Wednesday, July 13, 2005

Bankruptcy and the Bar: Part Two

Bankruptcy as it Affects Character and Fitness

As Bar admission time approaches, our students' questions of character and fitness become more urgent.  Here's more on Bankruptcy . . .

Niles In a 2003 Article in the Bar Examiner, Judge Niles Jackson, a judge for the U.S. Bankruptcy Court, explains: "The fact of merely filing a bankruptcy petition, or the refusal to reinstate obligations discharged in bankruptcy cannot be a basis for denial of admission to the bar.  Such coercion contravenes the Bankrupcty Act's objective of giving debtors a 'new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of pre-existing debt.'"  Perez v. Campbell 402 U.S. 637, 647 (1971)

However, fiscal irresponsibility, fraud, and other circumstances relating to the incurring of debt and the filing of the petition may disqualify an applicant from admission. 

Candor and rehabilitation seem to be the guiding factors.  As an example, Judge Jackson cites an Oregon case allowing admission to an applicant who had failed to pay income taxes.  The facts that he filed returns, admitted responsibility for the taxes due, and began making payments were persuasive. (djt)

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