By Tom Gantert
Legal News
Sitting in his downtown Jackson office, bankruptcy attorney Patrick McFadden is asked about a hot topic that has gotten international attention: Detroit is the largest city in the United States to declare bankruptcy.
"It's more complicated than I know," says McFadden, 44. "This is way above our pay grade."
Still, McFadden says he feels good about where the city is headed.
"Detroit has been insolvent for a very long time," he says. "It could be a start of a new Detroit."
If the city is able to find a way around its burdensome pension obligations via bankruptcy, McFadden says other cities may follow suit.
Jackson bankruptcies are filed with the United State Bankruptcy Court in the Eastern District of Michigan in Detroit.
The number of Chapter 7 bankruptcies filed in Detroit has steadily dropped since 2009 when there were 42,643 Chapter 7 cases filed. That dropped to 42,066 in 2010, 35,291 in 2011, 30,043 in 2012.
Through May, the court is on pace for 29,191 cases in 2013.
But McFadden says he has seen no such drop in cases at his Bankruptcy Clinic of Michigan PLLC practice.
In fact, to keep up with demand, McFadden hired Thomas Riley, a Lumen Christi High School alumnus who graduated from Cooley Law School in 2012.
McFadden says for now the firm handles only personal Chapter 7 cases, which he described as "total liquidation." McFadden says he wasn't comfortable doing Chapter 13 cases, which involves the client making payments on a plan set up by the court.
Clients often don't complete Chapter 13 and have it dismissed, only to sometimes come back and file total liquidation in Chapter 7, he says.
But with Riley's urging, he says the firm may expand to include Chapter 13 cases. ?
Riley told of a couple that came to the office overwhelmed by their debt. He said the woman told them she realized there wasn't anything that could be done about the thousands of dollars of credit card debt they had.
Riley corrected her and said that credit card debt could be included in a bankruptcy.
"She was so happy," Riley said. "She just started crying."
McFadden says that is what he likes most about his business.
"We are not getting rich overnight," McFadden says. "But we are helping a lot of people."
McFadden also has an office in Adrian and is considering expanding his bankruptcy practice to Oakland and Wayne counties.
And he has a side practice in which he handles criminal cases throughout the state.
The Oakland County native graduated from the University of Michigan in 1992 before entering Valparaiso University Law School in northwest Indiana.
McFadden started doing personal injury work in Mt. Clemens before deciding to move to Jackson in 1998 to handle drunk driving cases. Through the years, many of his clients asked about bankruptcy.
In 2009, McFadden decided rather than passing on his clients via referral, he would handle the bankruptcies himself.
The job has its gratifying moments, he says.
"Nowadays, there are a lot of really good people going through bankruptcy," McFadden says. "I get phone calls from clients so elated and thankful."
Published: Thu, Aug 1, 2013
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