The bankruptcy business: Paul Bare reflects on 32 years in bankruptcy courts, effects of the recession and more

Paul Bare is a Traverse City bankruptcy attorney who has represented debtors for over three decades, and he is as busy as ever. Last year, he added a second attorney to his practice to help handle the workload. The TCBN chatted with him recently, asking him to take a look back at his career, what work is like during this recession and why he does what he does.

Why bankruptcy?

"I started doing bankruptcy in Traverse City in 1977. When I came up here, no one else was really doing bankruptcy. It's kind of a 'geeky' area. Everything is based on statute and court rules. You have to be kind of a paper-chaser. That's not everybody's cup of tea. I've always enjoyed it."

What would you be if you weren't a bankruptcy attorney?

"I'd probably still be in the law business, just in some other niche…but not divorce. I have a tremendous respect for divorce attorneys. I did it for a few years and I loathed it…it's emotionally draining."

How many cases do you

think you've done?

"I specialized in bankruptcy in 1984 and until the late '90s I did 80 to 100 cases a year, pretty consistently. Then, in the early 2000s, it began to inch up."

A little background…In October of 2005, a federal law went into effect designed to reduce the number of people taking advantage of the system and consequently reduce filings. It also made the process much more difficult and more expensive. That year, Bare did 250 filings as people rushed to beat the change in the law.

In 2006, filings dropped off, but soon began to escalate and last year his office was back up to 250 cases. He expects to do 250 cases again this year.

Does the economy take all

the blame?

"Yes, it's just due to the economy. Michigan was ahead of the curve on the economy. We've been dealing with it for several years. Bankruptcy was up 20 to 30 percent nationwide last year. It's the job loss.

"Someone said to me, 'You must really like recessions.' I don't. Even during good times, I have lots of business…divorce, medical issues. The case you don't get as much is job loss. Right now, you lose your job, you're in trouble."

What's the best part of your job?

"I'm usually able to help people quite a bit. People appreciate it. The court we work with is excellent and, in most respects, the bankruptcy law is a good law."

What are the downsides?

"During a recession you can get a lot of very sad cases. It can be a bit of a downer…people losing homes, businesses, jobs. I had a lot of people this winter saying 'I don't know how I'm going to keep my propane tank filled.' It was a cold, hard winter and they didn't have money for utilities. While that's part of the job, I don't think anyone likes to listen to that…particularly people losing homes."

How do you respond?

"I tell people, 'This is a bad time. Bankruptcy will help you.' Most people are survivors. But what I'm concerned about is the number of people leaving the area."

Bare said he is seeing people head to the northwest part of the country, as well as to Texas and North and South Carolina. "They're usually young families and I don't think they'll come back. They're going to places that are more normal…where employers are hiring."

Any myths about bankruptcy?

"I always stress that bankruptcy is a last resort…when you don't have any other choice.

The biggest myth is that most people who file bankruptcy don't really have to, but that they've just been irresponsible in some way."

On the contrary, Bare says most of his clients are very aware of the law passed in '05 that made filing much more difficult and consequently much more expensive.

"They are very aware that the days of filing for a couple of hundred bucks are over. And most of my clients are pretty aware of the damage bankruptcy does to their credit ratings. What they are unaware of is that it can impact their employment. Employers can look at a [prospective] employee's credit rating."

How does this recession compare to others you've worked through?

"This one is as bad as '81-'82, particularly for certain industries. I'm really hoping the summer tourist season doesn't take much of a hit. I really hope employment loosens up." BN