Bankruptcy Attorney Career Profile

Bankruptcy attorneys are specialist lawyers in the field of insolvency. They act as both legal representatives and legal advisers to individuals, partnerships and corporations. A person who is unable to meet financial obligations with their available resources is technically bankrupt. Unless the person can reschedule debt and discharge their obligations with the formal agreement of creditors, the person will have to file for bankruptcy. Bankruptcy must be legally declared by a court. Conditions relating to the bankruptcy are then imposed by the court depending on statutory law and the circumstances of individual cases.

Types of Bankruptcy

In the US, there are three forms of bankruptcy, all subject to Federal law:

  • Chapter 7: Liquidation, a special managed form of disposal of assets conducted by a liquidator appointed by the court.
  • Chapter 11: Relates to bankruptcy of a partnership or corporation.
  • Chapter 13: Form of bankruptcy relating to a sole proprietorship with unsecured (no formal agreement between) debts under $250,000 and secured debts under $750,000.

The work environment

 The role of the bankruptcy attorney is to assist clients in dealing with the many different legal issues raised by bankruptcy. The bankruptcy attorney deals with two fundamental forms of bankruptcy issues, pre-bankruptcy consultations and actual filing for bankruptcy:

  • Pre-bankruptcy advisory role: This is the role which bankruptcy attorneys consider the most productive. They are often able to provide solutions for their clients which provide positive outcomes, sometimes including avoiding bankruptcy entirely. This consultation process is extremely important, because the bankruptcy attorney can explain the situation to their clients and clarify available options. One of the most common factors in personal and business bankruptcy is lack of professional advice. 
  • The bankruptcy attorney can also operate as an adviser explaining methods of dealing with debt. They can explain debt control methods like loans brokerage, debt consolidation, and other forms of debt management, and how to approach these issues.
  • Filing for bankruptcy advisory role: The attorney supports and advises the client, giving guidance regarding the legal options related to bankruptcy. For example, a business which is insolvent may file for Chapter 11 bankruptcy, which allows for out of court restructuring of debt with the agreement of creditors.
  • Bankruptcy court hearings: These are a different form of hearing to normal adversarial court hearings. The bankruptcy attorney acts on behalf of the client to ensure the client's rights are properly represented, dealing with the technical aspects of court procedures and findings. This may involve explaining the legal aspects of the client's situation to the court, and clarifying issues like reasons for insolvency in legal terms.

Wages: Some bankruptcy attorneys may be on fixed salaries depending on the type of legal practice. Court appointed representatives work on this basis. Fees apply for services unless otherwise specified by the court in a ruling.

Hours: Standard hours, although conditional on client needs in some cases.

The career environment

In career terms, the bankruptcy attorney, as a specialist, is confined to this area of law. Career progression is based on the nature of the work and the value of the cases. The top end of the profession is engaged in corporate law, in advisory and formal representation roles.