President Neal Cerne -- doing the right thing

The following letter was just faxed to Rep. Hyde concerning Bankruptcy legislation (S. 256). The letter is consistent with the DCBA Board's policy statement adopted in March 2002. -----------------------------------------

Dear Representative Hyde:

The DuPage County Bar Association respectfully requests that you sponsor three amendments to correct three problems in S. 256 when the House Judiciary Committee considers this legislation.

S. 256 would require debtors' attorneys to: (1) certify the accuracy of the debtor's bankruptcy schedules under penalty of harsh court sanctions; (2) certify the debtor's ability to make payments under a reaffirmation agreement; and (3) identify, advertise, and conduct themselves as "debt relief agencies" subject to a host of new intrusive regulations. These attorney liability provisions would be a disaster for the nation's bankruptcy system for many reasons.

* By holding debtors' attorneys personally liable for the accuracy of their clients' schedules, the measure would force the attorney to hire private investigators and appraisers to independently verify the existence and value of all the client's assets, adding thousands of dollars to the cost of representing a debtor in bankruptcy. Most individual debtors will not be able to afford these new expenses, resulting in many thousands of pro se debtors clogging up the court system. * These provisions will create a harsh new liability standard for debtors' attorneys who do not conduct a lengthy investigation and appraisal of the client's assets. If these costly steps are not taken and the Chapter 7 petition is dismissed or converted to a Chapter 13, the court could then impose harsh sanctions and civil penalties on the attorney personally. In addition, most malpractice carriers are expected to exclude this new liability from coverage under their policies. * As a result of these harsh new liability provisions, many attorneys will no longer agree to represent debtors in bankruptcy. In addition, because the new certification standards apply to all debtors' attorneys whether or not they charge a fee, these provisions will strongly discourage lawyers from providing essential pro bono bankruptcy services to the very debtors who need them most.

We appreciate your consideration. Thank you.

Respectfully, Neal W. Cerne President