- “Currently, qualified solicitors who declare themselves bankrupt usually go before the Solicitors Disciplinary Tribunal, although lawyers are rarely struck off for bankruptcy alone. Concerns have also been heightened by last month’s Commons vote backing legislation to introduce university tuition fees.”
- However, Linklaters graduate recruitment partner Simon Firth said that he would consider each student individually. “We would have a problem with someone who has done something improper, but there is a difference between getting into financial difficulty and someone trying to shirk their obligations,” he said.
P.S. It just occured to me to ask the question this way: “Would or should the client care that the first thing a lawyer did after graduating from law school was to declare bankruptcy to escape his or her debts?” Maybe lawyers who choose bankruptcy should be required to then serve in a legal services office or do similar public service before cashing in on that law degree. Hmmm.
update (Sept. 3, 2005): Going through my Keyword Activity page, I ran across a Google query about bankruptcy and bar admission. I number of state bar admission websites have the following Q&A, which is reproduced here from the FAQ webpage of the Georgia Office of Bar Admission:
15. WHY ARE FINANCIAL PROBLEMS, SUCH AS PAST DUE DEBTS OR AN OLD BANKRUPTCY, RELEVANT TO MY ADMISSION?
The Fitness Board recognizes that law students sometimes have financial problems associated with the expense of law school, or with ongoing family obligations. The Board also recognizes that mishandling of client funds is a frequent and serious cause for professional discipline. Admission to the bar does not require a perfect credit record. The Board is interested in whether applicants have dealt honestly and responsibly with their creditors, and whether they are doing so at the time of application. Responsible dealings generally include but are not limited to keeping in contact with the creditor, making payment arrangements, and meeting the terms of those arrangements. Defaulted student loans and failure to make child support payments are of particular concern to the Board and may well lead to denial of admission if not resolved at the time of application or soon thereafter.
An intereting question.
When I first got out of law school, I was essentially unemployed for six months, working about 15 hours a week at a local bookstore while traveling all over Mississippi looking for jobs. I was tempted several times to declare bankruptcy, but fortunately did not have to.
I’m a little sceptical about young lawyers that have declared bankruptcy, especially given the inherent ease of dealing with creditors when you are a lawyer. I am far less concerned about people who have declared bankruptcy becoming lawyers, though. And I can’t really say why.
Comment by Scipio — February 10, 2004 @ 11:20 am
An intereting question.
When I first got out of law school, I was essentially unemployed for six months, working about 15 hours a week at a local bookstore while traveling all over Mississippi looking for jobs. I was tempted several times to declare bankruptcy, but fortunately did not have to.
I’m a little sceptical about young lawyers that have declared bankruptcy, especially given the inherent ease of dealing with creditors when you are a lawyer. I am far less concerned about people who have declared bankruptcy becoming lawyers, though. And I can’t really say why.
Comment by Scipio — February 10, 2004 @ 11:20 am
I am a former software developer. Back in the good ol’ days, I made decent money, and was smart and saved a good portion of it. Then along came the double whammy of “economic downturn” and “overseas outsourcing”. To cut to the chase, since I was frequently employed as a 1099 worker, when I lost work over two years ago, I was not able to collect unemployment. I have also not been able to find a full time job. I’ve applied for jobs far below my training level and been rejected several times… citing “You’ll just leave when something better comes along.” I’ve been making ends not-quite-meet and supporting my also unemployed wife off part time gigs and whatever menial labor I can find. But we have expenses like a mortgage and car payments, things I don’t find unreasonable. We tapped our savings about a year ago, and, ever faithful of an economic recovery, lived off our credit cards for a while. Neither one of us comes from money, our families have helped when they can, but they can’t always afford it either. Now, a year after this, the creditors are gathered outside our door and salivating like wolves. They want their money. I want to give them their money. I can’t. I simply can’t. Are any of them willing to work with us? No. Several referred us to some “credit counseling agencies” who “work with us to lower your interest rates and payments”. When faced with this option, I asked why I had to pay an outside agency a setup fee and a monthly fee, why couldn’t I just negotiate a lower rate/payment directly with them, I was told (repeatedly) it was a matter of policy. Being who I am, I did some research: policy is that many of the “consumer credit agencies” are actually owned in whole or in part by the credit card companies themselves. So how objective can they be? So now, we are facing bankruptcy, and not for want of a better solution. We’ve tried to negotiate with creditors unsuccessfully. We’ve both been actively trying to get work in our respective fields, to no avail. We’ve both taken lower paying, unskilled jobs when we could to try to make ends meet. But we’re still going to (most likely) have to file. Can you explain to me exactly how this is supposed to indicate some weakness in our character? That’s total [b.s.].
Comment by Anonymous Coward — February 10, 2004 @ 11:55 am
I am a former software developer. Back in the good ol’ days, I made decent money, and was smart and saved a good portion of it. Then along came the double whammy of “economic downturn” and “overseas outsourcing”. To cut to the chase, since I was frequently employed as a 1099 worker, when I lost work over two years ago, I was not able to collect unemployment. I have also not been able to find a full time job. I’ve applied for jobs far below my training level and been rejected several times… citing “You’ll just leave when something better comes along.” I’ve been making ends not-quite-meet and supporting my also unemployed wife off part time gigs and whatever menial labor I can find. But we have expenses like a mortgage and car payments, things I don’t find unreasonable. We tapped our savings about a year ago, and, ever faithful of an economic recovery, lived off our credit cards for a while. Neither one of us comes from money, our families have helped when they can, but they can’t always afford it either. Now, a year after this, the creditors are gathered outside our door and salivating like wolves. They want their money. I want to give them their money. I can’t. I simply can’t. Are any of them willing to work with us? No. Several referred us to some “credit counseling agencies” who “work with us to lower your interest rates and payments”. When faced with this option, I asked why I had to pay an outside agency a setup fee and a monthly fee, why couldn’t I just negotiate a lower rate/payment directly with them, I was told (repeatedly) it was a matter of policy. Being who I am, I did some research: policy is that many of the “consumer credit agencies” are actually owned in whole or in part by the credit card companies themselves. So how objective can they be? So now, we are facing bankruptcy, and not for want of a better solution. We’ve tried to negotiate with creditors unsuccessfully. We’ve both been actively trying to get work in our respective fields, to no avail. We’ve both taken lower paying, unskilled jobs when we could to try to make ends meet. But we’re still going to (most likely) have to file. Can you explain to me exactly how this is supposed to indicate some weakness in our character? That’s total [b.s.].
Comment by Anonymous Coward — February 10, 2004 @ 11:55 am
Dear A.C., I’m sorry that you’ve had to deal with so much financial (and therefore personal) travail. My question did not concern all people who choose bankruptcy. It concerns recently graduated lawyers (most young and with no stories of tribulation like your own), who went to school knowing it would be expensive and would come out with a valuable degree. They choose the “easy” way of bankruptcy before any attempt to responsibly meet their obligations.
I asked if that scenario should be taken into account when deciding whether such folks are to become fiduciaries and officers of the court. I think a lot of clients would think it relevant when dealing with a profession whose integrity they often doubt.
I am not judging all who choose bankruptcy, although there clearly are people who abuse that system. When my chronic illness struck and took away my livelihood, I also considered bankruptcy. I think you might reconsdier dealing with credit counseling agencies, to see if they come up with a plan you can handle. Check the FTC website [ http://www.ftc.gov ]for info on choosing such an agency and protecting your rights. Credit card companies often do subsidize these agencies, because the companies would much rather have you pay some slowly than go bankrupt. That doesn’t necessarily make the agency less objective than when you deal directly with the credit card companies.
Good luck.
Comment by David Giacalone — February 10, 2004 @ 12:33 pm
Dear A.C., I’m sorry that you’ve had to deal with so much financial (and therefore personal) travail. My question did not concern all people who choose bankruptcy. It concerns recently graduated lawyers (most young and with no stories of tribulation like your own), who went to school knowing it would be expensive and would come out with a valuable degree. They choose the “easy” way of bankruptcy before any attempt to responsibly meet their obligations.
I asked if that scenario should be taken into account when deciding whether such folks are to become fiduciaries and officers of the court. I think a lot of clients would think it relevant when dealing with a profession whose integrity they often doubt.
I am not judging all who choose bankruptcy, although there clearly are people who abuse that system. When my chronic illness struck and took away my livelihood, I also considered bankruptcy. I think you might reconsdier dealing with credit counseling agencies, to see if they come up with a plan you can handle. Check the FTC website [ http://www.ftc.gov ]for info on choosing such an agency and protecting your rights. Credit card companies often do subsidize these agencies, because the companies would much rather have you pay some slowly than go bankrupt. That doesn’t necessarily make the agency less objective than when you deal directly with the credit card companies.
Good luck.
Comment by David Giacalone — February 10, 2004 @ 12:33 pm
…should be noted that educational loans are difficult to discharge through bankruptcy. See
http://www.finaid.org/questions/bankruptcy.phtml
Comment by tex — February 11, 2004 @ 5:48 pm
…should be noted that educational loans are difficult to discharge through bankruptcy. See
http://www.finaid.org/questions/bankruptcy.phtml
Comment by tex — February 11, 2004 @ 5:48 pm
Great point, Tex. Just this morning, I had made a mental note to check this out, but then forgot to do it. I just looked at the webpage you cited, and it does a very good job explaining the issue of discharging student loans — basically, you can’t do it if the loan is made for educational purposes by a nonprofit organization or a program supported by government funds, unless there is a showing of special hardship. School expenses charged on credit cards are dischargeable. Thanks for this helpful tip.
Comment by David Giacalone — February 11, 2004 @ 6:03 pm
Great point, Tex. Just this morning, I had made a mental note to check this out, but then forgot to do it. I just looked at the webpage you cited, and it does a very good job explaining the issue of discharging student loans — basically, you can’t do it if the loan is made for educational purposes by a nonprofit organization or a program supported by government funds, unless there is a showing of special hardship. School expenses charged on credit cards are dischargeable. Thanks for this helpful tip.
Comment by David Giacalone — February 11, 2004 @ 6:03 pm
Tex said it first, but the better solution for the Brits is not to make the legitimate availment of a legal course of action a bar to lawyerdom, but rather to try to curtail the dischargeability of those debts that might permit someone to abuse the system. Student loans are EXTREMELY hard to discharge in the U.S., (perhaps too hard) so bankruptcy can be a remedy that acknowledges hard times (and as A.C. pointed out hard times themselves absolutely DO NOT indicate some kind of moral flaw in the human being they happen to) without giving recent law or medicine grads a “get out of expensive tuition debt free” ticket.
I find the “morality police” aspect of the bar overseers really hard to swallow. Just another barrier to entry for people who didn’t follow a particular, conventially-accepted path into the profession.
Comment by Scheherazade — February 11, 2004 @ 6:46 pm
Tex said it first, but the better solution for the Brits is not to make the legitimate availment of a legal course of action a bar to lawyerdom, but rather to try to curtail the dischargeability of those debts that might permit someone to abuse the system. Student loans are EXTREMELY hard to discharge in the U.S., (perhaps too hard) so bankruptcy can be a remedy that acknowledges hard times (and as A.C. pointed out hard times themselves absolutely DO NOT indicate some kind of moral flaw in the human being they happen to) without giving recent law or medicine grads a “get out of expensive tuition debt free” ticket.
I find the “morality police” aspect of the bar overseers really hard to swallow. Just another barrier to entry for people who didn’t follow a particular, conventially-accepted path into the profession.
Comment by Scheherazade — February 11, 2004 @ 6:46 pm
Hi, Sherry, I was hoping you’d give us your perspective (recently grad plus bankruptcy maven). Your points are well taken.
What do you think about folks who live rather a high life in the student years (e.g., new car loans or leases, expensive cell phone plans, lots of electronics and gadgets, spring break vacations, dining and partying out bills, etc.)? Would discharging a five-digit credit card debt right out of school be relevant to bar character issues? Old fogeys (who lived on a real “student” budget and never had a car until after law school) want to know.
Comment by David Giacalone — February 11, 2004 @ 7:57 pm
Hi, Sherry, I was hoping you’d give us your perspective (recently grad plus bankruptcy maven). Your points are well taken.
What do you think about folks who live rather a high life in the student years (e.g., new car loans or leases, expensive cell phone plans, lots of electronics and gadgets, spring break vacations, dining and partying out bills, etc.)? Would discharging a five-digit credit card debt right out of school be relevant to bar character issues? Old fogeys (who lived on a real “student” budget and never had a car until after law school) want to know.
Comment by David Giacalone — February 11, 2004 @ 7:57 pm
Your site is realy very interesting!
Comment by Daniel — September 16, 2005 @ 6:18 pm
Your site is realy very interesting!
Comment by Daniel — September 16, 2005 @ 6:18 pm