or citation lookup.

For some good information on Fastcase’s iPhone app, read this review written by Massachusetts attorney Robert Ambrogi.

Back when I operated a traditional law office and had a court hearing, I lugged a briefcase with not only my client files but also heavy books containing the U.S. Bankruptcy Code and the Rules of Bankruptcy Procedure.

But now that I operate a digital law office, there’s no more heavy lifting, back-ache and neck-strain because the entire contents of those heavy books now reside on my iPhone.

Sure, I could access both the Code and the Rules from court on my MacBook Pro, but sometimes a wireless connection isn’t available and at other times my iPhone is just more convenient.

Both the Code and the Rules are fully search-able using the iPhone Apps’ built-in search engine.

And I can even bookmark for quick retrieval any Code section or rule that I refer to often.

So I highly recommend that all of you bankruptcy lawyers with iPhones head on over to the App Store and download the apps for both the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.

If like me, you’re a consumer bankruptcy lawyer who represents debtors, then listen up.

A very important case is being argued today before the U.S. Supreme Court regarding whether or not lawyers representing debtors must comply with the debt relief agency requirements mandated by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) which was passed by Congress and signed into law by President Bush back in 2005.

Under BAPCPA, debt relief agencies are required to do certain things and prohibited from doing other things. And when these requirements and prohibitions are applied to bankruptcy lawyers, in my opinion they impair the attorney-client relationship and violate an attorney’s free speech rights.

And Alan Milavetz agrees with me.

Milavetz  is a Minnesota lawyer who remembers how his mother, “in typical Jewish-mother fashion,” always urged him to be a doctor, lawyer or engineer when he grew up. “She didn’t say doctor, debt relief agency or engineer,” he recalls.

For Milavetz, the inclusion of lawyers in BAPCPA’s debt relief agency provisions is troubling. And while some of the provisions are merely irritating like a pair of ill-fitting shoes, other provisions are far more serious.

In particular, BAPCPA restricts the advice that a lawyer may give to someone contemplating bankruptcy. Specifically, BAPCPA prohibits a bankruptcy lawyer from advising persons of certain limited means to incur additional debt before filing bankruptcy. This restriction, together with the law’s advertisement and disclosure requirements, strikes at the heart of fundamental First Amendment values.

So Alan Milavetz has taken the issue all the way to the U.S. Supreme Court.

“It’s a huge challenge for any firm to litigate against the federal government, but especially for us,” says Milavetz, noting the firm has 10 lawyers. “But there comes a point when if you think you’re right — and we do — you move on it.”

Milavetz’s four-year odyssey culminates today when the Supreme Court justices hear arguments in Milavetz, Gallop & Milavetz v. U.S.

“This is an evil law prohibiting speech, and among the least powerful people, interfering with their right to get reasonable advice,” Milavetz said. “If we don’t get a judgment that this law is unconstitutional, I have said we will handle no more consumer bankruptcy cases, and we think no true lawyer can handle them as well.”

Source: Law.com

Many of the Federal Rules of Civil Procedure (FRCP) will change in the near future including provisions that impact timing requirements in bankruptcy cases.

The Judicial Conference of the United States, through its Time-Computation Subcommittee, issued proposed amendments to the Federal Rules of Civil Procedure which the U.S. Supreme Court approved on March 26, 2009, to be effective on December 1, 2009.

If you’re like me, you’ve probably been confused or unsure at times when trying to determine whether to include or exclude weekends, or which holidays are considered as such, when calculating federal court deadlines.

Well I have some good news. Things are about to get much easier for us bankruptcy lawyers under the new “Days are Days” approach of time computation. As part of an overall “Time-Computation Project,” FRCP 6(a), which is the rule that governs computing and extending time, has been modified to make the method of computing time consistent and clear.

Currently, the computation of rules involving periods less than 11 days are generally different than for periods more than 11 days—intermediate weekends and holidays are usually omitted when computing shorter periods, but included for longer periods. This discrepancy has led to unnatural results, as it has not been uncommon for a 10-day period and a 14-day period that began the same day to also end on the same day due to intervening weekends and holidays.

Under the revised counting rules also knows as the “Days are Days” approach, intermediate weekends and holidays will be counted, regardless of the length of the specified counting period. A notable exception is when the counting period ends on a weekend or legal holiday, in which case the deadline falls on the next business day that is neither a weekend nor a legal holiday.

To compensate for the new time-computation methods, the Advisory Committee of the Judicial Conference of the United States reviewed every rule to make sure that shorter deadlines would still be reasonable.

To that end, most 5-day deadlines will be extended to 7 days and most 10-day deadlines will be extended to 14 days. The revised rules also implement 7, 14, 21 and 28-day periods as often as possible so that deadlines will almost always fall on weekdays.

FRCP 6 will include a new subdivision (a)(2), which deals with the computation of time periods that are measured in hours.

These hourly deadlines begin to run immediately on the occurrence of an event and will naturally end when the allotted time expires.

If the period ends on a weekend or legal holiday, however, the deadline is extended to the same time on the first business day that is not a weekend or legal holiday.

For example, if a deadline is set to expire at 11:23 a.m. on a Saturday, it will actually expire at 11:23 a.m. on the following Monday.

Another new provision has been added to address the timing of electronic filings: In the absence of a statute, local rule or court order providing otherwise, the last day of a period for an electronic filing ends at midnight, giving lawyers who are pressed for time a few extra hours of leeway.