Make a Difference Volunteer for Ch. 7 Pro Bono Cases

It often comes as a surprise to first-year
lawyers, but there is not "justice for all" in the American legal
system: There is justice for those who can afford counsel, and for those
fortunate enough to qualify for a legal services or pro bono lawyer.
Even if an individual qualifies for a legal services or pro bono lawyer,
there are not enough such attorneys to meet the demand. When an indigent
individual requires legal assistance in the area of bankruptcy law,
there is no certainty that free legal assistance will be available.

</p><p>All lawyers have an obligation to perform legal work on a pro bono
basis. Most of us have taken an oath agreeing to represent, gratis,
those without financial means to engage lawyers. Most bar associations
or state courts regulating attorneys have adopted some version of the
American Bar Association Model Code of Professional Responsibility Rule
6.1, which urges each lawyer to do pro bono work and provide financial
support to groups representing indigents. Some bar associations and
courts, such as some in Florida, require lawyers to either perform pro
bono work or to make a financial contribution to the local Legal
Services Organization. Florida, Maryland, Nevada and Mississippi require
all attorneys to annually report their pro bono work.

</p><p>Bankruptcy practice lends itself to doing pro bono work. This is not
an area where extensive retraining is necessary to do pro bono legal
work. Most of the cases (70 percent) filed in U.S. Bankruptcy Courts are
chapter 7 consumer cases, and most of those (98 percent) are no-asset
cases. Some districts have a low rate of <i>pro se</i> filings; some
have many <i>pro se</i> filings. A district that has perhaps received
the most attention for <i>pro se</i> filings, the Central District of
California, reported a <i>pro se</i> chapter 7 filing rate of 28 percent
in 2002, down from a 1994 rate of 41 percent; the District of South
Carolina reports about a 1 percent chapter 7 <i>pro se</i> filing rate.
Many legal services organizations do not have the staff or manpower to
handle chapter 7 cases, and some set priorities that will only accept
chapter 13 cases where the debtor has a home to save. As a result, many

<i>pro se</i> chapter 7 debtors proceed without counsel, or worse,
individuals who qualify and require the assistance that chapter 7 can
provide do not file for lack of understanding the law. These cases
proceed slower than ones represented by counsel and often have problems
with improper or no exemptions being claimed, lien-avoidance actions not
being filed and undefended discharge actions. The court, clerk's office
and Office of the U.S. Trustee all get involved in the processing and
handling of <i>pro se</i> cases. The Code that is designed to give
consumer debtors a fresh start often does not function unless trained
bankruptcy counsel represent those consumers.

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[E]ven attorneys with large creditor practices can find ways, without
conflicts, to do pro bono.
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<p>Passage of the Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005 (P.L. 109-8) will have an impact on bankruptcy pro bono
work. Before the law's effective date (Oct. 17), there will likely be a
surge in individuals filing under the old law; when the new restrictions
on consumer filings go into effect, many existing pro bono volunteers
may be reluctant to handle chapter 7 cases, given the new liability that
debtor's counsel assumes under the revised 11 U.S.C. §707(b). Yet
most chapter 7 cases referred by a legal services or pro bono
organization come well under the median family income, one of the
standards of the new means test. Most legal services and pro bono
referral services carefully screen each client for income
qualifications, so there is also the comfort in knowing that someone, in
addition to the volunteer attorney, has screened the prospective debtor
for being properly qualified as a chapter 7 debtor. The cases referred
are usually individuals with income equal to or under 125 percent of the
federal poverty guidelines. As an example, in 2005 the Federal Poverty
Guideline for a family of four in South Carolina is $19,350; 125 percent
of that figure is $24,187.50. This is the cut-off figure for a family of
four to qualify for legal services or pro bono services in South
Carolina. The 2005 median family income for a family of four in South
Carolina is $56,433, or more than double the Federal Poverty Guidelines.
So under the 2005 Code changes, there is no presumption of abuse in
these cases. With the exception of a change in forms, there should be
little change in the handling of pro bono chapter 7 cases.

</p><h4>Reasons to Do Pro Bono Cases</h4>

<p>Pro bono work is a great way to train new lawyers on bankruptcy: The
Code sections, the U.S. Trustee Guidelines and the Local Rules work the
same as they do in business cases. In a large firm, an associate may not
get to argue motions for billable clients until later in his or her
legal career; that same first-year associate, with proper supervision
and training, can make court appearances during a pro bono bankruptcy,
begin acquiring courtroom experience and learn client-interview skills.

</p><p>There is no doubt that courts appreciate a case being handled by
counsel in lieu of the debtor appearing <i>pro se. Pro se</i> cases
usually do not work well; the debtors have trouble with exemptions,
discharge issues and compliance with court requirements. <i>Pro se</i>
cases usually take more bench and trustee time as the uninformed,
unrepresented debtors make their way through a complicated system. As
more courts go online with case management/electronic case filing, it
will be even more difficult for an individual <i>pro se</i> debtor to
navigate through the system.

</p><p>For some bankruptcy attorneys, it can be a refreshing change of
pace—shifting gears from dealing with a major chapter 11 case to
trying to save an individual's home or vehicle. A hug and an expression
of gratitude from a pro bono debtor can be as gratifying as the payment
of a client bill, although some may disagree. Pro bono bankruptcy cases
are great for morale for both the attorneys and staff that are involved
in the case. It is often difficult for the attorneys working on a large
corporate chapter 11 case to feel a connection to the entity being
represented; in an individual bankruptcy case, the volunteer attorney
meets individuals with serious financial problems and has the
opportunity to turn their lives around.

</p><h4>Types of Pro Bono Work</h4>

<p>While the biggest demand for assistance on pro bono cases comes at
the individual level, even attorneys with large creditor practices can
find ways, without conflicts, to do pro bono. Participation in a
bar-sponsored bankruptcy clinic, where the bankruptcy law is explained
to a group of people and individual representation is not undertaken, is
of great assistance. Many government lawyers, uncomfortable with doing
pro bono work in a courtroom, find doing work for a clinical program a
meaningful way to participate. Check with your local bar association for
clinic schedules.

</p><p>Volunteer to serve as a mentor to a less-experienced bankruptcy
attorney who agrees to take on pro bono cases. Help with the legal
issues, but also introduce the new attorney to trustees and judges, and
help with local procedure and tips that are not available through
readings.

</p><p>Working with the local bar pro bono program in reviewing and
referring qualified cases to pro bono volunteers is of value to a pro
bono program. It is often more difficult to say no to a new pro bono
case when the referring attorney is a colleague.

</p><p>In districts where debtor's counsel may limit their representation,
pro bono volunteers are used to represent debtors in a relief-from-stay
action or an adversary proceeding. In these cases a creditor's lawyer
that may have conflicts representing the debtor in the main case can
take on representation of a debtor in a relief-from-stay action or in an
adversary proceeding in a limited, discreet way.

</p><h4>Resources</h4>

<p>Bankruptcy pro bono programs are usually initiated by either the bar
or by the judiciary. Most formal pro bono programs have free malpractice
coverage available to their volunteers for work done on assigned pro
bono cases. There are various models to follow upon creating a
bankruptcy program, and there are many resources available. The American
Bar Association has a wonderful resource, a pamphlet entitled "How to
Begin a Pro Bono Program in Your Bankruptcy Court, a Starter Kit for
Lawyers and Judges," and it can be found at <a href="http://www.abanet.org/buslaw/probono/bank_kit.pdf">http://www.abanet.or…;.

</p><p>Grants to fund pro bono programs involving bankruptcy may be received
from the American College of Bankruptcy and the American College of
Bankruptcy Foundation (<i>see</i> <a href="http://www.amercol.org">http://www.amercol.org</a&gt;. More than
$140,000 in grants has been given to organizations in 23 states and the
District of Columbia for training, creating web sites and conducting
studies of consumer bankruptcy issues, and even for filing fees. Grant
funds are donated by the College and the College Foundation year-round,
and applications may be found on its web site.

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<h3>Footnotes</h3>

<p>^{<small><a name="1">1</a></small>} Board Certified in
Business Bankruptcy and Consumer Bankruptcy Law by the American Board of
Certification. <a href="#1a">Return to article</a>