Bankruptcy Boom Is Big Business For Lawyers As the U.S. economy sours, a growing number of people are being forced into bankruptcy. More than 1 million people filed for bankruptcy last year. This trend is attracting new attorneys to one part of the legal profession: consumer bankruptcy law.
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Bankruptcy Boom Is Big Business For Lawyers

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Bankruptcy Boom Is Big Business For Lawyers

Bankruptcy Boom Is Big Business For Lawyers

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More and more Americans are finding themselves so deep in debt that they are filing for bankruptcy. That's creating a boom for consumer bankruptcy lawyers. From California, NPR's Richard Gonzales has this report.

RICHARD GONZALES: A typical day for Christine Beckler starts like this.

MONTAGNE: Hi, Shannon, this is Chris. I'm calling from the office of Ike Shulman, where we received a phone call. Please give us a call...

GONZALES: Beckler is the case manager for a bankruptcy law firm in San Jose. She has a fistful of phone messages.

MONTAGNE: When I'm coming in, I'm finding I have 18 to 20 phone messages that have been left in the evening. I'm receiving 20 to 25 e-mails daily on our Web site. And as you see here in my hand, I have over 30 calls that I have to get back to that are just from today.

GONZALES: Among her pile of callbacks, Beckler even finds one from a family member. A few months ago, you could get an appointment here the next day. Now, the wait is at least two weeks.

MONTAGNE: And these are all members of our community. You'll see that they are of every race, every age group. And I don't see it leveling off; it's just beginning.

GONZALES: More than 95,000 people filed for bankruptcy in California last year; that's more than double the number from 2007. Attorney Ike Shulman, Christine Beckler's boss, says a typical client arrives reluctantly, carrying a heavy burden.

MONTAGNE: I can tell you, everyone that I meet with feels bad coming into the office, and it's not because of me. It's because they don't want to be there.

GONZALES: Shulman is a co-founder of the National Association of Bankruptcy Attorneys. He sees everyone from bankers to teachers, who have burned through their savings, their 401(k)s, and help from family and friends.

MONTAGNE: But ultimately, they come to the realization that there is no other avenue, and their health is starting to suffer because they wake up every day with a mountain of debt in front of them. And it can be a very debilitating thing. So for almost everybody I see, bankruptcy is really the only financial alternative left to them.

GONZALES: And this flood of new clients is attracting new attorneys. The number of bankruptcy lawyers jumped about 30 percent last year. One is Tilden Moschetti in San Francisco. He says guiding clients through bankruptcy beats handling divorces.

MONTAGNE: It was really a chance for me to do what I really like - interact a lot with clients. Gives me a chance to help clients because, you know, at the end of the day, they can wind up better with bankruptcy than in divorce, where everybody loses.

GONZALES: This demand for bankruptcy lawyers comes after they were nearly put out of business four years ago. That's when Congress, at the urging of the credit-card industry, changed the law to make it harder for consumers to file for bankruptcy. Filings dropped off dramatically and dried up the field for lawyers, says Ike Shulman.

MONTAGNE: The credit-card companies thought shutting bankruptcy down by changing the law and making the process almost unmanageable - was a key element of what they were trying to do. And it was aimed at making the lawyer's life miserable.

GONZALES: Now, the nation's economic misery is money in their pocket. But Shulman cautions any attorney looking to get rich.

MONTAGNE: People attracted to doing consumer bankruptcy work, by and large have to have some sympathy for the underdog - not going into law because you think you're going to hit the financial lottery. It's not the type of practice, I think, that people will go into thinking, this is where I'm going to make my millions.

GONZALES: Richard Gonzales, NPR News, San Francisco.

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