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For the second time this year, a New Jersey Supreme Court committee is reining in lawyers who market their services through mass mailings to people whose names appear on court dockets. In an opinion published Monday, the Committee on Attorney Advertising sharpened the pencil on what bankruptcy lawyers can say in solicitation letters and what disclosures they must make. Opinion 30, titled “Written Solicitation to Represent Clients in Bankruptcy,” deals with the practice of soliciting clients by writing to people facing mortgage foreclosures, collection actions and other suits. The lawyers typically buy lists of the names and addresses from people who glean the information from court records. As the committee notes, gathering the names is permitted under Court Rule 1:38, which governs confidentiality of court records, and the mailings are permissible, subject to certain conditions, under Rule of Professional Conduct 7.3(b)(5). The committee found, however, that some solicitations oversell the advantages of bankruptcy while failing to warn of the drawbacks. They often pressure people into running out and hiring a lawyer to avoid losing their homes or other assets by reciting “a litany of possible disastrous consequences.” The “formulaic” mailings do not take into account individual defendants’ circumstances or the possibility that some of them can successfully defend the actions or pay off a judgment, rendering bankruptcy unnecessary. Some lawyers also go too far in suggesting they are better equipped than other attorneys to represent recipients, the committee said. Many letters violate ethics rules prohibiting communications about a lawyer’s services that omit necessary facts or raise unjustified expectations, RPC 7.1(a)(1) and (2), requiring conspicuous disclosures, RPC 7.3(b)(5), and barring use of coercion and duress in promoting a lawyer’s services, RPC 7.3(c)(2), says the opinion. Examples of “overreaching and improper statements,” include: “If you do not act quickly, you could very likely lose your property or home.” “YOU NEED NOT LOSE YOUR SINGLE MOST IMPORTANT INVESTMENT, BUT YOU MUST ACT SOON.” “In order to save your home you must act quickly and you must do so having been given the right advice… Time is limited.” The committee faulted lawyers for touting themselves with language like: “YOUR BANKRUPTCY SPECIALIST.” “I have been helping people just like you save their homes and improve their financial condition for the past XX years.” “My practice is exclusively devoted to debtor relief and I have developed an expertise in assisting homeowners in saving their property.” “I urge you to compare my experience, reasonable fees, and personal attention.” The letters also exaggerate the benefits of bankruptcy by making unqualified statements that it can stop foreclosure, car repossession, utility shutoffs and creditor harassment and wipe out credit card debt, said the committee. Opinion 30 says that from now on, lawyers who send the letters must personally verify each recipient’s name and address, refer to the specific nature of the litigation, avoid raising unjustified expectations and refrain from indicating “a special relationship, expertise, experience or knowledge which will or may provide a more favorable result” than other lawyers. The opinion includes a suggested form of notice, which refers to bankruptcy as “a drastic remedy” that does not cure mortgage arrears or allow redemption of property and other “potential pitfalls.” LAWYERS QUESTION NEED FOR RULING Committee chairman George Kenny, of Connell Foley in Roseland, N.J., says Opinion 30 is a response to increased complaints in recent months from sales-pitch recipients and their lawyers. He says the committee consulted a bankruptcy expert in arriving at its decision. But one consumer bankruptcy lawyer, Mark Goldman, says the opinion reflects lack of familiarity with the practice. For one thing, he says, it is incorrect to say that in Chapter 13 matters court approval is needed to dismiss. Goldman, of East Orange, N.J., estimates he opens more than 600 files a year and so far this year has 37 clients from foreclosure letters and three from people facing collections or tax liens. Returns from the letters have been decreasing the past few years but he defends their use. Goldman says his letters have drawn few complaints in more than 30 years. They refer to his experience, offer free consultations, advise that he obtained the recipient’s name from public records and urge people not to take offense. An accompanying pamphlet explains bankruptcy and the differences between Chapters 7 and 13. “I feel I provide a service by giving people information that there is help available to them,” he says. “They can choose to hire me. There’s nothing that creates additional duress on these clients.” Opinion 30 disapproves of telling people they might lose their homes. But, says Goldman, “if you’re in foreclosure and you don’t defend this thing or file a Chapter 13, you’re going to lose your home. It’s not misleading at all.” The various disclosures required by the opinion are subjects he discusses with prospective clients during their free consultation, says Goldman. He can tell them about his decades of experience then, so why not in a letter, he asks. He admits there are unscrupulous lawyers who send out improper or inaccurate letters, but says Opinion 30 is not needed to deal with that problem. If nothing else, the required disclosures will make the letters so lengthy no one will read them, he says. Katherine Suplee, a Union, N.J., solo, has never used the letters, but hears about them from a small number of clients. “Many of the things in these letters are true,” she says. Bankruptcy does stop lawsuits, harassing telephone calls and letters. Suplee doubts the solicitations make people more anxious. “They were anxious enough on their own,” she says. Stanley Low, of Low & Low in Hackensack, N.J., stopped sending letters about two years ago because they generated more complaints than clients. People saw them as an invasion of privacy. “We decided this is not the way to do it,” he says. “The firm gets clients mainly through word of mouth, telephone books and cards in diners. However, he asks, “Why shouldn’t you be able to say you’ve been doing these cases for so many years?…One thing consumers don’t have is a network of family or corporate lawyers. They want someone who can help them.” People facing foreclosure are under enormous stress that renders them vulnerable to letters offering help, says Kenneth Rosen. “It’s exactly like ambulance chasing, when an attorney pursues someone in a moment of weakness.” Rosen, of Roseland’s Lowenstein Sandler, does Chapter 11s and occasional Chapter 7s or 13s. The committee’s previous ruling, released last January [175 N.J.L.J. 159, Jan. 12, 2004], imposed similar constraints on soliciting municipal court defendants. And it’s had an impact, says Kenny: The solicitations, once “running rampant,” are now “running dry” with no additional complaints received by the committee.

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