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Pro Bono
New York City Pro Bono Training Calendar
New York Lawyer
By Thomas Adcock
With ten days remaining before the new, more restrictive bankruptcy code becomes effective, John McManus has never been busier in his 35 years of representing low-income clients in emotional and financial distress.
Unlike the commencement of litigation . . . the commencement of a typical Chapter 7 case is an in rem proceeding that triggers the automatic operation of a statutory framework for marshaling and distributing assets and discharging debt. . . . [T]o the extent adversary proceedings are brought by the Chapter 7 estate, the decision to do so is made by the court-appointed Chapter 7 trustee, not by the Chapter 7 debtor or his counsel. Measured against these standards, the pro bono program which proposes to provide representation only through the commencement of a Chapter 7 case is ethically permissible . . . [T]he volunteer lawyer should independently evaluate whether the complexities of the case or the limitations of the client make it unlikely that the client could effectively proceed pro se. The city bar has written to banks and other financial institutions in New York, asking them to release attorneys who work at the law firms representing them for pro bono counsel to low-income bankruptcy filers. The letter is modeled after a successful effort by the Boston Bar Association, by which bank clients there grant waivers under two conditions: Bank debt is $25,000 or less, secured or unsecured; and the volunteer attorney has not and will not represent the bank with respect to the bankruptcy client. In addition, said Mr. McManus, lawyers interested in volunteering through the city bar to help pro se filers have little to worry about with respect to a provision in the new code holding attorneys responsible for the efficacy of client financial statements. "That part of the new law exempts 501(c)3 corporations, of which the justice center is one," said Mr. McManus. "So our volunteers would be under our umbrella." Maria L. Imperial, executive director of the City Bar Justice Center, is hopeful these measures will eventually increase the pool of volunteers for Mr. McManus' project, which had been operating at Legal Aid until financial difficulties forced the program to be cut. "There is such great need for this," she said. William Kahn, the retired head of Whitman & Ransom's bankruptcy practice who mostly represented corporate creditors, has been one of Mr. McManus' most stalwart volunteers since the city bar project got under way a year ago. Mr. Kahn described his clientele as primarily "hurt and lonely" women. "When the women come to see me . . . I say to them, 'Tell me about your situation,'" he said. "So many of them begin with the same sentence, 'I loaned my credit card to my ex.' "So the husband or the boyfriend runs off, and most of the charges are clothing for other women," he added. "These women, my clients — you can imagine how hurt and lonely they are. These are working people." Under the current provisions of Chapter 7, Mr. Kahn said his clients stand a fair chance of discharging credit card debt. But under the new code, they would have to submit to a means test in Bankruptcy Court. "So now this poor woman who's been robbed by her ex-boyfriend or husband has to pay up for five years, based on what's left over after a judge decides how much she needs to live — a few cents for transportation, a few cents for food and so forth," said Mr. Kahn. "And once the judge puts them on a five-year plan, if they miss one payment because they're sick or out of work or whatever, they're declared in default and they don't get a discharge and the debt is payable all at once and they can't file another bankruptcy petition for eight years." In news accounts up to and following passage of the new bankruptcy code, congressional Democrats have excoriated the Bankruptcy Abuse Prevention and Consumer Protection Act, and some Republicans have been likewise critical. Mr. Kahn, a Republican, called the new law "the most vile piece of legislation I have ever seen." And though he does not describe himself as a religious man, Mr. Kahn allowed that perhaps his volunteer effort constitutes heavenly labor. To which Mr. McManus said, "The Lord's work? I wish He'd send me a few more angels. We could use the help."
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