Consumer Bankruptcy Journal Summer 2017 - Page 31

THE BANKRUPTCY CRISIS IN CHICAGO reach-highest-level-since-crisis (March 10, 2017)]. Fourth, Chicago was a creditor’s “paradise” and the worst place in the country to be a debtor. One attorney opined that Illinois collection laws were made by creditors for their own benefit. [Footnote: The authors note that the Commercial Law League is based near Chicago (in Wauconda, Illinois). “Since 1895, The CLLA has been associated with the representation of creditor interests...” http://clla. org/?page=about_mission.] Was it the attorneys’ fault? Or was it the fault of Chicago’s aggressive bankruptcy bar? Bankrupt in 10 reported that both the U.S. Attorney’s office and the Chicago Bar Association were both investigating the “city’s skyrocketing bankruptcy rate” in 1957. One of your authors (Mr. Fox) obtained statements from an Assistant U.S. Attorney in Chicago, Nicholas Manos. Mr. Manos identified six Chicago attorneys who were responsible for 50% of the wage earner bankruptcy filings. Initially, these attorneys obtained their clients from tipsters who fed them names of potential debtor clients. Quoted in Bankruptcy in 10, Chicago based U.S. Attorney Robert Tieken estimated that in 1956, three of the six attorneys filed 1,300 consumer bankruptcy cases and grossed (between them) about $260,000.00. [Footnote: Most modern consumer bankruptcy attorneys are just small time operators. According to Dollar Times, “$260,000.00 in 1956 had the same buying power as $2,342,250.75 in 2017.” http://www.dollartimes. com/calculators/inflation.htm.] At one time, Landon L. Chapman was Chicago’s busiest bankruptcy attorney. Mr. Chapman identified the causes of the bankruptcy uptick: the increase in easy consumer credit; unemployment; and the breakup of families and abandonment by fathers of their families. Mr. Chapman suggested prohibiting deficiencies on repossessed automobiles and asking merchants to be more liberal about taking back merchandise when a consumer cannot make the payments. a collector identified three groups of debtors. The first group (moral and upright) fell into debt -- but responsibly paid their obligations though often over an extended period. The second group of debtors would dispute the debts, hire counsel, and negotiate some lesser payment amount. The third group, the ones who file bankruptcy, do not contact their creditors after running up debts. The collector, name withheld, concluded his letter with the hope that the bankruptcy mills could be “stamped out in Chicago.” [Footnote: Chicago Daily Law Bulletin, What’s Behind the Increase in Voluntary Bankruptcies Here?, November 29, 1960.] [Footnote: Chicago Daily News, undated but likely shortly after October 1957.] Landon Chapman believed that “bankruptcy-made-easy” v0FP&W7BvVƗGFRBv7@( V67'WVW27&VFBW&6G2@WVFW'2( "6B#VVW26VFrF&VRGF&W26( 2fVW2&vVBg&CFCÃC3v2fW&vPfVRf"FfGVƗVFFVƖRFF( 2&7F6R6FW r"6WFVFVB7&VFBF𦆗2&'WB6ƖVG2vFV@FV"fVW2fW"FR7W'&6vǒ"6W7FFVBFB26V7F&FR&&WBRRR&"6( 2rff6RB6vvFFFR( 7&VFBff6R( 6আB7FfR6V7F2FW'FV@F6V7B2fVW2FRS2"6( 2w&726RB&vV@g&C#SFCSvF"6W'6ǒWGFr&WGvVVCBFCCRVǒॴfFFS66vFǒWw2rFB&'WF7&vR7F&W"RSs66v7VХFW2vW&RfRf &'WF7V'c2Ф6V"f6R&W6FVBbvV0f&v&VBFBVRvW&P&Vv&Fr&'WF7F67Vǒ6&2&&VBg&FR7&VFB'W&VR`66VG'6W'fVBFB&'WF7fƖw2&VfV7FVB( &'&VFv( ЦB( 66W"( &'WF7R7FFVBv26R( v&Bb6^( 'WB&RॴfFFS66v7VХFW2vW&RfRf &'WF7V'c2Ф66v#pf6f'v&BF66v#rFP&&V2vF67VW"&'WF6W0&R7FV&W6fVBB66vG6V`&RVFrFv&B6FW"ग&2F( BRFfFFSWG0&'WF77V6vgVFVf"66v7&( 066v'W6W72GGwwr66v'W6W726'F6R#cc#"Uu3"ccCR2Ц&'WF77V6vgV֖FVЦf"66vФBWfW'Rw&VVBvF"6खW2WGFW"FFRVFF"F766Fb67VW"&'WF7GF&W27VW"#p45TU"$%UD5U$3