United States Supreme Court Rule Changes

On February 16, 2010, a revised version of the Rules of the United States Supreme Court will go into effect, according to a press release issued by the high court on January 12, 2010.

Among other changes, one that will hit wordy attorneys where it hurts is a reduction of the word limit applicable to Reply Briefs filed with the Court.  Previously, the limit was 7,500 words.  As of February 16, the limit will be 6,000.  This essentially restores the limit that was in effect prior to the 2007 revisions.  The Clerk of the Court explained the revision to the previous limit, stating:  “Experience has shown that the increased volume limit has allowed for the filing of some briefs that repeat previous arguments rather than address only new material presented in intervening briefs.”

Other changes were also made, as explained in the press release:

Changes to Rules 26 and 34.1 clarify what is to be included on the cover of the Joint Appendix and require that counsel of record include an e-mail address on the cover of every document filed.  Additions to Rule 34 require a descriptive index of the appendices and citations to the United States Code whenever available. Rule 37 revisions clarify that only an attorney admitted to practice before this Court is permitted to file an amicus curiae brief and that extensions of time for amicus curiae briefs at the merits stage will not be entertained.

The number of cases that ever make it to the point where questions or issues are sought to presented to the Supreme Court represent a mere fraction of the total number of cases that are filed each year with the United States Supreme Court.  Many attorneys may practice for decades without ever having to even seek admission to the bar of the United States Supreme Court.  Still others, due to the nature of their practice, have several opportunities to file their petitions before the Supreme Court.  For those who have such an opportunity, knowing the rules of the Court is absolutely imperative and should be duly noted, particularly if one is planning to file anything after February 16, 2010, when the revisions go into effect. 

Questions or requests for additional information may be directed to Kathy Arberg at (202) 479-3211

Greater Access to Medical Malpractice Information: Perhaps Arkansas Will Follow the Leaders

What would you do if you could look up your medical provider to determine whether he or she had ever committed medical malpractice?  Would you utilize the service?  If the information were readily available, many people would.  Unfortunately, in Arkansas, such information is not readily available to the public.

Other states have much more transparency when it comes to the medical providers licensed to perform services in those states.  For example, in North Carolina, the public now has access to information related to “malpractice settlements or judgments and criminal records for its 35,000 licensed physicians and physician assistants,” according to the Raleigh News & Observer.

The information available includes “malpractice payments, misdemeanor and felony convictions, hospital suspensions and discipline by medical boards in other states.”  Obviously, this transparency is opposed by doctors, hospitals, and insurance companies, as well as by the defense bar.

The new addition to the Board’s website is in response to a new law enacted by the North Carolina legislature, which provides for the specific publication of settlements made after May 1, 2008, that exceed $75,000 and malpractice judgments entered on or after December 1, 2002.

Perhaps Arkansas will eventually follow suit in order to protect its citizens from the negligence of medical providers who have faced previous allegations of malpractice.  Certainly, allegations of malpractice and the subsequent settlement that a provider might enter into are not the same as a finding of fault, but at the very least, it would give the consumer the discretion to choose for himself whether to entrust his health to a provider who has been questioned by others in the past.

State Law Summaries:  Medical Malpractice and Reform

How Yaz, Yasmin, and Ocella Cause Heart Attacks

In a previous post, we at the Brad Hendricks Law Firm expressed a desire to help those who might have been harmed by the birth control drug known as Yaz or Yasmin, or by its generic counterpart, Ocella.

One harmful side effect of the drug referred to in that previous post was the serious risk of heart attack.  You might be wondering how the drug might cause a heart attack?  For more information, we recommend an article posted online that answers the question:  Why does Yaz cause heart attacks?

The article explains:

The combination of chemicals in Yaz has been reported to increase the risk of blood clots by more than 600%.

Blood clotting is a normal bodily function . . . . However, the chemical combinations in Yaz, Yasmin and Ocella can cause abnormal blood clotting . . . . These abnormal blood clots can break away from the blood vessel on which they formed . . . travel through the blood stream and can form a blockage or become lodged inside the heart itself. This blockage can starve the flow of blood and cause a heart attack.

Since 2004, there have been more than 50 reports of deaths filed with the FDA.  For the families of those fatalities, and for others who might be harmed by Yaz, Yasmin, or Ocella, the consequences of these drugs are simply unacceptable, and the Brad Hendricks Law Firm agrees.   If you or someone you love have experienced any negative side effects after taking Yaz, Yasmin, or Ocella, you may be entitled to compensation. 

For a free consultation with an experienced attorney about your claim, please contact us today at (501) 221-0444 or (800) 661-0196 today!

Bankruptcy Filings Led by Middle Class Homeowners

According to a recent USA Today article, a new study, “The Vulnerable Middle Class:  Bankruptcy and Class Status,” reveals that bankruptcy filings have “become a largely middle-class phenomenon led by filers who are college-educated and owners of homes.”

Approximately 1.1 million consumers filed Chapter 7 bankruptcy in 2007.  In all, approximately 100,000 middle-class families filed for personal bankruptcy each month in 2007.  The article points out that, in today’s economy, consumers can not rely on a “college education, a good job and home ownership to protect them from financial collapse.”  Bankruptcy is not reserved for the financially irresponsible, those with poor savings habits, or people with health problems.  Even home ownership is not the lifesaver it once might have been, as falling home values cause, rather than solve, financial problems for some families.

Even more daunting, the article notes, is the fact that the data presented in the study was collected during more secure financial times.  Conditions has probably worsened.

When it comes to bankruptcy, fear of the unknown plagues many—fear of losing one’s home, fear of being left penniless, fear of the stigma that many commonly associated with bankruptcy.  Under the right circumstances, however, it can provide much-needed relief.

The Brad Hendricks Law Firm has counsel available help to consumers who might be considering bankruptcy.  We work with our clients to ensure that relevant debt is disclosed, to provide salient advice regarding those creditors that should be paid, and those that should not while in bankruptcy, as well as alternatives that might be available to the consumer.  Depending on your circumstances, our highly qualified staff may recommend Chapter 13 bankruptcy, in which the consume sets up a payment plan that will permit them to keep their property, or Chapter 7 bankruptcy, which involves the liquidation of assets and the quicker discharge of debts.  Bankruptcy, which now affects even those previously believed to be immune, doesn’t have to be stigmatized.  Often, it is, in fact, the responsible choice to make. 

If you are tired of struggling, financially, and weary from dealing with creditors who hound you aggressively, you can count on us to help.  To set up a free, confidential evaluation of your case, please call us toll-free at 1-866-676-5096 or contact us through our Web site.

If you or a loved one has been harmed by Yaz, Yasmin or Ocella

Image by KelliAmanda via Flickr

The Brad Hendricks Law Firm wants to help if you or a loved one has been harmed by Yaz (also known as Yasmin and by its generic name “Ocella”).

Originally developed and manufactured by Berlex Laboratories, these medications are referred to as “combination birth control,” which contain the hormones estrogen (ethinyl estradiol) and progestin (drospirenone or “drsp”).  Yasmin was approved by the Food and Drug Administration on May 11, 2001.

Bayer AG acquired Berlex Laboratories in 2006 and began marketing this product as “a “different type of birth control pill.”  At one point, Yaz was marketed as an effective treatment of premenstrual syndrome (PMS), but in October 2008, the FDA issued a warning letter for this deceptive claim and clarifying that the medication was only meant to help treat Premenstrual Dysphoric Disorder (PMDD) while simultaneously reducing the effects of acne.  This marketing campaign was highly effective and today it is the number one birth control pill in the United States, with more than $600 million sales in 2008.

Unfortunately, this “different type of birth control pill” that was marketed as offering such additional perks, in addition to preventing pregnancy, is not without its risks.  Some women might simply experience symptoms such as:

• Severe Headaches
• Severe allergic reactions including rash, hives, itching, difficulty breathing.
• Tightness in the chest swelling of the mouth, face, lips, or tongue.
• Fainting
• Irregular heartbeat
• Symptoms of liver problems
• Unusual or severe vaginal bleeding
• Unusual tiredness or weakness
• Vaginal irritation or discharge
• Vision changes (eg, sudden vision loss, double vision)

For others, however, the risks are much higher and include the following:

• Heart Attack
• Cardiac Arrhythmias
• Stroke
• Pulmonary embolism (an artery in the lung is blocked)
• Blood Clots (Non-Vaginal)
• Kidney Complications and Kidney Failure
• Seizures
• Deep Vein Thrombosis (DVT)
• Gallbladder Disease
• Hepaic Adenomas
• Pancreatitis
• Sudden Death

There have been more than 50 reports of deaths filed with the FDA since 2004.

The Brad Hendricks Law Firm believes that these risks are simply unacceptable.  If you or someone you love have experienced any of these symptoms after taking Yaz, Yasmin, or Ocella, you may be entitled to compensation.  For a free consultation with an experienced attorney about your claim, please contact us today at (501) 221-0444 or (800) 661-0196 today!

Related articles by Zemanta

• Yasmin And Yaz Birth Control Pills Are Under Scrutiny By Drug Regulators In Europe (drug-injury.com)
• Health Concerns Over Popular Contraceptives (nytimes.com)
• Birth Control Health Hazards: Popular Contraceptives Put Women At Higher Risk For Blood Clots, Strokes, Other Health Problems, Researches Say (huffingtonpost.com)
• A Theory Of How Yasmin Or YAZ Might Cause Pulmonary Embolism (PE) And Other Blood Clot Related Side Effects (drug-injury.com)

Book Review: Polarizing the Case

Polarizing the Case:  Exposing and Defeating the Malingering Myth by Rick Friedman (Trial Guides Publishing, 2007)

Book Review by Todd Jones, Esq., Brad Hendricks Law Firm

Polarizing the Case should be required reading for every plaintiff’s lawyer.  Not only does Rick Friedman do a masterful job of formulating and describing a cogent, well-rounded and effective strategy for aggressively defeating the malingering defense, he shows the reader how to go about doing it in the real world.  The reader understands immediately that the author has been in the trenches and is speaking from that experience rather than from an ivory tower. 

Of the many things I admire about this book, chief among them is how it completes the circle that so many books of its kind leave wide open.  Part I of the book is about identifying the problem, laying out the strategy and understanding the various psychological dimensions.  Part II, however, unlike other books, closes the loop by showing the reader, with an actual trial transcript (a trial which was conducted while the author was writing Part I of the book), how the strategy described can be implemented successfully at trial.  Part I is the instruction.  Part II is the demonstration.

Throughout the book, the author is self-deprecating and seems less concerned with impressing everyone with how smart he is than he is with teaching.  For instance, in Part II, the transcript portion of the book, the author intersperses commentary like this: “as you can see, there is fancy or remarkable going on here.  Nothing you couldn’t do.”  I found that kind of modesty refreshing in such an accomplished trial lawyer, a rare combination indeed.

The book not only describes and demonstrates how to carry off the Polarizing method, I also found it instructive and helpful more generally.  There is, for example, a real world example of an excellent closing argument, one which not only applies the principles espoused by the book, but which also, among other things, demonstrates a creative way to address the issue of money with the jury.

Fundamentally, however, this book is about how to expose and defeat the malingering defense.  It’s about taking the fight to the enemy.  It was written for every lawyer who has seen his or her good, honest client be made, directly or indirectly, to look like a liar, exaggerator or fake at trial.  When the defense has “thrown down the gauntlet . . . this book will teach you how to recognize it, pick it up, and then stuff it down there throats.”

We’ve all been there.  You know your client’s character is being attacked, sometimes directly, but usually by suggestion and innuendo, but you just aren’t sure what to do about it.  It can seem reasonable to ignore it or minimize it as best you can; to see it as transparent, self serving and devoid of substance.  We think (or hope) no one will buy it.  We don’t want to dignify it with a response or magnify the issue, right?  Wrong.

The sad fact is that it does work.  The author likens the situation to the one the Kerry campaign faced when its candidate, a war hero, was attacked on his record of military service.  It’s natural to be incredulous, to be in shock that they would dare go there.  Surely this will backfire.  How stupid can they be?  On the contrary.  Unfortunately, if uncontested, these scurrilous attacks work and work well (did you know Obama wants to pull the plug on Grandma?) which is why the author argues, in the trial context, how important it is to address it boldly and comprehensively when even the slightest hint of it’s rotten odor wafts into the courtroom. 

Here is the lesson: if you even suspect the defense may try to imply your client is faking or exaggerating, you must put on your armor, pick up your sword, and charge into battle on this issue.

To polarize effectively, not only do you not ignore the malingering defense, you make the issue of whether your client is a liar, a cheat and a fake THE issue in the case.  Of course, the author is careful to admonish the reader that case selection is key.  The strategy pre-supposes that the plaintiff actually fits the profile of someone who is honest and who has lay witnesses in her life that can counter-act the defense tactic of calling the plaintiff a liar and an exaggerator. 

The defense will resist bringing their strategy out of the shadows.  Your job is to bring it out into the light of day, force them take a position, then destroy that position.

For instance, when deposing and/or examining the defense doctor assigned with the duty of assassinating your client’s character, the author shows you how to push him to accept an extreme position.  The doctor will resist being direct and forthright about what he’s doing, choosing, rather, if you allow it, to assassinate through with the back-door weapons of insinuation and innuendo.  Usually, the author explains, they won’t want to be blunt about calling the plaintiff a liar or a fraud.  The defense will seek the cover of some more amorphous position, but one which sufficiently muddies the waters and confuses the issues to inflict the damage necessary to sink the plaintiff’s case.  By the time Mr. Friedman was done with the DME doctor in the trial transcript, exchanges like this were occurring frequently:

Q: All right.  So she’s intentionally exaggerating all of her symptoms, but she’s not lying?

A: Yes.

(Author’s note: This is the sort of position expert witnesses end up taking when they resist polarizing.)

The author does an excellent job, both by description, then by trial demonstration, of showing how the very process of pushing the defense doctor to one extreme or the other (polarizing) makes him look like a weasel, largely due to his reluctance to take a position.  I can’t do the technique justice in this review, but the book clearly demonstrates how, through this process, a beautiful, empowering clarity emerges for the jury.    

To return to the Kerry campaign analogy (I’m pursuing this analogy further than the author did), if Rick Friedman had been in charge of the Kerry campaign, instead of allowing the Swift Boaters to be the downfall of the campaign, their tactics would have been its saving grace.  The response from the Kerry campaign should have been to make the respective military records of the two candidates a major issue in the campaign.  Instead of shrinking from the issue, Kerry should have challenged Bush on the issue directly, openly, boldly and often.  The campaign should have run ads on the issue comparing Kerry’s war record to Bush’s war record and other ads that would directly confront and contradict the Swift Boaters.  The campaign wouldn’t shrink from the fight, but, rather, see it as an opportunity to play on a field where the campaign has an inherent advantage and where the other campaign can be exposed and defeated.

The author makes the point that jurors are usually in the position of making a judgment about the truth of the plaintiff’s case.  As we all know, defense lawyers are masters of chipping away at your case.  If, however, the author argues, the case is about the truth of two stories (she is either a liar, a cheat and a fake or NOT) the story that is most true should prevail.

. . . the defense is forced to sponsor a particular view of the facts.  The jury can then examine the defense story, and judge whether it is more or less credible than the plaintiff story.  In short, polarizing the case give the jury two competing versions of the facts to choose from.  The defense just can’t hide in the brush and take pot-shots at plaintiff’s case.  The defense has to come out in the open so that we can shoot at them too.

This strategy relies heavily on lay witnesses.  They are the tip of the spear and the primary means through which the big lie is exposed for what it is.  When confronted with an onslaught of credible lay testimony which directly contradicts the malingering defense (the more stark the contrast the better), the defense crumbles and, if you’re lucky and have done your job well, the jury has something to get angry about.  Thus, when you know that your client is an honest, upstanding person with the character, the life history and lay witnesses to prove it, you want the defense to call her a liar, a cheat and a fraud and you want them to do it unequivocally.

From an evidentiary standpoint, this approach, to some degree, relies on the judge accepting that the defense is attacking your client’s credibility and character, which, in turn, opens the door to the character evidence you will marshal through your lay witnesses.  The more effective the lawyer can be in pulling the defense out of the shadows and into the light of day, the more likely you will be to get the character evidence in.

Watch for opportunities to polarize the judge’s attitude towards the case.  If he sees the defense as accusing your client of being a fake and a liar, he will give you plenty of evidentiary room to fight back.

It does take some courage to go this route.  It’s unconventional. The strategy depends on the lawyer’s willingness to be bold.  If you have been successful in eliciting polarizing material in discovery, the author suggests you address the polarizing theme right off the bat in Voir Dire.  Otherwise, you do it in opening, as follows:

You will hear a lot of witnesses, and see a lot of evidence in this case.  But in the end, there is really only one major issue you need to decide: is Melinda Shepherd a liar, a cheat and a fraud?  That is the defense in this case.  And if she is a liar, a cheat and a fraud, you should send her out of this courtroom without a cent.  But if you decide she is telling the truth, that she is truly injured, and the defense is attacking her this way to avoid paying for the harm they have caused, then your verdict needs to ensure that they do not profit from this tactic.

The book includes solid, practical advise for how to set up this approach, then execute it at trial.  It includes good, practical advice on how to prepare your lay witnesses, how to set up and attack the DME doctor, how to conduct effective discovery and how the lawyer should conduct himself at trial.

Though the author is careful to point out that giving hard and fast rules where trial strategy is concerned is folly given the complicated nature of the beast, he does dispense practical advise, based on experience, such as allowing other witnesses, not the plaintiff, to carry the weight of describing the injury and effects thereof.  Plaintiff tends to come off as a whiner doing it him or herself, the author argues.  Less is more.  The author suggests that lay witnesses should  be matter of fact because jurors are suspicious of overly emotional testimony.  He believes in not overly rehearsing testimony and he believes the less time the plaintiff is on the stand, the better.  Admonish the witnesses that it isn’t their job to sell the case.  That’s the lawyer’s job.

I suppose one of the reasons this book resonated with me is the fact that the trial in Part II just happens to be strikingly similar to a case I handled three years ago.  Same issues (mild traumatic brain injury – great client and lay witnesses).  Same dynamics (hired gun neuropsychologist calling my client a malingerer).  I even managed to settle the case for almost exactly what the author was offered before he took it to trial (my client didn’t want to go to trial), but, after reading this book, it is obvious to me that I would have been much more prepared to take the case to the jury and get a great result had the comprehensive strategy outlined in this book been at my fingertips.  I employed some of these strategies, frankly, of my own accord, but I, without this book, wouldn’t have had the big picture concept, the comprehensive strategy, or the consequent conviction to follow it through every aspect of discovery and trial.  It isn’t until to you see how forcefully the author polarizes the issues, at every step of litigation, that the approach begins to make so much sense.  It requires boldness and aggression – malice aforethought, if you will.

If, through discovery and trial, the polarizing strategy has been fully utilized and implemented, the lawyer has set the stage for this sort of statement, which Mr. Friedman used in his closing:

I told you at the beginning of this case that the major issue you would have to decide is whether client is a liar, a cheat and a fraud.  Now you know why I said that.  If she is faking her injuries, you should send her out of here with nothing.  But if she is telling the truth, then they should be ashamed of themselves.

The jury returned a $700,000.00 verdict in the Part II case.  After reading the author’s instructions on polarizing the case, then the demonstration, it isn’t difficult to see why. 

*  Originally published in the ATLA Docket (Fall 2009).  Also available on the Brad Hendricks Law Firm website in the Articles Section.

Negotiating Health Care for the Uninsured

“Despite the talk in Washington about health care reform, which could potentially provide health insurance to millions of uninsured Americans, legislation to be enacted in the future does not help if you are uninsured now.  If you are not covered by any current health insurance carrier or are worried about losing employer-based or university-subsidized health insurance, there is something you should know.

You might be able to negotiate your way to basic health care.”

Read More on Findlaw

Health care is a concern of most Arkansas.  Costs continue to rise and for those without insurance, it may seem like there is no hope.  The article linked above provides some helpful tips for negotiating health care for you and your family.  However, there are other options available.

More information regarding statewide Charity and Income-Based Care is available for your convenience on the Brad Hendricks Law Firm’s website, whether you are in the Central Arkansas area, or elsewhere in the state.   If you have any questions regarding the services and providers we have provided for your convenience, our staff is available to answer questions, as possible.  Otherwise, please contact the providers directly at the numbers we have provided above.

When Should Your Client File Bankruptcy?

By: Lyndsey D. Dilks, Bankruptcy Attorney

The Brad Hendricks Law Firm, P.A.

*  Originally published in the ATLA Docket (Fall 2009).  Also available on the Brad Hendricks Law Firm website in the Articles Section.

We, as attorneys, are accustomed to getting a bad rap based on the sole fact that we are lawyers. Who among us hasn’t heard the joke: "What do you call 100 lawyers at the bottom of the sea?" I won’t insult you with the punch line. But, you get my point. We are out there busting our humps, helping our fellow humans, and, yet, we are subject to such ridicule.

In my experience, the thought of filing bankruptcy gets the same bad rap. It is an opportunity provided under the federal laws of our great nation to prevent an individual or business from drowning in bills that cannot possibly be repaid. It encourages entrepreneurship. The forgiveness of debts is even mentioned in the Bible.[i] However, the average human does not rise in the morning and run to the mirror and declare, "Hey, good looking, it’s a great day to file bankruptcy!" It just doesn’t happen. But, there are times when it should. And, you, as an advocate for your client, need to recognize those times. But, before you make a cursory decision about bankruptcy for your client, there are some things you need to know.

THE DIFFERENCE IN CHAPTER 7 AND CHAPTER 13 BANKRUPTCY CASES

There are generally two options available under the Bankruptcy Code for individuals: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is often the short-and-sweet version of bankruptcy. The first important thing to know about a Chapter 7 is the filer must pass the Means Test[ii] in order to qualify. If they pass the Means Test, they can receive a discharge of their unsecured debts. The most common unsecured debts discharged in bankruptcy include credit cards, medical bills, old utility bills, deficiency balances on repossessed vehicles, and judgments obtained for these debts. Any debts on secured items the client wishes to walk away from can be surrendered in a Chapter 7 and the creditor cannot later attempt to collect on the deficiency balance. This is a good option for someone significantly upside down in a vehicle. Although Chapter 7 bankruptcy is referred to as "liquidation," the process rarely occurs in an average Chapter 7 case. So long as the filer’s assets fall within the exemption limits, no liquidation will occur. Another thing to know about Chapter 7 is that the filer may retain and continue to pay for certain secured debt. The filer can discharge unsecured but continue to make regular mortgage payments and payments on a car note. Of course, there is more to know, but this is the simple explanation you can pass along to your client.

Chapter 13 bankruptcy is referred to as "reorganization." This chapter of bankruptcy is often used to help filers who have fallen behind on mortgage payments or car notes. While the Means Test does not determine whether a filer qualifies for Chapter 13, the test is used to determine if unsecured creditors will receive any payments on their claims. A Chapter 13 very different from a Chapter 7 in that the filer must make regular monthly payments to the Chapter 13 Trustee for a period of no less than 36 months and no more than 60 months. These monthly payment are payroll deducted. Every Chapter 13 filer must have a regular source of income to qualify for this chapter of bankruptcy. A Chapter 13 case is filed with a plan of repayment indicating the amount each creditor or group of creditors shall be paid during the course of the bankruptcy. The Trustee follows this plan to make the payments indicated. So long as each payment is made as proposed in the plan, the filer will receive a discharge of all unsecured debts and any arrearage amounts on secured claims will be brought current. Because life goes on, even in bankruptcy, a filer may be permitted to incur new debt for the purchase of a home or vehicle.

Before you send your client on his merry way to see a bankruptcy attorney, there are a few general tidbits of information you should pass along. Please, help us dispel the myths surrounding bankruptcy! First, filing bankruptcy does not mean someone is going to come and take away all of their possessions. In fact, 11 U.S.C. 522 provides a list of exemptions available under the bankruptcy laws. A brief list of the exempt assets includes: equity in a home and vehicles, household goods and furnishings, jewelry and wedding rings, retirement accounts and 401(k) plans, life insurance policies, tools used in the business, and many other assets the client already owns or has an interest in. For an individual with a potential personal injury settlement the bankruptcy laws provide an exemption up to $20,200.[iii] More details on that later. The point being, let the client know they do not "lose" anything just because they file bankruptcy. If they do have assets that exceed the exemption limits, their bankruptcy attorney will discuss the options with them.

Second, a client who is already dealing with the pain and emotional distress of an injury will be relieved to know that upon the filing of a bankruptcy case creditors can no longer have contact with the filer. Their mailbox will no longer be filled with threatening letters from debt collectors and they can answer the telephone without fear of being chastised for failure to make a payment on a bill. This perk to filing bankruptcy is very enticing to someone who has reached their emotional limit.

Third, if your client is having financial difficulties, you should encourage a consultation with a bankruptcy attorney so that the client can make an educated decision on how to deal with the financial problems. Face it, you practice personal injury work. You are a pro. You know the tricks-of-the-trade and the ins-and-outs. You don’t know bankruptcy. Don’t make the decision for your client. Most bankruptcy attorneys offer a free consultation. Send your client to meet with an attorney who can explain all the options.

WHEN SHOULD YOUR CLIENT FILE BANKRUPTCY

So, when does your client need to file bankruptcy? Here’s the short list:

1) When They Have Nothing to Lose

2) Before Divorce

3) Lots of Medical Bills

4) Credit Cards Out of Control

5) Mortgage Problems & Foreclosure

1) NOTHING TO LOSE

As personal injury attorneys, you likely represent several clients each year who have a modest settlement coming their way, but medical bills and liens will prevent them from seeing even a penny of the proceeds. In addition, the time they missed from work has caused them to fall behind on credit card repayments. Perhaps they even put some of their living expenses or medical bills on credit cards during their recovery period. While they may have managed to keep the mortgage and car note current, it is difficult to see the light at the end of the tunnel. This is when you need to send your client to a bankruptcy attorney.

A couple or individual with modest assets and income, but a significant amount of credit card debt or medical bills, will likely qualify for a Chapter 7 bankruptcy. The bankruptcy case can be filed and at least $20,200[iv] can flow into your client’s pocket. Any unused portion of the "Wildcard" exemption could increase this amount.[v] This is money that otherwise would have gone to medical providers. Not to worry, you, as the personal injury attorney will also be paid.

However, be warned, no clear law exists in Arkansas regarding the dischargeability of Medicare, Medicaid and subrogation liens in bankruptcy. If a lien holder or potential lien holder asserts such debt is nondischargeable in bankruptcy, the argument of the made-whole doctrine could be applied.[vi] As attorneys, we understand no 100% guarantees exist in any lawsuit. The important thing to remember is if your client stands to walk away from the settlement with empty pockets, there is nothing to lose by filing bankruptcy.

2) BEFORE DIVORCE

It’s a well known fact that financial problems often lead to marital problems and ultimately to divorce. In these instances, the couple will disagree as to whom should pay which debt. The couple may successfully obtain a divorce and enter into a property settlement agreement, but one party ultimately files bankruptcy. This creates a hornet’s nest for the non-filing spouse. The bankruptcy spouse has discharged his debt obligations through the bankruptcy court, but a property settlement agreement may indicate he is responsible for those debts. The filing of one ex-spouse will often push the other into also filing bankruptcy. Make the right suggestion before these problems arise.

If you have a divorce client suffering from financial problems with the estranged spouse, send both of them to a bankruptcy attorney prior to obtaining the divorce. One reason for doing this is to save money. A couple can file bankruptcy for the same cost as an individual. If the parties can remain amicable for the short period of time, usually 6 months, it takes to get through a Chapter 7 bankruptcy, they can discharge their debts and obtain their divorce without the overhanging debt problems. Your life will be made easier because you do not have to deal with the debts in the property settlement agreement.

3) MEDICAL BILLS

An individual who does not have medical insurance will quickly find themselves in a significant amount of debt after treatment for an injury. Unpaid medical providers will obtain judgments against the individual and collect on the judgments through garnishments of wages and bank accounts. A Chapter 13 or Chapter 7 bankruptcy filing will immediately stop a garnishment. Successfully completing either chapter will discharge all of the medical bills. Although you may decline to represent some of the calls you receive for personal injury claims, you should point every caller who has a significant amount of unpaid medical bills to a bankruptcy attorney.

4) CREDIT CARDS

Oh, those credit cards, they are so tempting! They lure the unknowing into their web and treat them so, so good! That is, until one payment is missed or sent late. When that happens, watch out! The interest rate will jump from 5% to 32% overnight, not to mention the late fees that will be added. If making the minimum payments created a hardship, this new exorbitant amount will send things right over the edge. Calling the credit card companies is a waste of time if a lump sum amount cannot be brought to the table. Debt consolidation companies are appealing, but there is no guarantee that the creditors will agree to participate and the phone calls, hate mail, and lawsuits will continue. Send this client to see a bankruptcy attorney.

While a client with significant income may not qualify for Chapter 7, the benefits of Chapter 13 can cure his financial headaches. In a Chapter 13, the Means Test is used to determine how much an individual can afford to repay to unsecured creditors. Taking into account the filer’s necessary living expense and secured debt payments, the remaining monthly income of the filer is considered disposable income. The monthly disposable income is applied to the unsecured debt. Recall, a Chapter 13 bankruptcy may only last a maximum of 60 months. If disposable income is calculated to be $500 a month, the filer will only pay $500 per month for 60 months. The unsecured creditors are paid a pro rata distribution of this amount. From the time the bankruptcy case is filed, the unsecured creditors are no longer allowed to add interest to the debt or to charge late fees or other expenses. This means the amount owed on the date of filing is the maximum amount the filer may repay on the debt. So long as the filer makes each of the payments for 60 months, any unpaid amounts are discharged. The creditors can never again attempt to collect on the remaining debt. Your client will also find satisfaction in knowing they have repaid some or all of their debt. Most filers want to pay their debts; they simply lack the income to do so.

5) MORTGAGES & FORECLOSURES

You have seen the headlines and heard the news reports, a great many people are struggling with their mortgage payments. In addition, it has been discovered that an increasing number of mortgage servicers have misapplied payments, especially when a homeowner has fallen behind at some point during the repayment process. When the mortgage payments are behind, either actually or because of misapplication, the lender will send the home into foreclosure. A homeowner may defend a foreclosure action without filing bankruptcy. However, if the homeowner is experiencing any other financial problems, a bankruptcy filing can eliminate all of the financial burdens at once.

A Chapter 13 bankruptcy will allow the filer up to 60 months to bring the mortgage current. It is important to know, however, that the Bankruptcy Code does not alter the terms of the mortgage other than to allow a period of time to bring the arrears current. A homeowner who has bitten off more than he can chew, will not be able to keep a home with mortgage payments outside of his income level. In addition, while few other creditors are allowed attorney fees and expenses for the cost of dealing with the filer’s bankruptcy, the mortgage creditor will be allowed to add these fees to its claim for payment.

WHEN BANKRUPTCY MIGHT NOT BE THE RIGHT OPTION

While bankruptcy may appear to be a fix all for debt problems, certain debts are excepted from discharge[vii]. Here is the short list:

1) Taxes

2) Child Support & Alimony

3) Student Loans

4) Debts arising from Really Bad Stuff

But, hold your horses, because there is always an exception to the exception. Don’t be too quick to tell your client bankruptcy will not help him with his problems. I’ll repay the favor by not telling them they don’t have a valid personal injury claim.

1) TAXES

We all know the government is going to get its money. For the most part, this is true. Honestly, I pay my taxes each year so I am glad it cannot easily be discharged. Recent tax debt, generally that which was incurred in the 3 years before filing, cannot be wiped away through bankruptcy.[viii]  Tax debt incurred prior to those 3 years, and for which returns were filed by the client in a timely manner, might possibly be discharged. However, if the client has entered into a compromise and settlement with the IRS, there is a possibility the debt must be paid. Even if the tax debt must be paid, a bankruptcy case filing may prevent additional interest and penalties from being added. I’m providing you the basics. The point to take away is that some tax debt can be eliminated or reduced through bankruptcy.

2) CHILD SUPPORT & ALIMONY

Clients call it child support and alimony, among other distasteful descriptions, but the bankruptcy code uses the phrase "domestic support obligation."[ix] A domestic support obligation may be more than simply child support or alimony. Do not indicate to your client that anything other than child support and alimony can be wiped away through bankruptcy. A debt owed to a spouse, former spouse, or child of a debtor that is incurred by the debtor in the course of a divorce or in connection with a divorce decree or property settlement agreement may not be dischargeable.[x] The important thing to pass along to your client is the likelihood that these debts must be paid. However, if your client has accrued arrearages on domestic support obligations, a Chapter 13 bankruptcy may afford him up to 60 months to bring those arrears current. Send your client to an expert before you give him bad advice.

3) STUDENT LOANS

Student loans are readily available to those seeking to further their education, as perhaps they should be. While these loans can provide an otherwise impossible opportunity to receive an education, a large number of recipients fail to complete their degree. Without the anticipated increased income that follows having earned the degree, a borrower is unable to make even low monthly payments toward the debt. Once the forbearance and deferment options run out, the borrower is put into default. A government backed education loan provider may setoff the amount owed from the borrowers tax refund. It is when this happens that the borrower begins looking for options.

For the most part, education loans cannot be wiped away like credit card debts under the bankruptcy code.[xi] However, relief may be available through bankruptcy if the debt imposes an undue hardship on the debtor. The Eighth Circuit applies a totality of the circumstances approach to determine whether a debtor may discharge student loan obligations.[xii] In making its determination regarding undue hardship, the Court will consider the debtor’s past, present, and reasonably reliable future financial resources, the debtor’s reasonable and necessary living expenses, and any other relevant facts and circumstances.[xiii] If the debtor’s reasonable future financial resources will sufficiently cover payment of the student loan debt–while still allowing for a minimal standard of living–then the debt will not be discharged.[xiv]

4) REALLY BAD STUFF…

I bet Bernie Madoff wishes he could file bankruptcy. Unfortunately, he has more than one area of the bankruptcy code acting against him. A debt for fraud or defalction while acting in a fiduciary capacity, embezzlement or larceny will not be wiped away in bankruptcy.[xv] Nor will a debt for willful and malicious injury by the debtor to another.[xvi] Criminal fines are also generally nondischargeable in bankruptcy.[xvii] This is not to say your client does not qualify for any bankruptcy relief, only that these types of debts will not be discharged.

Bankruptcy may still be a valid option for your client. In lieu of a wage garnishment to collect on the judgment rendered in the types of cases described above, your client may be allowed up to 60 months to repay the judgment. If the legal fees and expenses associated with paying the judgment have prevented your client from meeting other obligations, a Chapter 7 or Chapter 13 bankruptcy discharge may help eliminate the rest of his financial problems.

I have provided you the quick and dirty on when your client should file bankruptcy. Certainly, these few words do not cover every situation. But, if ever your client indicates that financial trouble are looming, have him meet with a bankruptcy attorney to discuss his options. When bankruptcy is the right option for a client, it’s as if you have handed him a big fat settlement check or the keys to the jail. They suddenly forget every lawyer joke they ever knew. Trust me. I’m a lawyer.

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[i] Deuteronomy 15:1-2 provides: "At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor, his brother, because the Lord’s release has been proclaimed".

[ii] 11 U.S.C. § 707; I am compelled to ensure you that although the Means Test has gathered a plethora of hype among the bankruptcy illiterate since its October 2005 debut, the Test often will not prevent the average family from qualifying for the debt relief afforded in a Chapter 7 Bankruptcy case.

[iii] 11 U.S.C. § 522(d)(11)(D)

[iv] 11 U.S.C. § 522(d)(11)(D)

[v] 11 U.S.C. § 522(d)(5)

[vi] For a discussion of the applicability of the made whole doctrine in a bankruptcy case, see Chapter 7 Trustee’s Brief filed in In re Fred White, Western District of Ark. Case number 1:05-bk-79706.

[vii] 11 U.S.C. § 523

[viii] 11 U.S.C. § 523(a)(1) and (7)

[ix] 11 U.S.C. § 523(a)(5)

[x] 11 U.S.C. § 523(a)(15)

[xi] 11 U.S.C. § 523(a)(8)

[xii] Educational Credit Mgmt. Corp. v. Jesperson, 571 F.3d 775, 779 (C.A.8 (Minn.), 2009)

[xiii] Id.

[xiv] Id.

[xv] 11 U.S.C. § 523(a)(4)

[xvi] 11 U.S.C. § 523(a)(6)

[xvii] 11 U.S.C. § 523(a)(7)

Estate Planning Services Now Offered

The Brad Hendricks Law Firm is now offering general estate planning services, including vital documents that form the basis of every estate plan—wills, durable powers of attorney, and living wills and powers of attorney for health care.  Depending on your particular needs, more sophisticated planning might be required.  The importance of an effective estate plan can not be stressed enough—for anyone who is 18 years or older.  An estate plan is not something reserved for the incredibly wealthy or for those with extensive assets; rather, your estate plan enabled you to set forth your wishes regarding your property, your personal belongs, and even your preferences when it comes to your health care and who should take care of your children or pets in the event something happens to you or your spouse or significant other.

Establishing your estate plan is not something that should wait for your later years, either.  Unfortunately, in this uncertain world, no one can predict when an estate plan will ultimately be necessary, but not having one when the need arises can cause undue stress and confusion to your loved ones after your death.  The Brad Hendricks Law Firm is available to help, and we invite you to call our firm to discuss your estate planning needs with us today.

Recent accomplishments in effort to protect the civil justice system

The American Association for Justice’s mission “is to promote a fair and effective justice system—and to support the work of attorneys in their efforts to ensure that any person who is injured by the misconduct or negligence of others can obtain justice in America’s courtrooms, even when taking on the most powerful interests.” 

The AAJ has released a video showcasing its accomplishments over the past year, which you can watch at the following American Association for Justice website.