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January 09, 2008

More Reasons Bankruptcy is a Good Practice Area for Solos

If you have followed my blog you know I believe bankruptcy will be a great area for solos to get into for a myriad of reasons.  Here is just one more reason to consider this practice area which will give you many clients.  According to the Bankruptcy Law Network:

Proposed new bankruptcy legislation designed to help troubled homeowners will benefit consumers without hurting the industry.  It would allow consumers with bad home loans to get help from the bankruptcy court. 

If you haven't read it already, there is a strong push to stop the catastrophic foreclosures created as a result of sub-prime lending practices.  Better to keep people in their homes then deal with the fall out that would put further pressure on the economy.

By putting in place new bankruptcy legislation to aid those in distress, there are opportunties as it's fair to say the process will require legal assistance.  The record number of foreclosures is astounding meaning there is plenty to go around in all cities

Now let's talk the Credit Card Crunch:

THE SUBPRIME-MORTGAGE crisis has cost millions of homeowners their homes. Now it threatens to put the squeeze on even more consumers by spilling into the credit-card market.

The bad news is pretty straightforward: With home equity dried up, consumers are piling up credit-card debt at a rapidly increasing pace. As of the third quarter of 2007 (the latest for which data is available), credit-card balances increased by 7% on an annualized basis, according to statistics compiled by market research firm TowerGroup. Compared to the average annual increases of 2% over the previous six years, it's clear that we are fast becoming a country precariously living on borrowed money.

"Consumers are being squeezed out of the credit markets," explains Dennis Moroney, senior research analyst at TowerGroup. "They've used up their home equity to finance their lifestyle, but now with that not available, you're seeing a rise in credit balances and a rise in delinquencies."

Our illustrious leader, though arriving late to the ball, has finally acknowledged the 'R' word, too.  And you know when there is actual acknolwedgment, we are already in the thick of things.  But recession is not 'official' until it is declared by the National Bureau of Economic Research (NBER):

The committee hasn't discussed the "R word" in the current context, says Robert Hall, a Stanford University economics professor who has chaired the recession dating panel since its inception.

That's not a surprise, even if a recession is in progress. In a memo posted on its website Tuesday, the NBER said it typically declares the start of a recession six to 18 months after it happens.

With changing economic times you should be open to new opportunities.  Regardless some of the challenges facing those who want to consider bankruptcy as a practice area, one needs to give it serious consideration because, unfortunately, there will be plenty of work to go around for years to come and you may actually be able to do some serious good for many.

Links of Interest:

Fleeing Bankruptcy....

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Comments

Chuck Newton

Susan, you need to take the plunge into bankruptcy.

I agree with your analysis and have exceptions.

I have a great deal of experience in the field.

Whether you can succeed well in consumer bankruptcy depends greatly on where you practice. Fees, how they are paid and collected vary from district to district, and even within districts. Many districts are very restrictive in both practice and money. Money is obviously the amount of money you can make. Practice determines how much it takes to get a case through.

The other thing is that consumer bankruptcy is typically dominated by large practices. It is very difficult to compete with these firms unless you keep your operation very small and your expenses very low.

Also BAPCPA has greatly complicated the practice. There is no room for error and the practice becomes much harder for a solo to handle cases without staff. This increases costs.

One of the attorneys in my group is detailing his practice in writing. He brings in about 8 cases a month and handles then himself, while working with me on my practice. The problem he has overcome is cost effectively bringing in paying clients.

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