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Survivor’s Guilt | The Personal Bankruptcy Lawyer

Globally conventional thinking confirms that few people have compassion for lawyers who are viewed even in the best light as an expensive necessary evil. William Shakespeare may have indelibly established this perception with his infamous passage in Henry VI, "The first thing we do, let's kill all the lawyers".

Medical Shock Wave

During the pandemic’s initial onslaught in the US in late winter/early spring 2020, the nation’s medical corps and other essential workers were under relentless pressure treating an endless number of patients stricken with the Covid-19 virus. It was a verifiable apocalyptic period. The death toll was staggering as medical personnel worked with a paucity of medical supplies, protective gear of questionable quality and little knowledge about the virus. The haunting psychological and gut-wrenching decisions occurred during triage, a decisional crossroad that often determined which patients would probably live or die.

Despite their Herculean efforts tragically some medical professionals were so distraught at the loss of humanity that they took their own lives while other succumbed to the disease. Present-day the pandemic still lurks menacingly while biotech companies worldwide are fast-tracking the development, testing and eventual distribution of a vaccine.

Corporate Financial Shock Wave

The pandemic has caused global economic destruction with mass unemployment catching everyone unawares and unprepared. The resultant economic devastation has permanently closed of thousands of businesses and the reduction of sales in thousands of others.

Finally there are still going concerns in that dark gray zone called bankruptcy. Some firms will emerge successfully albeit far diminished while others are completely liquidated. As always the ultimate casualties are the employees caught in the firm’s riptide.

Personal Financial Shock Wave

Inevitably the tidal wave of personal bankruptcy filings from every socio-economic class will inundate the personal bankruptcy lawyers’ offices and eventually the court system.

Pre-Pandemic Household Debt Snapshots

The following chart provides a sobering pre-pandemic trend like the Titanic, short of life rafts, before the collision with the viral iceberg. In the following chart entitled Pre-Pandemic Household Debt at a Record High provided by the New York Fed Consumer Panel/Equifax and presented by Statista, an online statistical firm, to paraphrase, the total household debt reached $14.3 trillion in 1Q2020 surpassing the peak at the height of the Great Recession 3Q2008 by $1.6 trillion. On the other hand, the delinquency rate that is at least 30 days past due (4.6%) is at present-day lower than it was during the 4Q2009 Great Recession (11.9%), a figure worth monitoring.

With respect to credit card debt, the following chart entitled Where Credit Card Debt is Highest and Lowest in the US, provided by the Federal Reserve Bank of New York and presented by Statista, adjusts the figures on a per capita basis rather than gross figures. This adjustments places Alaska first on a per capita basis with $4,270 vs California’s $3,420, but which has a considerably higher population of 39 million residents to Alaska’s 730,000.

Credit cards represent a short-term lifeline for the unemployed to purchase essentials. When their credit limits are reached and they’re unable to pay even the minimum amount due, their lives will deteriorate rapidly.

The trend of the pre-pandemic figures in the aforementioned charts were relatively unchanged when the pandemic forced lockdowns in March 2020 so it still provides an ominous snapshot of the financial vulnerability of Americans making them susceptible to filling for personal bankruptcy.

Forthcoming Legal Psychological Shock Wave

The notable and high-profile sectors that have thrived during this global misery have been biotech and social media. A new wave, this time legal not medical or in high-tech communications, looms just over the horizon. The niche sector that will be emerge will be the personal bankruptcy sector.

Personal bankruptcy lawyers usually deal with a client’s self-destructive behavior of gross financial irresponsibility in part by abusing their multiple lines of credit. For this reason personal bankruptcy lawyers’ emotions are in check because they are doing the client a service by providing the best way to get back on their feet financially and hopefully leading a more financially responsible lifestyle.

During the pandemic era these lawyers will encounter thousands of clients who were financially responsible in every way yet are victims of a once-in-a-century event that has vaporized their immediate and even retirement savings. During the 2000s wages were stagnant compelling some of these clients to work at two jobs just to breakeven. For this reason they face the risk of suddenly going from middle class to homeless overnight

Exacerbating their anger and fear lies the dark underlying bitterness towards the upper management of their firms who have received (legally) lucrative bonuses just prior to the company laying them and hundreds, sometimes thousands, of others before filing for bankruptcy. It can be assumed that these emotions will spillover in their legal consultations.

Initially additional business will be a long-term, post-pandemic bonanza for personal bankruptcy lawyers. Eventually because of the new demographic the psychological casualties amongst personal bankruptcy lawyers will grow particularly in a specialist field that is grossly understaffed – not enough courts, judges and qualified personal bankruptcy lawyers - for such a deluge resulting in an epic logjam of cases.

Although fast-track learning lawyers from other legal specialties could fill the gap, their lack of experience and inability to maintain an unusually tough professional perspective may reduce this legal eagle cavalry rescue to a trickle. For examples just because a corporate lawyer can be stoic in a mergers & acquisition deal resulting in hundreds of layoffs he may be emotionally unsuited to becoming a divorce lawyer where the up & close, toxic and highly personal one-on-one battles may be overwhelming.

It seems that even amongst the employed, no sector whether pandemic or post-pandemic, eludes the broad-based psychological pressures of this crisis even if they do make money hand over fist. It’s not a matter of making money, rather keeping one’s sanity.

[Originally published 6 October 2020]

Copyright 2020 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

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