Bankruptcy laws focus on helping individuals solve and repay their debts after they have suffered heavy losses.
In the United States, there were bankruptcy laws as early as 1800.
However, the first voluntary bankruptcy laws were allowed through the Acts of 1841 and 1867.
These laws along with the Bankruptcy Act in 1898 also called the Nelson Act are what our modern debtor/creditor relation system is based on.
It is common to hear that a person in a bad financial situation may “declare bankruptcy.”
But what exactly does this mean?
Which laws govern bankruptcy proceedings in the United States – and how are lawyers a part of the process?
Bankruptcy law is not always the first career path that law students think of, but it can be quite exciting and fulfilling.
This article will explore the role of bankruptcy law and bankruptcy attorneys.
Where Do Bankruptcy Laws Come From?
Federal bankruptcy laws, which govern nearly all bankruptcy proceedings, are statutory laws outlined in Title 11 of the United States Code.
Because one code governs all bankruptcy proceedings in the country, this area of law tends to be very uniform and precise.
In fact, many bankruptcy attorneys find this area of practice enjoyable for that very reason – often the answer they are searching for is outlined directly in the code itself.
In particular, there are three common types of bankruptcy proceedings.
Chapter 7 of the Code applies to individual petitions, while Chapter 11 proceedings are filed by businesses.
Finally, Chapter 13 proceedings govern wage earners; petitions under this chapter ask the court for more time to allow a debtor to pay off his or her debts while earning a steady income.
What Do Bankruptcy Lawyers Do?
Bankruptcy lawyers may work on behalf of debtors (the individuals or businesses who owe the debt) or creditors (the individuals or entities to whom a debt is owed).
In a bankruptcy proceeding, the ultimate goal is to benefit both the debtor and the creditors, by allowing creditors to become satisfied while still allowing debtors a fresh start financially.
Bankruptcy lawyers on both sides of the equation work to facilitate this goal.
On a typical day, a lawyer working on a bankruptcy case may draft motions and proceedings to be filed in court, as well as draft responses to motions and other filings.
Bankruptcy lawyers engage in and review discovery documents, and hold meetings with clients and adversaries to discuss how best to move forward.
Motions filed in bankruptcy cases will be set to be heard by the court, and lawyers will have to be prepared to argue them.
However, junior attorneys in bankruptcy firms may not always get to court to argue these motions – that practice is often left up to the more experienced attorneys.
Because of the variety of tasks performed by a bankruptcy lawyer, a variety of skills are needed as well.
Bankruptcy lawyers must have a strong understanding of the Bankruptcy Code, as well as excellent legal research and writing skills.
Lawyers in this field must be prepared to communicate with clients, as well as negotiate with adversaries in pending proceedings, so strong “people skills” are a must.
Finally, litigation skills are a necessity, even though newer attorneys may not argue in court right off the bat.
Bankruptcy lawyers should be ready to argue motions filed in court at any time; a full understanding of the filings involved, as well as well-practiced speaking skills, are a must in this field.
How Can Law Students Prepare for a Career in Bankruptcy Law?
Bankruptcy law is a growing field right now, so this is a good time for law students to look for careers in this area of law.
Many firms offer a bankruptcy practice, which typically involves a heavy workload.
Students interested in working in this field should look to apply to both small and large firms with an active bankruptcy practice.
While in law school, most students will have the opportunity to take a course in bankruptcy law.
This is, of course, the best way to learn more about the field and the laws involved in bankruptcy proceedings.
Students interested in this area of practice should look out for a bankruptcy or similar course being offered by their school.
However, bankruptcy itself is not the only useful class for future bankruptcy lawyers.
The following classes will all help to hone the skills and knowledge necessary for those who wish to work in the bankruptcy field:
• Bankruptcy Law
• Consumer Finance
• Tax Law
Bankruptcy is a growing area of the law offering more and more career opportunities for new lawyers.
While attorneys in this field must utilize a variety of different skills each day, law students can start preparing early for a career in this fast-paced environment.
Attorneys in bankruptcy enjoy the field because the laws are straightforward and the objective is to satisfy everyone involved in the proceedings.