Watching the Pendulum Swing between Debtors’ and Creditors’ Rights

Debt. As a bankruptcy and financial planning attorney, I spend all of my days thinking about debt. Can a debtor client discharge their student loan? Will the creditor who just hired me get paid? Which way has the pendulum swung this year in its ever-shifting pattern back and forth between creditor’s rights and debtor’s rights?

As guest editor of this issue, I am thrilled to offer you words of wisdom from debtor and creditor attorneys. They are going to tell you about changes that make it easier for a business to reorganize or a student loan to be discharged. They are going to update you on collecting all of that Covid rent that came due and the new debt collector licensing laws that may apply to your firm. They are also going to tell you how to get paid by your clients!

The last few years have included numerous changes to how and how much we can collect from others. Another change – one to California’s wage garnishment laws – is due to hit as this issue is released in September. That’s one of the reasons I love our bar association. Our CCCBA sections have sponsored numerous programs to keep us updated, including inviting a former state senator to talk about exemption changes he worked on and hosting an agent from the local IRS office to teach us about tax laws. Many of these are even available online later if you missed the program or just need to refresh your memory. Not the IRS one, though. The IRS doesn’t let us record those, so you’ll just have to attend the next program live.

On a more personal note, I want to let you know that if you are struggling with debt, you are not alone. Many law students graduate with six figure student loans and spend decades paying them back. On top of that, it’s expensive to live in the Bay Area – high rent and mortgage payments, large transportation costs, and rising grocery bills. It can be tempting to take on more work than we can reasonably handle, because we need that retainer to keep us afloat. We may want to ignore a red flag if the check is big enough. Do not risk your license! Instead, look at ways to cut costs, see if you qualify for an income-based loan repayment plan, and re-evaluate your income flow. If you start needing to touch your savings each month, talk to a professional. This could be a bankruptcy attorney, a financial advisor, your accountant, or even a business coach depending on where you are struggling. An even better idea? Treat it like your regular dental and medical visits. Sure, they are annoying, and they might cost you money, but hopefully regular appointments will catch something before it can snowball. Please accept my best wishes for your financial health. Now let’s put our attorney hats back on and get to the articles.