Five Spiritual Lessons of Practicing Bankruptcy Law


No one grows up dreaming of becoming a bankruptcy lawyer. When I was a little boy, I wanted to be an astronomer or an astronaut.  Even by the time I got to law school, bankruptcy was not on my radar: I was hoping to become a professor.  But here I am embarking on my 12th year as a bankruptcy lawyer (and 4th as a trustee), and I am so grateful for the experience.  Here are five spiritual lessons I’ve learned from my practice:

5. Compassion.  My practice was primarily on the debtors’ side for the first eight or nine years, and it’s hard not to feel compassionate when you sit down and listen to their stories.  My clients mostly came to see me due to job loss, illness, divorce, and business failure. They came in very frightened and stressed out, and I thought of it as my job to reassure them, alleviate their stress, and help them find their way peacefully into a new life.  I would always think “there but for the grace of God go I,” and treat them as I would want to be treated.  The policy underlying the bankruptcy code is called the “fresh start.”  Most other areas of law  favor the powerful and rich, but bankruptcy gives the poor and vulnerable a place of refuge.  Even when I represent creditors or the bankruptcy estate, I approach my work with compassion. 

4. Perspective.  The debtor is not the only party in a bankruptcy, however.  There are so many stakeholders, and no matter whom you represent in bankruptcy court, you’re not doing your job if you don’t advise your client of their rights in relation to those other interests.  Just a partial list of stakeholders includes the judges, the court clerks, the United States Trustee, the trustee, the IRS and the other taxing authorities, other federal and state government entities, creditors, debtors, suppliers, landlords, tenants, mortgagees, co-owners, and opposing counsel. Unlike a typical court action, a bankruptcy is not a two-party dispute, but a resolution of numerous conflicts and interests. In fact, if the conflict is only a dispute between two parties, you are likely to get kicked out of bankruptcy court.  You have to see the whole field in order to know what can happen.

3. Balance.  As much criticism as has been heaped on the bankruptcy code since its amendment in 2005, I find it to be an amazing vehicle to resolve all of these competing interests.  Though some provisions are rather one-sided (non-dischargeability of student loans and the inability to modify upside-down mortgages for example), the bankruptcy code typically utilizes principles of equity and compromise and reasonableness.  Section 362, addressing the automatic stay, allows the debtor to prove that a creditor’s collateral is “adequately protected.”  Section 1129(b) lets a debtor confirm a plan if its treatment of the creditors is “fair and equitable.”  Section 707(b) considers “the totality of the circumstances…of the debtor’s financial condition.”  In bankruptcy, you may not always get the result you desire, but I do think you always get a fair shake at trying to make your case.

2. Non-attachment.  Much of the time, a client comes to me seeking to keep something that someone else is trying to take away.  A debtor may be trying to stop a foreclosure or prevent an IRS levy.  A creditor may have been paid as a vendor within 90 days prior to a bankruptcy filing and may want to keep the trustee or debtor-in-possession from clawing back a preferential payment.  Each time, I have to patiently explain to the client his or her rights as well as the rights of the opposing debtor, creditor, trustee, or other stakeholder.  And sometimes I have to tell them that under the circumstances they are going to lose, or get a settlement at best, but that the bad result for them may be the best for the system as a whole.

Bankruptcy judges are very smart, and I have found them to be very wise, too.  They have a bigger perspective and act with Solomonesque balance.  The liquidity that’s gained through preference recoveries may help a debtor to reorganize, preserve hundreds or even thousands of jobs, and provide a fairer distribution for all the creditors even if my client is unhappy having to fund that.  A debtor may lose his or her property, but that may help the greater community when the property is repurposed to its highest and best use rather than remaining in the hands of a debtor who isn’t liquid enough to develop it.  As in most prayer and meditation practices, you have to take a deep breath and surrender to a higher power.

1. Gratitude.  Over my 11+ years of practice, I have gained a tremendous appreciation for the bankruptcy system.  It is protective to debtors and creditors and flexible enough to fashion unique solutions in each case.  Each new situation is also a complex puzzle that keeps me endlessly busy and researching.  It is a calling to go deeper, to learn more, to be a better member of the community.  Just as important, though, are the lessons of bankruptcy practice that I can apply to life: compassion, perspective, balance, non-attachment, and gratitude. 

3 thoughts on “Five Spiritual Lessons of Practicing Bankruptcy Law

  1. From a bankruptcy court clerk in another jurisdiction:

    I wanted to take a moment to “THANK YOU” for sharing this blog with our court.

    Sometimes, dealing with the public, we may see so much negativity that we tend to forget the real meaning of being a “government servant”. We are here to “serve”, not only in our public life, but our “spiritual” life purpose as well. I believe, it is beneficial to be reminded from time to time, the basics of life. These “Five Lessons” are at the top of the list of the basics of life.

    Very well written.

    Thank you again for sharing and have a very BLESSED day,

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s