It has to be rough for businesses trying to get their money. A person defaults on their obligation to pay their credit card or some bill, and they have to hire a local attorney in order to file a lawsuit against the person for the bill. Companies often times will have their “go-to” attorney that they use for those types of cases. It’s not uncommon for one of these types of attorneys to have a multitude of cases going at once. Hey, it’s a tough job, but someone has to do it.
And then, there’s the person who owes the bill. What happens to them? Well, it depends on whether they know about the case and are prepared to pay the bill (or not). Some people hire attorneys to defend them, and some just blow it off to accept the consequences. Many are subjected to the questionable tactics emphasized by the many write-ups and lawsuits filed against defunct companies such as Mann Bracken. Hey, in ANY economy, it’s actually big business to get and enforce judgments.
Are there permissible circumstances in which an attorney representing a company/creditor for a bill would/could or should refer a debtor to a bankruptcy attorney? The bigger question is: is there something in the professional rules of conduct for attorneys that provides whether they can or can’t?
I wanted to take a look at a few attorneys who handle those company collection types of cases here in Maryland. I expected to find that some number of cases would turn into bankruptcy filings, mostly because that’s what some people are forced to do. What I didn’t expect to find were a large number of cases in which it appears that attorney firms are funneling cases to particular attorneys. To be fair, I should write that I don’t know HOW the same attorney(s) are getting cases with the same attorney on the plaintiff side.
I only know it doesn’t look right.
In too many of the cases, there was a predictable pattern of filings on the plaintiff and defendant sides:
Attorney for Plaintiff (company/creditor): 1) file complaint; 2) file pre-judgment interrogatories; 3) file interest worksheet
Attorney for Defendant (debtor): 1) file notice of intention to defend; 2) request postponement 1, 2 or 3 times before filing for bankruptcy on behalf of the debtor
Sometimes, judgment would get entered even after bankruptcy was filed in the case, and wages would get garnished. Then, defense counsel to the rescue! They’d get to do additional work for the client to file in order to get the wages that were garnished, released back to them.
Company/creditor gets billed for the work done by the attorney, and the debtor gets billed by their attorney for both the defense work AND the bankruptcy filing. Sweet arrangement! Especially when you can do it without actually advertising to be a bankruptcy attorney. Everyone thinks their attorney has done their best job possible, and has fully represented their interests to the best of their ability. But have they?
Looking closely at it, it really seems as though there’s a system at work. There are rules in place for HOW attorneys are allowed to advertise in order to get clients. They’re not supposed to take $ as any type of referral fee, and they aren’t supposed to put a client in a position where they feel pressure to select them. Like mortgage agents aren’t supposed to steer clients toward a particular settlement company… legal clients are supposed to know and feel that they are free to choose and explore among their choices of legal representation.
I just wonder how many of the corporate clients reflected on the following list, would appreciate knowing that they never stood a chance at getting the money that they were paying their attorney to get for them?
I’m certainly not saying that the debtors are blameless in all of this. After all, it’s their non-payment that creates the need for a legal case in the first place. However, with attorney fees being what they are, I just think that there’s only ONE party who is making out like a bandit in all of this: the attorney(s). People are entitled to seek relief from their debts, but this?
I’ll let YOU decide….
Break from 1/23/06 to Nov 2011… and Wolpoff & Abramson LLP, which is the firm that Canter, Dickerson, and Gordon worked, merged into Mann Bracken… which then went belly-up in bankruptcy (ironically). You can see more HERE.
Here’s where public information can REALLY come in handy. Anyone can use the PACER system to see the filing and case information regarding federal cases (bankruptcy is federal). By putting in an attorney’s name, you can see how many bankruptcy cases they actually filed. In this case, David B. Shapiro did a total of 146 cases since 1992 (hasn’t done one since September 2014). And if you take the time period discussed above, you can filter out and see that 86 cases were filed by him during that time period of roughly 6 years. Not much, in other words.
But here’s where it gets interesting… out of those cases then, almost ¼ are cases in which ONE DEBT COLLECTION FIRM is on the other side of the plaintiff/defendant table. That’s a hell of a percentage!
Perhaps it isn’t really as suspect as it may be appearing to be? A cursory glance indicates that similar similarities existed with the collection attorney Stephen Peroutka, who is no stranger to a courtroom. Charlene Walker, Rebecca Acks, Connie R. Robinson, Kathleen Hamilton, Mary H. Jones…. All found themselves to be on the receiving end of lawsuits filed by Peroutka, and they ALL found themselves a savior in Mr. Shapiro via bankruptcy filing. And then, the wealth gets spread! Shapiro: 1101 St Paul St, suite 405. Attorney James Koch, in suite 404, also files bankruptcy for some of Peroutka’s case filings/debtors. Sweet deal, whatever it is! (wink-wink)
I want to be clear about why I looked into this guy, and why I wrote this: David B. Shapiro is an attorney who told me that I was “going to pay for my [his] grandkid’s college” when I refused to settle a lawsuit. He also told me that I was going to go to jail, and some religious mumbling about walking the earth with muddy shoes or something. NEVER had to defend anything that could have sent me to jail, and haven’t paid him squat. I did finally get around to checking HIM out, due to the myriad of false statements he has made in and out of court. Hence, this post.
And seeing as he has already gotten into trouble with the Attorney Grievance Commission in 2014 for “engaging in prohibited direct contact with a prospective client that had the appearance of soliciting professional employment”, (say, that’s right around the time these bankruptcy filings stopped!), I wanted to see how muddy HIS feet might be. Question, answered!
Rasha’, Mr. Shapiro… and shame on you. Turns out, these shoes are YOURS!
A New York judge had some great things to say about the industry, and this article was well-written on the subject of debt collection filings. You can read it HERE.