By Tom Gantert
Now that the holidays are over and tax returns are on the way, business is picking up for some Michigan attorneys.
“Right about now is bankruptcy season,” said Thomas Paluchniak, a Jackson bankruptcy attorney who works for the William C. Babut law firm. “A lot of people file right after the holidays. A lot of people rely on tax refunds to finance that.”
Bankruptcy cases (Chapters 7, 11, 12, 13) have been an increasing stream of business for lawyers in Michigan from 2009 and 2010, the most recent year complete statistics are available.
There were 67,824 cases filed in 2009 and 66,748 in 2010.
Michigan had 89,276 bankruptcy cases in 2005 when residents were worried a new federal law would make it harder to file for bankruptcy.
That law required credit counseling and a preliminary test against median income in the jurisdiction in which people who filed lived, according to the William C. Babut law office.
“In 2005, a whole bunch of people stormed the gate,” Paluchniak said. “As times became increasingly worse, people began investigating it again.”
As would be expected, bankruptcy cases fell off to 32,328 in 2006 and increased to 44,976 in 2007.
When the recession hit, the cases were back in the 50,000 to 66,000 range.
Bankruptcy cases can be a lucrative field for some attorneys.
According to the State Bar of Michigan’s 2010 survey, the attorneys who represented the creditor in bankruptcy made $222,361 a year on average — the second highest field in private practice.
Probate, trust litigation was the highest earning field with an average salary of $259,000.
Attorneys who represented debtors in the bankruptcy made considerably less, earning $92,628 a year on average.
Mark Hashley, a Jackson attorney who does bankruptcy work, said the amount of cases he has seen has remained steady.
Hashley said he had 106 cases in 2010 and 82 in 2011. Through the first month of 2012, he’s had 11 cases.
“Once January and February hits, they pick up tax refunds,” Hashley said. “I’ve been pretty busy over the past month.”
But Tricia Terry of the Ann Arbor law firm Marrs & Terry, said she seen a drop in bankruptcy cases at her firm.
Terry said they had between 40 to 70 cases a month in a typical year.
“The last three or four months, we’ve been down to 20 to 30 a month,” Terry said.
Terry said many people don’t have the money to file.
“There are so many people that don’t have anything to lose, so they aren’t doing anything,” Terry said. “They don’t even have any money to file for a bankruptcy.”
Unemployed people don’t have a paycheck that can be garnished and won’t file until they get a job.
“Right now, it is about eating,” Terry said. “It’s not about dealing with creditors. Everyone is in hunkered-down mode.”
Bankruptcy season begins: Some question whether upward trend will continue
By Tom Gantert
CommentsSign in to post a comment »
- Early announcement of big year-end bonuses stuns Simpson Thacher associates
- House finally sues over implementation of health-care law; what actions are challenged?
- GM Ignition Defect Fund Seeing Few Eligible Claims
- Simpson Thacher Sets High Bar With Associate Bonuses
- This week at the Court
- January arguments, day by day