There is no substitute for building trust with clients. It establishes open lines of communication, increases cooperation and ultimately drives the profitability of a law practice. Clients who trust their lawyer are eager to meet their lawyer’s needs, making the working relationship enjoyable for the lawyer and supporting staff. Yet, increasingly, I hear lawyers voice their frustration with the practice of law and specifically with clients who demand too much of their time, or clients who are not eager enough to support the lawyer in meeting the client’s objectives. A lack of trust or a breach of trust is often at the root of these problems.
Trust is Determined by the Client
Trustworthiness of the lawyer is a subjective determination made by the client. If this feels like a burden to lawyers, well, welcome to the practice of law. Another way to look at the subjectivity of this determination is that it’s an opportunity. A lawyer who believes that every interaction with a client will result in either building or diminishing trust looks for—and creates—opportunities to strengthen the relationship at every turn. Bankruptcy lawyers are no exception.
Bankruptcy clients are admittedly anxious and fearful. They don’t know who to trust. They’ve often been lied to and they’ve been told numerous stories. They feel like they are failing, which leads to embarrassment and often anger. To boot, they typically enter the lawyer-client relationship with a perception of lawyers that has the potential to be an ongoing barrier for both the lawyer and the client.
What’s a lawyer to do?
Rather than resent a client who is reluctant to give information or calls too often, try a different approach. Imagine what their experience must be like. Put yourself in their shoes. Actually connect with the anxiety that comes from a phone that won’t stop ringing; every caller a constant reminder of your failure to meet your obligations. You may not have gone through a bankruptcy, but surely you’ve been anxious, angry.
The next time you interact with a client, listen for cues to their emotional state. Does their tone of voice change when discussing a particular creditor or an upcoming financial hurdle? If so, use that as an opportunity to openly reflect that you have been thinking about them and their situation. Ask them how they are feeling. Guess at how they might feel. And then let them talk. You’ll be surprised by the results.
Trust can be built in the moment. These small pieces of a conversation take a minute, sometimes two minutes. As a result, the lawyer-client relationship is strengthened, and both parties benefit from it for the duration of the representation. A human connection is made. That connection inspires you to understand the client’s full range of needs, and inspires the client to do whatever it takes to assist you in getting the job done. It also happens to be an enjoyable way to practice law.
What Property Can I keep In A Bankruptcy?
People considering bankruptcy often have the misperception that they will lose all of their property if they decide to file. Fact is, only non-exempt property will be eligible for sale in a chapter 7 bankruptcy.
Filing bankruptcy doesn’t have to mean losing all of your property
As a matter of public policy legislatures at both the state and federal levels have enacted exemption laws to ensure that those who seek bankruptcy protection are able to retain property through the process. Exemption laws vary by state and designate certain property that is exempt or protected from creditors.
An example using real estate
For example, let’s say a state’s homestead exemption allows a married couple filing a joint bankruptcy case to protect $37,500 of equity in their home. Therefore, assuming they could afford the mortgage payments after bankruptcy, this theoretical couple could keep a $500,000 home through the bankruptcy process as long as home equity does not exceed $37,500 (as long as the mortgages encumbering the home added up to about $460,000). Equity is calculated by subtracting debt on the property from its value. The entire value of property is not the determining factor for exemption purposes.
The same principle applies for cars
The same principle applies for cars. If you currently owe $10,000 on a car that is worth $12,000, most exemption statutes will allow the $2,000 of equity in the car to be protected from your creditors. You will be able to file bankruptcy to shed burdensome debt while retaining your car.
When you think about it, the application of the laws make sense. We no longer have debtor’s prisons. People in financial peril need relief, and often the Bankruptcy Code is the means to receiving this relief. Could a consumer truly obtain a fresh start financially if they were left with no home and car? Of course not. Therein lies the policy justification for exemption laws. Consumers who find themselves in financial trouble must be left with some property so they can get back on their feet.
Even is stuff is sold, you’ll receive a check for the amount of the exemption
It should be noted that even if you have non-exempt equity in property, you may have the option of paying the value of the non-exempt portion of the property to the bankruptcy trustee in order to keep it. If the property is sold by the trustee, you will still be entitled to a check for the value of the exemption. To harken back to our homestead example, if you had $60,000 of equity and the trustee sold your real estate, you’d get a check for $37,500 after the sale. A sale does not defeat the exemption.
Then there’s always chapter 13 bankruptcy
Alternatively, chapter 13 bankruptcy can provide a nice solution for consumers who want to get their debt under control but have significant non-exempt assets. Chapter 13 bankruptcy allows debtors the option of paying out the value of non-exempt property to their creditors over time while slashing credit card debt and other unsecured debt. It is important to consult with a knowledgeable bankruptcy attorney in order to determine the effect that your state’s exemption laws will have on you and your property.
Free Initial Consultation with a Utah Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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