Keeping it Clean - The Ethical Side of Bankruptcy Law
At first glance, bankruptcy law is not one of those practice areas that conjure ideas of ethical concerns. After all, the noble duty of a consumer bankruptcy attorney is to assist their clients in getting a fresh start financially. What could be criminal about that? To explore the little known underworld of bankruptcy crime, I recommend that you read Chip Bowles' article entitled CSI Bankruptcy: The Hard Road from Dealing with Troubled Clients to Living with Troubled Cellmates." Chip's article is printed in the current October addition of American Bankruptcy Institute Journal.
In the article, he reminds practitioners that the "rules" of ethics for bankruptcy attorneys are not found in title 11 of the U.S. Code, but in title 18, which are the laws governing federal crimes. Specifically, the section related to bankruptcy attorney behavior can be found at 18 U.S.C. Sections 152-157. Relevant case law cited in the article offers sound proof of the perils a bankruptcy attorney can face if dishonest tactics are used:
- See United States v. Grundy and Thornburgh, 7 U.S. 337 (1806). In this case, the court discussed advice on denying ownership of a vessel.
- See United States v. Sullivan, 522 F.3d 967 (9th Cir. 2008). The bankruptcy attorney in this case was convicted of fraudulent concealment of property of the bankruptcy estate under 18 U.S.C. Section 152.
These cases offer keys examples of unethical behavior and the consequences of that behavior. Chip points out that while there is not a huge number of cases reported where bankruptcy attorneys have been convicted of bankruptcy crimes, there are a large number of cases where attorneys have departed from the straight and narrow path of the rule of ethics. While we want to vigorously advocate on behalf of our clients, deconstructing the given rules will create a slippery slope that will only hinder competent client representation.
So, my advice - keep it clean, offer stellar representation to your clients, and preserve your integrity in the process.
