For the uninitiated, it may seem that bankruptcy cases should always be handled on a pro bono basis, because the client is always too broke to pay for good legal advice. In fact, many bankruptcy filers acting in proper person end up facing litigation involving such illogical issues as nondischargeability of a single debt, or the inability to discharge any debt. (For more detailed information on the discharge of debt in bankruptcy, see What Happens to Your Debts in Bankruptcy).
These allegations can be serious and filers are not prepared to defend these cases. However, it is difficult to convince an attorney to become involved in the middle of a bankruptcy action. That is why the Clark County Pro Bono Project has expanded its services to cover bankruptcy actions.
The judges have been very grateful for pro bono services to help clear and streamline their calendars and have been referring people to use the service. The court grants the added benefit of priority on the hearing docket. The clients who find themselves lost in the legality of the moment are also grateful. Following the recent change in the bankruptcy code, this is true more than ever before.
I have accepted and worked pro bono bankruptcy cases. Some cases start from the very beginning of preparing the petition, some deal with a case that has been converted to a new type of bankruptcy and some involve claim litigation. The legal issues are very different than a standard civil case.
One client was on the brink of losing her car and her house because she could not create a workable budget. Fortunately, we were able to delay the worst consequences until she could sell the house and benefit from the increased equity that had accrued in her house. The ability to navigate and negotiate with the Chapter 13 trustee resulted in a benefit to the debtor and payment to the creditors. Without attorney assistance, she would have lost all of her assets through foreclosure and repossession within a few months and been unable to provide for her three children.
Litigation cases are always daunting, even when there are promises of paid fees. The court’s use of good settlement judges allows a debtor to resolve these disputes to their best advantage, but without counsel, the terminology and legal force behind the allegations may cause the unprepared debtor to lose all ability to get the benefit on bankruptcy. Since the new law includes significant restrictions upon re-filing second or third bankruptcy after a case is dismissed, debtors are under even more pressure to get it right the first time.
While many bankruptcy practitioners have stopped doing debtor work under the new law, they should consider taking on pro bono cases involving claims litigation. The likelihood of a successful case is substantially higher with legal counsel than without that counsel. For some people by unexpected financial disaster, a pro bono attorney may be the only hope. The pro bono attorney, in turn, receives the benefit of making the bankruptcy system work.
To learn more about the bankruptcy process and information on handling your own case, see our section on Bankruptcy Filing and Procedures.
Timothy P. Thomas, Esq. is Senior Partner at the Law Office of Timothy P. Thomas, LLC, and has practiced in the U.S. Bankruptcy Court and Nevada Courts for more than 18 years.
Published in the April 2006 issue of Communiqué, Las Vegas Nevada
