Talk to bankruptcy lawyers about their careers. Ask your school counselor to arrange an information interview. Many Web sites offer information on bankruptcy. Visit https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics for a glossary of bankruptcy-related terms and an overview of bankruptcy basics. Read blogs about bankruptcy, such as NACBA Now, whose website you can find at https://nacbanow.com.
If you are already in law school, you might consider becoming a student member of the American Bar Association. Student members receive Student Lawyer, a magazine that contains useful information for aspiring lawyers. Sample articles from the magazine can be read at https://abaforlawstudents.com/stay-informed/student-lawyer-magazine/. The American Bankruptcy Institute (ABI) publishes several publications for bankruptcy professionals including the ABI Journal and ABI Law Review. Visit https://www.abi.org to learn more. The American Bankruptcy Law Journal (https://www.ncbj.org/page/AmerBankLawJour) is published by the National Conference of Bankruptcy Judges.
“Bankruptcy is a gloomy and depressing subject,” noted Charles Warren, a legal scholar and the author of Bankruptcy in United States History. But despite negative perceptions of bankruptcy, bankruptcy lawyers play an important role in helping individuals recover from financial ruin. They also help financially weakened companies and other business entities (such as limited and general partnerships), governments, and other organizations to reorganize and return to financial solvency.
There are six types of bankruptcy cases that are provided for under the U.S. Bankruptcy Code: Chapters 7, 9, 11, 12, 13, and 15. The cases are named after the titles in the code that describe them. All bankruptcy cases are heard in federal district courts that specialize in bankruptcy cases. Visit http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics for a detailed explanation of each type of bankruptcy chapter.
When an individual or organization faces extreme financial difficulties in which debts cannot be paid, the organization or individual can file for bankruptcy in federal court. There are generally two forms of bankruptcy proceedings. In the first proceeding, the lawyer for the debtor presents a financial plan to pay back all or some of the client’s debt to creditors within a certain period of time. In the second type of proceeding, the bankruptcy court initiates the sale of a debtor’s assets and distributes the proceeds among the creditors.
Debtors typically enlist the services of a bankruptcy lawyer or a team of lawyers (when the bankruptcy of a large organization or government municipality is involved) to file a petition for bankruptcy protection in federal court and otherwise represent them during legal proceedings.
According to the Administrative Office of the U.S. Courts, 772,646 bankruptcies were filed in the United States between March 2018 and March 2019. Of these, just over 97 percent were initiated by individuals. In a typical case, the bankruptcy lawyer first meets with the individual who is considering filing for bankruptcy to discuss the individual’s financial situation. The lawyer reviews financial documents provided by the client to determine if bankruptcy protection should be requested, and explores other options such as consumer credit counseling programs and other debt modification and settlement options. If bankruptcy protection is determined to be the best option for the client, the bankruptcy lawyer determines under which chapter the case should be filed. At times, the lawyer may be able to suggest alternatives to filing for bankruptcy, but there are many instances in which a bankruptcy petition is the best and only scenario for an individual who is in extreme financial distress.
If filing for bankruptcy is the only option, the lawyer explains the various types of bankruptcy filings and presents an overview of bankruptcy law and the legal process. Chapter 7 bankruptcy protection is by far the most common type filed by individuals. It involves an almost complete liquidation of the debtor’s assets and a discharge of most debts. If the client and bankruptcy lawyer agree that bankruptcy protection is necessary, the lawyer petitions the court for such protection. He or she files a statement of the client’s assets and liabilities, as well as a list of creditors. Then the lawyer represents his or her client during pretrial proceedings, court appearances, settlement conferences, and other case-related events—keeping the client up to date on the status of the case via telephone, e-mail, mail, and in-person meetings.
Bankruptcy lawyers also work for creditors who are seeking payment from debtors, for corporations who purchase failing businesses as investments, and for businesses that deal in financial restructuring or liquidation. Some work as law school educators. Others write for legal publications or serve as media experts on bankruptcy law. Many bankruptcy lawyers are self-employed. In addition to representing clients, bankruptcy lawyers who own their own businesses are responsible for the business operations of their offices; manage paralegals, legal secretaries, and other support staff; and promote their businesses in order to attract new clients.