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New Legal Services Project Aims to Help Low-Income Debtors With Bankruptcy

Friday, February 24, 2006

  • By: Edwina Martin
  • Organization: Legal Services for New York City

New Legal Services Project Aims to Help

Low-Income Debtors with Bankruptcy

Low-income New Yorkers have a new ally in their struggles with crushing debts. The New York City Bankruptcy Assistance Project (NYC BAP) opened its doors this week to assist indigent New Yorkers in navigating through the bankruptcy process-without charge to the debtor.

The Project is a response to the passage by Congress, last April, of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which made it more difficult for consumers to obtain relief from debts through bankruptcy.

Worried that the Act would make it too difficult or costly for truly needy families to get relief from debts that they could not pay, private-bar attorneys, through the Public Service Committee of the Federal Bar Council, raised over $200,000 from over 30 major New York City law firms to create a project to help needy low-income New Yorkers through the Bankruptcy Process. The result was the Bankruptcy Assistance Project.

The Project is housed at Legal Services for New York City (LSNY)-the largest provider of free civil legal services to poor people in the United States, and will be headed by William Kransdorf, an attorney with over 13 years of experience in bankruptcy law and legal services for poor people. Prior to joining LSNY, Mr. Kransdorf was the Director of Legal Services of Legal Aid of Marin County, in San Rafael, California. He is a 1992 graduate of Harvard Law School.

"This Project will directly help some of New York City's most vulnerable, hard-working poor people get on their feet and participate in the economy," states Andrew Scherer, LSNY's Executive Director. He added that "for people who have recently climbed out of dependency on public benefits-or out of homelessness-it can be devastating to then have your wages garnished or your checking account seized. This Project will help prevent that kind of setback."

Mr. Kransdorf noted that the Project is designed so that both its debtor clients and its volunteer attorneys will be spared many of the harshest new rules of the Bankruptcy Reform Act. Mr. Kransdorf states that this is important because "many people-even bankruptcy lawyers-don't realize that the Bankruptcy Reform included some exceptions from the new rules for the poorest debtors, as well as for attorneys helping those debtors on a pro bono (i.e., unpaid) basis. In fact, for the work we'll be doing, much of the advocacy is little changed by the Bankruptcy Reform Act."

The Project will bring attorneys and debtors together at workshops where potential filers first hear an informational presentation about the advantages and disadvantages of bankruptcy. After that, debtors will meet one-on-one with attorneys for assessment, advice, and possible assistance with preparing and filing Chapter 7 bankruptcy petitions. Those who choose to file a bankruptcy petition through the Project will represent themselves in court. The Project has already signed up over 70 attorney volunteers, and anticipates recruiting many more.

In addition to petition preparation, Kransdorf anticipates that the Bankruptcy Courts and others will refer self-represented filers to the Project when it appears that those debtors are over their heads and in need of attorney advocacy. In these cases, the Project will send volunteer attorneys to represent the debtors in court.

Michael Cook, a Partner with the law firm of Schulte, Roth & Zabel LLP, and a member of the Project's Steering Committee noted, "I had worried that the Project would have a tough job asking major firm attorneys-who often represent creditors-to work for free for the Project's clients. But attorneys have been eager to sign up for the Project. They seem to really recognize the need."

People who are interested in learning about bankruptcy, who are New York City residents, and who are low-income, can call the Project Hotline at 646-442-3630 for more information. Attorneys who are interested in learning how to volunteer with the Project should call Mr. Kransdorf at 646-442-3646.


For more information, contact Edwina Frances Martin, LSNY's Director of Communications, at 1-646-442-3586, emartin@lsny.org, or visit our website at www.lsny.org.

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