Debtors Abused by the Bankruptcy System

Broken Promises: Bankruptcy is advertised as the solution to financial problems.
Bad, lazy or greedy attorneys fail to warn clients about the problems they could face in bankruptcy.

People in financial distress look to attorneys for help and guidance.  They assume their attorneys care more about them than about the attorney’s bank account. An attorney is ethically required to have the skill and knowledge in order to offer good advice to their clients.  Attorneys are not supposed to take more clients than they can efficiently and professionally assist.  Law firms that mass-produce bankruptcies are treating their clients like cattle – herding them into a holding pen for slaughter, with little regard about the legal consequences to those clients (losing their home, tax refunds or inheritance, to name a few problems).
The United States Trustee, the trustees, and their attorneys
The United States Trustee is aware that lawyers and law firms are mistreating their clients, but with few exceptions, they fail to take action to curb the abuses (at least where I practice).  Some Bankruptcy Trustees and their attorneys view the debtors as walking cash registers.  They keep cases open that should be closed, they collect funds for themselves that should be used pay taxes, the sins go on and on.
“A Bankruptcy Christmas”
For a very insightful expose’ on how bad this process has become – watch Stephen Berken‘s YouTube presentation “A Bankruptcy Christmas“.  He is not afraid to call a turd a turd.

MUSINGS FROM DIANE:
The bankruptcy system was designed to help individuals and businesses get a fresh start.  That fresh start comes in many flavors – depending on the debtors and their goals.  Unfortunately, the process has become so corrupt that some trustee’s attorneys regularly earn approximately ONE MILLION DOLLARS a year (much of that money is from debtors who did not have attorneys or whose attorney abandoned them).  The only conclusion is that the process is broken.

A good debtor’s attorney should look out for their client, that includes helping their client avoid obvious problems. The system should not rely on the debtor’s attorney to bring an action against a bad attorney who is abusing their own clients. But, in 2019 that was dropped in my lap.  The chapter 13 trustee and US Trustee said they just “thought this young attorney was sloppy”.  I had to take months of my time to bring the spot light on the bad attorney.  Others started to pay attention once I exposed the terrors this attorney suffered on his clients, but why did I have to do their job (they get paid for this type of work, I don’t).
Sorry for the whining :-(

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