As the U.S. economy sours, a growing number of people are being forced into bankruptcy. More than 1 million people filed for bankruptcy last year. This trend is also creating a work boom in part of the legal profession — consumer bankruptcy law.
Christine Beckler, a case manager for a bankruptcy law firm in San Jose, Calif., sees the growing demand every day.
"When I'm coming in, I find I have 18 to 20 phone messages that were left from the evening," she says. "I'm receiving 20 to 25 e-mails daily on our Web site. And as you see here in my hand, I have 30 calls I have to get back to just from today."
More than 95,000 people filed for bankruptcy in California last year. That's more than double the number from 2007. Attorney Ike Shulman, Beckler's boss, says a typical client arrives reluctantly, carrying a heavy burden.
"I can tell you that everyone that I meet with feels bad coming into the office, and it's not because of me. It's because they don't want to be there," he says.
Shulman is the co-founder of the National Association of Consumer Bankruptcy Attorneys. He sees everyone from bankers to teachers who have burned through their 401(k) plans, their savings, and help from family and friends.
"But ultimately, they come to the realization that there is no other avenue, and their health is starting to suffer because they wake up every day with a mountain of debt in front of them," he says. "And it can be a very debilitating thing. So for almost everybody I see, bankruptcy is the only financial alternative left to them."
This flood of new clients is attracting new attorneys. The number of bankruptcy lawyers jumped about 30 percent last year.
One is Tilden Moschetti in San Francisco. He's a former family law specialist who says guiding clients through bankruptcy beats handling divorces.
"It was really a chance for me to do what I really like to do — interact a lot with clients. Gives me a chance to really help clients, because you know at the end of the day, they can wind up better in bankruptcy than in divorce, where everybody loses," says Moschetti.
Making A Comeback
This demand for bankruptcy lawyers comes after they were nearly put out of business four years ago. That's when Congress, at the urging of the credit card industry, changed the law to make it harder for consumers to file for bankruptcy. Bankruptcy filings dropped off dramatically and dried up the field for lawyers, says Shulman.
"I think the credit card companies thought that shutting down bankruptcy by changing the law and making the process almost unmanageable was a key element of what they were trying to do, and it was aimed at making the lawyer's life miserable," he says.
Now, the nation's economic misery is money in their pocket. But Shulman cautions any attorney looking to get rich.
"People attracted to doing consumer bankruptcy work by and large have to have some sympathy for the underdog — not going into law because you think you're going to hit the financial lottery," he says. "It's not the type of practice I think that people will go into thinking, 'This is where I'm going to make my millions.' "
But they can be sure there won't be a shortage of clients.