Bankruptcy Consultation, Without Straight Answers, I Can’t Help

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Reposed with the permission of Matt Berkus

A bankruptcy consultation is time for honest discussion. From time to time, I have those consults where the prospective client won’t give a straight answer to a relatively simple question. At that point, it is time to cut the consultation short because there is no way to help that person.

I had such a bankruptcy consultation over a year ago, but it still sticks with me and I think about it occasionally.  A woman comes in for a bankruptcy consultation. The situation is already looking bad because she brought multiple file folders with papers jammed in each one (green flag with a black dot).  We go through basic introductions; I ask what is wrong that she may need my help, etc. Very early in the conversation, I ask how much income do you earn? Now we are off to the races.

Me: How much income do you earn?

Prospect: Do you mean taxable income? (yellow flag goes up)

Me: No, how much money do you earn, in total?

Prospect: What I am entitled too? (yellow flag with black circle)

Me: Let’s back up, do you earn money?

Prospect: Yes (finally, a simple answer, back to yellow flag)

Me: How much?

Prospect: What I am entitled to or what do I get? (darn it, back to yellow flag with black dot)

Me: Let’s start with what you get?

Prospect: Gross or net? (fair question)

Me: Gross?

Prospect: I need to explain? (red flag)

Me: Hold on, for right now, I just need a number?… It went on like this for 10 minutes

I believe my last question was something like: “does someone give you money each month?” Prospect: Yes. Me: How Much? She never gave an answer.

That excerpt is just a little bit of the dialog we had on her income (or lack thereof) at her bankruptcy consultation. The exchange over income went on for about 10 minutes. She never gave me a number, any number. She always wanted to explain, always wanted to dodge, or wanted to provide clarification. Even when I slightly capitulated and asked; “Okay, how much taxable income;” she didn’t answer because she had not filed tax returns in 3 years.  I put up the red flag. I got up out of my chair, walked around the desk, and thanked her for coming. I politely informed her that I couldn’t help her, and invited her to leave.  Thankfully, the consultation only lasted about 15 minutes.

Had I been a new or inexperienced attorney, I might have tolerated it and continued the discussion, and maybe even quoted a fee and offered services. If a prospect won’t provide an answer to a question, or needs to qualify their answer in a peculiar way, the case is going to be a minefield and likely blow up. The prospect is already trying to out-smart the system. So, in all likelihood, the prospect has done things that will cause the case to explode in your face and then blame you, not good.

I handle these bankruptcy consults in two ways. In this particular case, I simply refused to offer services. However, I rarely do that, in over 2,000 bankruptcy consultations in just the last 5 years, I can count on one hand the number of times I refused. I can usually help the person. More frequently, I will quote a very high (but reasonable) fee that I don’t think the prospect can pay; but if they pay, I help and am fairly compensated for the complexity and time committed to the case.

[Side note, the flag reference harkens to my childhood at Balboa Beach, CA and the surf condition flags posted by the lifeguards]

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