Even as debtors dash to file for bankruptcy before sweeping changes take effect in October, some attorneys are preparing to exit that area of practice.

There are 11 entries under bankruptcy attorneys in the current Dex Yellow Pages — down from 13 four years ago — and the number will likely decline in the next edition.

"I’m going to keep doing it, but I’ve heard of three (attorneys) that aren’t going to be doing it any more," says Medford attorney Tom Dzieman. "I suspect one or two of those large (Yellow Page) ads will be gone."

Ashland attorney Joe Charter, who has handled Chapter 7 bankruptcies and advertises his service in the Mail Tribune, says he’s leaving the field behind, primarily because of the expense and liability.

"The due diligence required of debtors by attorneys is going to make it more expensive," Charter says.

Advertisement

Attorneys will have to certify information offered by debtors is true when they present it to the court and will be subject to sanctions if it’s found false. Charter says that some of the work previously done by the bankruptcy court will now fall to attorneys.

Dzieman says he’s heard from three attorneys planning to leave bankruptcy work behind.

"I think it’s a combination of things," he says. "The bankruptcy reform act has been out there for eight years. Everybody knew it was coming. The bill itself is over 500 pages long. We’re not talking tinkering here and there — it’s pretty much an overhaul from top to bottom. It’s like learning a whole new area of the law."

He says his standard responses to client questions may no longer be standard.

Central to the reform is a means test designed to shift more Chapter 7 applicants to Chapter 13 filings.

Chapter 7 accounted for roughly 70 percent of the 1.59 million personal-bankruptcy filings in 2004.

Applicants with incomes higher than their state’s median — minus some necessary expenses such as medical bills — will be required to file under Chapter 13, a process that consolidates the consumer’s debts and requires payments to creditors over a three- to five-year period.

Attorney John Curtis of Central Point says several changes make bankruptcy less appealing.

"There is a whole, big ramp-up I’m not looking forward to," Curtis says. "But I’m going to try and stick it out and for now my intent is to stay."

Salem attorney Eric W. Olsen whose firm operates 13 offices around the state — including Medford, says there are dangers ahead if too many lawyers bail out, or debtors try to represent themselves under the new rules.

"There may be a few guys doing fewer cases," Olsen says. "The paperwork is getting pretty onerous."

He says there will be no less demand to file for bankruptcy.

"It would be like someone saying you’re not going to have a heart attack because it’s too complex," Olsen says. "You’re still going to have a heart attack."

The Medford area has the "highest-degree" of do-it-yourself bankruptcies in the state.

"People will get in debt and try a do-it-yourself bankruptcy and not be able to qualify," Olsen says. "They have no idea what it will cost."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.