VLSP Responds to Client Demand for Bankruptcy and Debt Defense Services
By Vicki Jacobs, VLSP Managing Attorney

It will be of no surprise for anyone to hear that the requests for legal services by the low-income clients of the Voluntary Legal Services Program reflect the social and economic trends in our community. There are certain areas of law where assistance is always needed: divorce and custody matters, landlord/tenant disputes, guardianship cases, consumer cases, debt defense and bankruptcy cases. For some time now, however, as the economy has faltered, the requests by VLSP's clients for legal assistance with debt defense and bankruptcy matters has skyrocketed. As a result, at VLSP we greatly need the assistance of attorneys who can volunteer their time on a Tuesday evening at either VLSP's Debt Collection Defense Clinic or the Bankruptcy Clinic.

For the past 5 years, VLSP has offered a Debt Collection Defense Clinic for low-income debtors in Sacramento county and the surrounding counties. Originally scheduled only once a month to give advice on debt collection issues, the clinic has expanded tremendously in the past 3 years and is now held weekly. Approximately 72 clients are assisted each month at the Clinic. The Debt Collection Defense Clinic, which is funded by the Equal Access Fund of the State of California that is administered by the State Bar of California, takes place each Tuesday evening from 5:30 to 7:30 pm at VLSP's downtown office.

Clients seeking assistance at the clinic have a wide variety of debt-related problems, including automobile repossessions, creditor lawsuits, creditor harassment, student loans in default, wage garnishment, liens, medical bills, and identity theft. At the clinic, clients watch a 20-minute video discussing general debt collection issues, which is followed by a private consultation with a law student or volunteer attorney. In addition to providing advice, volunteers may assist clients in preparing answers to lawsuits, responses to discovery, and cease and desist letters to creditors. The clinic is also equipped to help clients settle lawsuits or negotiate with creditors.

Of late, at least one-third of the clients at the Debt Collection Defense Clinic have requested assistance with bankruptcy. In response to this increase in demand for services, and with the encouragement and assistance of the Office of the United States Trustee, VLSP opened a Bankruptcy Clinic in February 2003. Antonia Darling, Assistant U.S. Trustee, recognizes the vital need for legal services for debtors facing the daunting task of preparing a petition for bankruptcy.

"About 23% of all bankruptcy cases in the Sacramento Division of the Eastern District of California are filed by debtors who are not represented by an attorney," Darling said. "While many of the debtors do use the services of non-lawyer bankruptcy petition preparers to assist them in preparing their bankruptcy paperwork, the preparer is prohibited by law from giving any advice to the debtor. The pro se debtors often have problems with their cases such as finding their debts are incorrectly listed, they have failed to avail themselves of the exemptions to their best advantage, or they are in the wrong chapter altogether. These are often people who truly cannot afford an attorney, yet most need the advice that will help them use the bankruptcy to resolve their financial problems. Non-profit entities such as VLSP help meet the needs of pro se debtors seeking bankruptcy relief. As members of the legal community, we need to volunteer our services to help the most needy people get the most out of a bankruptcy and start their new financial future on a solid footing."

The Bankruptcy Clinic is offered the second and fourth Tuesdays of each month from 5:30 to 7:30 pm at the downtown VLSP office. Modeled after the Los Angeles Free Clinic's successful Bankruptcy Clinic, VLSP aims to assist four clients per month with filing a Chapter 7 bankruptcy. In order to receive services at the Bankruptcy Clinic, clients must first attend the Debt Collection Defense Clinic, where they are screened to ensure that they are appropriate candidates for a Chapter 7 bankruptcy. Part of this screening process involves ensuring that the clients meet VLSP's stringent income guidelines. After completion of the screening process, clients are provided a detailed questionnaire to complete and bring back to Part one of the Bankruptcy Clinic, where they meet with a volunteer bankruptcy attorney to discuss their responses to the bankruptcy questionnaire. The clients then return for Part two of the Bankruptcy Clinic, where they receive their completed Chapter 7 petition, schedules, and statement of financial affairs and a final consultation with the volunteer bankruptcy attorney. Clients file their petitions in pro per.

At the first two Bankruptcy Clinics, all four client slots filled up a month early. Given the economic climate, we expect this trend to continue.

VLSP is in dire need of volunteers to help staff the clinics. Currently, there are only 10 attorneys volunteering at the Debt Collection Defense Clinic on an occasional basis. We have been surviving on the generosity of law student interns from the UNC School of Law, who donate their time each Tuesday night in exchange for academic credit. Nevertheless, we need to recruit at least 10 new volunteer attorneys to add to our existing pool so that we can have at least two attorneys scheduled for each Debt Collection Defense Clinic. The volunteers do not have to have any prior experience. New volunteers are given the opportunity to sit in on client consultations until they are ready to proceed on their own and a staff attorney is always available for consultation.

VLSP is also in need of experienced bankruptcy attorney volunteers for the Bankruptcy Clinic. We need the assistance of at least one experienced bankruptcy attorney at each Bankruptcy Clinic, held twice a month. There is an incentive for bankruptcy attorneys to participate in the Clinic, as each attorney who completes at least 16 hours of pro bono work per year through our clinic can apply for exempt status from the payment of electronic public access user fees for court filings information.

For further information, or if you would like to volunteer at a clinic, please contact Alysa Meyer, VLSP Staff Attorney, at (916) 551-2106 or at ameyer@vlsp.org.