We recently interviewed Christopher Holmes and Jess M. Smith, III, the senior partners at Tom Scott & Associates, P.C. Below is Part 2 of that interview, which focuses on keeping your property when you file for bankruptcy, as well as the benefits of a bankruptcy attorney who has other types of legal experience.
Q: What is the difference between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy in regards to keeping your property and assets?
CH: Chapter 13 of the bankruptcy code gives us the clout to do things that you can’t do in a Chapter 7. For example, in a Chapter 7 bankruptcy a debtor can only protect a certain amount of assets from his or her creditors and a trustee has the power to “take” certain property, liquidate it, and use those net proceeds from the sale of those assets to pay back a certain amount of debt.
I have a case right now in which a man has too much equity in his home, so in a Chapter 7 a trustee could conceivable take the house, liquidate the house, pay off the mortgage, and with the money that’s left over pay a certain percentage of all of the different debts. So what we are going to do is put him into a Chapter 13 bankruptcy, so as long as he pays back to his creditors, through this three- to five-year plan, as much money as those creditors would have received in the Chapter 7 had his house been taken and sold, he then gets to protect and keep his house. That requires him to be in that plan for three to five years and to pay a certain amount each and every month, to make sure those creditors once again receive as much money as they might have received had his assets been liquidated.
JS: Keep in mind that this case is very fact-sensitive, There is no one-size-fits-all plan. That’s why you need to have an experienced attorney on your side.
CH: Some lawyers don’t even meet with the clients to have a consultation. They have a paralegal or some other non-lawyer handle the situation. We think that we provide a better service to the clients, because it’s a real live lawyer who does the initial consultation. We get certain facts and certain circumstances from them, and then we diagnose the problem and then we can better prescribe the remedy for them, because we get more information from them. Then, we can filter the information that through the lens of our expertise to figure out whether a Chapter 7 or a Chapter 13 is the more-appropriate remedy for that particular person. Given the number of years we’ve been practicing bankruptcy law, we’ve experienced so many different circumstance that we can reflect back on to say, “This case is like that previous case and the circumstances from that case apply here.”
JS: Also worth mentioning is that while our practice is now largely devoted to bankruptcy, it hasn’t always been exclusively devoted to bankruptcy. You find a lot of these bankruptcy firms have attorneys that don’t know anything other than bankruptcy. They don’t have that broad base of experience that Chris and I have in areas family law, personal injuries, estates, probate, where those area all impact how bankruptcy cases are decided.
CH: Back in the day we were general practitioners and handled just about any type of legal issue that came through the door.
JS: Chris has over 30 years of experience and I have 22 years of experience. Chris had done bankruptcy for about 17 years exclusively and I’ve done it for about 12, so I had about a decade of handling other type of legal work. I think we can offer the benefits of those other experiences, whereas some of the other bankruptcy offices in Indianapolis can’t offer that broad base of experience.
CH: Every once in a while something comes up and I harken back to those days when I did divorce law or criminal law or probate, and something comes up where a previous experience helps me devise a remedy in bankruptcy court that fits the situation. Some of these young whippersnappers out of law school who have done nothing but a little bit of bankruptcy, there’s no way they can handle a case like we can handle it having done thousands and thousands of bankruptcies on top of all of our other legal casework. It easy to think we’ve seen it all in the world of bankruptcy, but every one in a while something comes up where we tap into those previous experiences to device a remedy for that new wrinkle.
Q: Hearing you say that, reminds me that you do other things for your clients beside just handling bankruptcy issues.
JS: Correct. We do some wills, some life planning documents, power of attorney, along with divorces and non-contested child custody cases.
CH: Yes, everybody needs a Last Will and Testament, so do offer that service for a reasonable fee, so if someone is interested should contact us. We also do living wills and durable powers of attorney, documentation of healthcare representatives.
JS: We also co-counsel. We’ve recently had a few cases where people come to us with a personal injury claim where we co-counsel with other firms to obtain settlement for our clients. I’m not an expert in medical malpractice, but I know someone who is, so I can help you find the right attorney for you particular circumstances.
Parts 1 and 3 of This Interview
Part 1: Divorce and Bankruptcy