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My 100% Arizona Bankruptcy Discharge Guarantee!

By Joseph McDaniel, Esq.

Every now and then I'll see some bankruptcy lawyer in Cleveland or Denver offering a money-back guarantee about something that is pretty straightforward; for instance, you'll see a guarantee that if the case is dismissed for failure to pass the means test after the debtor has provided accurate information to the bankruptcy lawyer, there will be a refund of the fee.

Now, that's a pretty safe bet, because if a debtor tells me the numbers, and they go through the sophisticated software in my office, there's a pretty darn good chance that the Chapter 7 cases I file will pass the means test.

Because to a large extent, that's a matter of number crunching, although there is more to it than just that. And I ain't gonna file a case if it won't pass the means test. Just won't. I know what comes next.

Or a lawyer might guarantee that somebody will show up to represent you at your first meeting of creditors.

Well, duhhhhh.

Or a lawyer will guarantee that if you have been straight with him in filling out forms, and you don't get a discharge, you'll get your money back.

See, I have my own guarantee, and I make it boldly, and without fear, for anybody to hear!

I guarantee that I will file your case on a day ending in "Y".

There, I said it! And I'm not afraid to say it!

I'll also guarantee, if pressed, that the sky is blue and the grass is green, but only under duress.

Because if a lawyer offers a guarantee, there are only two possible reasons that he's doing it: one is that he wants more business, and he wants to make the process seem less risky (hey, would I guarantee a result if I were worried about the outcome?), OR the lawyer is simply limiting the scope of the guarantee to items so unlikely to occur that it's a sucker bet to bet against him.

I, personally, just don't like guarantees. I think they set up an adverse relationship between the lawyer and the client. And frankly, a money back guarantee doesn't begin to cover the issues if something goes seriously wrong in a bankruptcy case in Arizona.

What could go wrong?

Well, the debtor could fail, by "mistake", or by way of "forgetfulness", that he owns property in Mexico. Now, could that happen?

Yeah. Like on Wednesday, you know?

So what to do to minimize the issue? Well, the bankruptcy lawyer amends quick like a bunny, and holds his breath until he turns blue, hoping that the silly debtor doesn't get himself squashed like a bug.

Or a debtor decides not to list a creditor.

Or an attorney for a trustee objects to an exemption that is clearly legit, but the client can't handle any risk whatsoever that the trustee could prevail (note: it's better to be lucky than smart). 

Or a debtor decides not to schedule that he sold his Corvette to his sister for a dollar the day prior to the bankruptcy filing.

Or a debtor has previously lied like doggie to get a line of credit and he gets caught by the bank prior to the entry of the discharge.

Or the debtor, against written instructions from counsel, racks up massive credit card debt, inside the 90 day period, or on the 91st day (that looks real good, right?).

The list goes on and on.

For about thirty years, so far, in my experience.

So what do you do, as a lawyer, with guarantees?

Well, I just won't make 'em. I've seen too much, and there are too many ways for something to go sideways in Bankruptcy Court after the 2005 Amendments.

And if something goes sideways, what does a good Arizona bankruptcy attorney do?

Well, he does whatever he can to minimize the bleeding.

You know?

p.s. one thing that can go sideways in a Chapter 7 case, for instance, is that a creditor can file a Complaint to Determine Dischargeability of Debt. That requires additional work, and it's litigation.

Or, as I cheerfully tell my clients, if I gotta jump in front of a bus for you, that'll cost extra.

p.p.s. When I wanted to get my eyes sliced and diced with a laser to correct my nearsightedness, I knew darn well I wasn't going to get a guarantee out of a board-certified eye surgeon. So I did research into credentials and experience and training and testimonials like a crazed weasel.

When you decide that you're going to file a bankruptcy, you might want to research credentials and experience and training and testimonials in the same way.

But only if your discharge is important to you.

You know?

Or you can get a guarantee. Your choice.


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Full post as published by Arizona Bankruptcy Attorney Blog on September 19, 2010 (boomark / email).