In this episode of Bankruptcy Law Success, I interview Marcos Oliva, a bankruptcy attorney in the Rio Grande Valley in the southern tip of Texas.

Some of the highlights in this interview include:

• The crazy story of how he was “forced” to acquire a competitor’s bankruptcy practice — including the exact details of how he financed the purchase with no money down
• How he got himself “hit by lightning” three more times and acquired three more bankruptcy practices, also for no money down
• How a simple postcard earns him more than 20 times the money he invests every month into a mailing
• Why he doesn’t tell his potential clients to download a free credit report — and what he does instead
• A little-known way to avoid scaring away clients with long forms to fill out — and how to get the information you need anyway
• And a whole lot more…

You can listen to the episode by clicking the “play” button in the audio player above, or read a full transcript below.

You can also subscribe to get an email when we release new episodes of the Bankruptcy Law Success podcast.

Bob : Hi, this is Bob Hiler of the Bankruptcy Law Success podcast, where we introduce you to successful bankruptcy lawyers, as well as powerful ideas that can transform your bankruptcy practice. Today, I’m talking with Marcos Oliva, a bankruptcy attorney in McAllen, Texas. He practices in the Rio Grande Valley near the southern border. Marcos, welcome to the podcast.

Marcos: Hi, Bob. Thank you for having me.

Bob : How did I do on “Rio Grande Valley”? Is that right?

Marcos: Perfect. Perfect, just like a native.

Bob : Well, I’m calling you from New York City so, you know, I’m not going to…

Marcos: Yeah, I’m sure many people in New York have never heard of Rio Grande Valley, so that’s OK.

Bob : So you’re right next to the border with Mexico, right?

Marcos: Yeah, that’s correct. The Rio Grande Valley is the collection of cities on the southern tip of Texas. So, yeah, we’re a border town, like, the city I live in, McAllen, is probably about five miles away from Mexico. Yeah, we’re definitely a border culture. You know, we have a very high Hispanic-Mexican culture down here. Most people are bilingual. It’s really an interesting part of the country, I think.

Bob : I saw in your website that… You mentioned that you actually went to high school in the McAllen area. Is that right?

Marcos: Yeah, that’s correct. I actually grew up in San Antonio, which I’m sure you’ve heard of. That’s about a four-hour drive north of here. My mother’s parents grew up down here, and generations before that. So, yeah, my parents… Well, my father moved down here when I was a freshman in high school. I went to high school down here and, basically, spent half my life in San Antonio, half my life down here. So, yeah, I’ve got some ties but I wasn’t from here, originally.

Bob : Oh, OK. Well, before we kind of get into bankruptcy, I saw that you… You know, this is more stalking of you on your website…

Marcos: Sure.

Bob : I saw that you attended Texas A&M and you majored in biomed. So that kind of made it sound like you’re a pre-med student but you’re an attorney now.

Marcos: Yeah.

Bob : So that was my first question. How did a pre-med student end up in law school?

Marcos: Yeah, that’s true. Oh, you did really good research. Growing up, I always had a liking towards science and math, and when it came down to picking an undergraduate major, I knew I wanted to do something in science. Actually, I went to Texas A&M because my sister was going there and I was offered a scholarship and it’s a great school. So I went there. I don’t know, I can’t tell you why I picked biomedical science but it just stood out to me. But you are right, the idea behind that… I didn’t…

I guess I wasn’t a very creative person but I figured I would do something in medicine and I was encouraged by my family to do something like that. Then, I would say my junior, senior year, I started to have doubts about that. I think, I was getting a little burned out of school and probably science, in general, and that kind of stuff. And then, a friend of mine — my senior year — got accepted to law school and went and then that piqued my interest about law school. Actually, initially, I thought I was going to get into patent law, which is where law meets science a little bit or in tech, possibly.

And so I found… I went to school, a law school, in Chicago, John Marshall Law School. They had a really strong patent program and just kind of switched gears; applied there, went there, took some patent law classes and copyright, all that stuff. Then, after I graduated, I sat for the patent bar and took that, and passed it and didn’t use it very much. I did some contract work for a company where I was like reviewing patent applications but I just found it mind-numblingly boring so I didn’t stick around with that too long.

Then, really, just ended up back in Texas looking for work. I do remember studying bankruptcy law a little bit in law school and finding it really interesting. I thought the automatic stay was really interesting and maybe the way our professor taught it. I had a chance to work with a local bankruptcy attorney and it just started that way. I guess, I started and didn’t stop. Eventually, went solo a few years ago.

Bob : So what kind of drew you back to Texas? Was it…

Marcos: Nothing in particular. Really, after law school, I had a girlfriend and I followed her to Boston where she studied in graduate school, and then things didn’t work out and I ended up back in Texas, basically. I think I was a bit homesick, too. So, I just found myself in Texas. Actually, at the time, I hadn’t even taken the Texas Bar but I was looking for work and looking for experience, which I had none.

I just happened to find a guy who was an older gentleman who’s doing bankruptcy and he needed the help. So I just went in there and just started working with him and learned it and I really liked it. It was 100 percent what he did. He was a debtor’s attorney and that’s all he did.

I think bankruptcy has some basic math elements to it, right? It’s a lot of budgeting and numbers and naturally, I like that kind of stuff. I think there’s some areas of law that are just kind of gray. You don’t really know what you’re getting into or what you get out of it, but I find bankruptcy really clear-cut. I think it just was suitable to the way I thought. I needed real black and white answers and I felt I could get that in bankruptcy.

Bob : Yeah. I know that the amount of math involved for bankruptcy attorneys really depends on the median income for a particular state. So if the median income is high in California, maybe, you don’t have to do as much kind of budget exemption.

Marcos: Yeah.

Bob : What’s the median income like in Texas, in terms of… Are you doing a lot of qualifying?

Marcos: Yeah, you know… Just a little more background about my practice. I’ve got three offices throughout the Rio Grande Valley. They’re all about 30 minutes apart, right? And we cover two counties, Hidalgo County and Cameron County. Gosh, I don’t know what the total population is but it’s probably about 2 million people, I would think. So we file about 40 cases a month throughout the three offices.

But, yeah, where we live, it is below like… probably, your average family is below median, I would imagine. Yeah, we’re one of the poorer areas of the country. Probably, about half of our cases are Chapter 7s and then another half are 13s. I don’t practice anywhere else so I can’t tell you but I would imagine we have a higher percentage of below median filers.

Bob : Yeah. So, yeah, you have three offices. I noticed that you have three offices; one in McAllen and one in Brownsville and one in… Is it Harlingen? Is that how you pronounce that?

Marcos: Harlingen, yeah, that’s correct.

Bob : So is McAllen your main office?

Marcos: Yeah. McAllen is where I live, and that’s our main office. It’s where we have most of our staff. Actually, more than half our staff. We have nine — actually, now eight — employees in McAllen. Then I have about three in one office, three in Harlingen, and then four in Brownsville, and then I have a couple of remote employees. But yeah, I think in the Rio Grande Valley, McAllen is definitely the largest city and the city where there’s more businesses and more economic activity.

Bob : Yeah.

Marcos: So, yeah, there definitely tends to be more bankruptcy cases — I would say — in McAllen. Just so you know, we get the foreclosure notices every month, as probably most bankruptcy attorneys do, and there’s about 400 foreclosures a month — well, 300 to 400 a month — in Hidalgo county. There’s just seems to be a lot more activity in this city.

Bob : Well, I want to follow up on that foreclosure point but I just want to say for the audience and to you that having three offices attract clients from all three cities is a great idea from a marketing perspective, and a lot of the bankruptcy attorneys that I talk to, they do something similar where they have one main office and then maybe they’ll rent a room one day a week from another attorney or maybe they’ll get a small office in a satellite office. Is kind of how you approach it? Do you have a full office and…

Marcos: Yeah. You know, I kind of grew quickly. I think it was unusual. Basically, what happened was, about three years ago when I decided to go solo… Well, first of all, there weren’t a lot of bankruptcy attorneys when I started practicing down here about 10 years ago. Gosh, I would guess, maybe about, six or seven debtors’ counsel. Then, about three years ago when I just decided to go solo, other firms closed down for various reasons.

About a year into my practice, one attorney decided to retire. And so he came to me and we worked out a deal where I took over his existing cases, like his existing Chapter 13 cases, and also hired a couple of his staff. That really doubled my practice in one year, and then the same thing happened the next year. In fact, we ended up taking over three more firms and they were all large firms for our area. So we ended up doubling in size in a couple of years and so I quickly needed more help.

Actually, the reason I wasn’t looking to open up other offices — which I agree with you is definitely a great idea — but it’s sort of… I had to because one of the offices we took over had cases and had clients in Harlingen and Brownsville. So when I ended up taking over these practices, we had to set up shop over there and then I was able to acquire staff that lived in those locations.

But, yeah, I agree. I think once you’ve got your system in place and how you do things… Law, I guess, in general, is pretty easy to scale up. You know, it doesn’t take a lot, just open up another office and put some equipment in there as long as you already have all the software. I don’t know if we’re going to get to this but I’m 40 years old so I’m a relatively young attorney down here, especially as far as bankruptcy goes. And I really love technology so I jump at the chance to use whatever software programs are out there that help. So almost everything we have is cloud-based.

Bob : OK.

Marcos: Email, our calendar system, and in fact, I don’t know if your other people out there are familiar with the bankruptcy software we use, but we use bankruptcy software from LegalPRO.

Bob : OK.

Marcos: I know they’re based in Texas but there is a large percentage of us — and we’re in the southern district of Texas — that use their software. Actually, they have two bankruptcy softwares. The first one was a desktop-based software called BankruptcyPRO and they recently — in fact, this year in the summer — they went live with a cloud-based version called Jubilee. So we’re currently using that, and so we have our cloud-based bankruptcy software. Even our phone system is cloud-based, it’s the Vonage phone system. So, anyway, having everything in the cloud, it was really easy to set up another office and another staff member and get them up and running. It definitely helps.

Bob : You know, you said that you kind of… I don’t know if you hard-acquired or some kind of soft-acquired these other law firms but when you did that, did you kind of move the telephone number so that it points over to your office?

Marcos: Yeah, that’s a great point. So one of my big things — whenever I took over a practice — was to acquire that phone number because a lot of these existing practices, obviously, their phone numbers were out there already. They’ve advertised them, they’re on the Internet. People have their business cards and I think, that’s a really important element for anyone taking over another practice is that phone number is vital. It’s probably where we get a lot of our new clients from or returning clients from that firm. You know, they call back that number, and so I’ve acquired them and what I do is we absorb them into our phone system so all those numbers, when they get called, they get directed to our main line and our receptionist.

Bob : That’s awesome.

Marcos: Yeah, it’s great. It’s kind of funny, sometimes, because unfortunately — for the clients — there’s not so many options down here because there’s not that many bankruptcy attorneys left. So someone may call us but then after they hang up, they’ll shop around, they’ll call another number, and it’ll be us again. They’ll call another number, it’ll be us again. I’ve had that where, maybe, unfortunately, for some people, they can’t get rid of us so they end up with us all the time.

But, yeah, I think that was really important. Yeah, we have some old numbers. One of the firms we acquired, they had acquired the number to a firm before them who had existed for a long time, and I’m surprised at how often people come looking for that old firm. Maybe, some of your listeners might know him; his name is John Ventura. John Ventura, he had a large bankruptcy practice in South Texas spanning Corpus Christi, Brownsville, Harlingen, McAllen, Laredo. It’s a very large area. His number and his name is still out there and people still come looking for him and we have his old phone number still and we, occasionally, get people looking for him.

Bob : Wow. Now, do you also kind of acquire or transfer over the websites? How do you handle the websites?

Marcos: No, we haven’t taken over any websites. I’m trying to think. The first one we took over was a small firm and he actually didn’t even have a website. Two other firms we had, their headquarters were based in like one… Let me think. Actually, I think, they were both San Antonio-based firms and so they, obviously, kept their websites. So, yeah, we didn’t do that. I’m trying to think of that…

What I did do is — with one of the firms — we worked out a deal that we, basically, buy their leads from the Rio Grande Valley so whenever they get calls and they send them over to us, if we were to retain them, we pay for that lead. So we worked out that but we didn’t end up taking over any websites.

Bob : Did you… This is kind of in the weeds but it’s so important that maybe I should highlight it. When you take over the phone numbers, do you add those phone numbers to the appropriate profile on Google Plus for “Google My Business”?

Marcos: You know, right now, we’re only… Let me think about this. We have one main phone number that we use but we also have particular phone numbers that we advertise with, too. I’m trying to think how we did it with Google Plus. When we say Google Plus, you’re also referring to, like, the Google business profile, right? Like when people do a…

Bob : They’ve changed the name so many times. Right now, it’s called Google My Business.

Marcos: OK.

Bob : But a lot of people think of it as their Google Plus profile.

Marcos: Gotcha. OK.

Bob : You have multiple Google Plus profiles, one for each office.

Marcos: Yeah.

Bob : Good job on doing that, by the way.

Marcos: Oh, thank you. Thank you. I don’t do the online stuff myself but I have a local guy I hired to keep all that stuff up-to-date, which, I think, is super important. If I remember correctly, I think we have the same phone number advertised across all three offices on all three Google profiles. But what I did do is, if I had like a main number for another office in a particular city — so let’s say the firm we took over had a Brownsville main line — I was sure to assign that phone number to the receptionist in that office. So if someone were to look for this firm that existed in Brownsville… What happened was that, one of the firms we took over was advertising certain numbers in certain cities like certain main phone numbers in those cities. So I made sure that whenever they call that number, it goes straight to that receptionist in that city.

But, generally, our general advertisement like on our pamphlets — I’m trying to think what else — is this main number. However, we do have — I don’t know what you call it — maybe like alias phone numbers. They’re numbers that end up getting directed to our main receptionist. What we’ll do is, sometimes, we run like Google ads or perhaps if we do like a particular paper ad, we’ll create a new phone number and we’ll use it for that particular ad so we can track those leads.

Bob : Absolutely.

Marcos: Yeah, so sometimes we change it up. But, in general, all the numbers end up going to the same place, generally. When they ring them, our main phone line, it actually rings… Actually, there is like a menu system and they can pick which office they want to talk to.

Bob : Sure, an IVR.

Marcos: Or if they don’t know, it will go to like a general line.

Bob : The reason I mentioned this is that, if you have a phone number… Just to use an analogy. On the web itself, the coin of the realm is a link. If a popular site links to you — particularly, one that’s topically relevant — that’s a powerful vote of confidence that Google kind of trusts. Do you follow what I’m saying?

Marcos: Yes.

Bob : So then, when it comes to the local stuff, the coin of the realm is… The telephone number is an important component. So if there is a lot of references out there and a lot of different White Pages and blog posts and all that stuff to a phone number that goes into your office in Harlingen, well, Google needs to know who should get credit for that phone number. So if you had that phone number, that local phone number, the Harlingen phone number, to the Harlingen Google My Business profile, you’re going to get kind of credit for those popular phone numbers out there.

Marcos: OK. Yeah.

Bob : So this is going to be particularly important for people who are kind of in a more competitive situation. You know, if you’re the number one… If you kind of have a monopoly situation in the Rio Grande Valley, then, you don’t need to do that. But if you want every last inch of advantage, then you might consider adding the local phone numbers to your satellite Google Plus profiles. That’s the only reason I mentioned that.

Marcos: OK. Yeah, that’s great to know. I’ll definitely look into that and I appreciate that.

Bob : So you mentioned something earlier that I wanted to follow up on, which is that you get the foreclosure notices for Hidalgo County in your area. So the natural follow up question is, it sounds like you’re using direct mail to get clients…

Marcos: Correct.

Bob : Can you talk about that a little bit?

Marcos: Yeah. Yeah, I mean. I think, it’s a pretty common practice — at least down here — to do direct mailings to people on the foreclosure list. We actually have someone that generates it. That information is all available online. So we go online and we generate a spreadsheet, and then we use that spreadsheet to generate labels.

I actually switched to postcards but it’s a very general postcard. So since it’s not as private as a closed envelope, it doesn’t say, “You’re facing foreclosure.” It says, “You know, if you need help with debt or bankruptcy may be a viable option. It can also be used to stop foreclosures and other things like that.” So, yeah, we have a postcard. Really, the reason I did the postcard is, well, it’s a bright, attention-grabbing postcard. Also, too, the postage is cheaper. So we probably mail out about 500 to 600 postcards a month. I forgot what the price difference is between postcard and a stamp but it’s maybe like 10 cents or so and it really adds up.

So, we just grab that list and we do those mailings and the return on the mailings is not high. Like I said, there’s about 300 or 400 foreclosures a month at Hidalgo County, and then in Cameron, I think about 200 a month. So we’re looking anywhere from 500 to 600 a month. Honestly, probably, we only get back maybe — I would guess — like six or seven cases from those. I’ve never quite figured out why it’s so low but it’s still worth it, for us, for the cost of the mailings to do that.

Bob: I just want to set you straight here, which is that a one percent response rate on a direct mail package is fantastic.

Marcos: OK.

Bob: And so, you’re kind of thinking… You’re doing the old: “I can’t believe I got a 90 percent on this exam,” when it’s the highest grade in the class.

Marcos: Yeah.

Bob: For direct mail, that’s fantastic, particularly if you’re mailing a list where 10,000 other people are doing it including real estate investors, other bankruptcy attorneys, all kinds of people mail them… Moving companies mail foreclosure lists. So it’s very competitive, so that’s fantastic, particularly if you’re talking about five or six retainers off a 500 or 600 foreclosure notices or mailings. So you’re talking about a one percent buy rate not just the one percent response rate, and that’s fantastic. So, congratulations.

Marcos: Thank you. That really makes you feel better. I appreciate that. I guess it was just that I always wondered why more people don’t try to file Chapter 13 and save a home, and I don’t know… But I suppose, that is a good return rate but I just feel like maybe if people understood how bankruptcy can help them, maybe more would be tempted to file Chapter 13 to save their houses, but I don’t know. Yeah.

Bob: Well, I think, the return here to look at is the return on investment. You’re talking about, let’s say, 500 mailings, 500 postcards even at, let’s say, it’s a full dollar for the postcard — everything, the labor cost of getting the foreclosure notices — that’s high. But let’s say it’s $500 that you’re spending with the postage and everything. You know, if you’re getting five retainers even at $2,000, we’re talking about $10,000 return versus the $500 investment. That’s 20 to 1. That’s sensational.

Marcos: Yeah. Yeah, you’re right. I mean, I definitely agree. It’s worthwhile, and definitely, we’ll continue to do it. Yeah, you’re right, a $500 investment for even a few retainers is a great deal.

Bob: So, one thing I’ve heard about this approach and… You’re right, a lot of people do use it and it does work particularly to kind of create Chapter 13 filings. But one complaint that I’ve heard from attorneys is that the kind of people that are kind of being foreclosed upon, those people may not always complete the Chapter 13 so you end up spending 20 or 30 hours setting up a Chapter 13 and then, maybe the person doesn’t even make a single payment on the payment plan. Is that something that you’ve seen as well?

Marcos: I don’t know how it is in other districts but here, the judges really require our clients to be on a wage order if they are a W-2 employee. And most people here do have W-2 jobs. I don’t have these numbers so I’m not sure what the percentage of success is on Chapter 13 cases, but more than likely, if they’re a W-2 employee, they’re going to survive if they have their job. I can’t think of many instances where we’ve had foreclosures and we file a Chapter 13 and they just didn’t make a single payment. I mean, certainly it happens and that tends to be a problem also with re-filers, people who have filed many times.

Sometimes, with foreclosures, because… The foreclosure notices only come… At least here in Texas, banks are required to send people notices three weeks before the foreclosure. Oftentimes, we’re getting our mailings out maybe two weeks before the foreclosure, so we often get people coming in here a few days prior to foreclosure. Sometimes, we don’t get to do a complete petition and schedules. We have to do a short file, and those tend to be problematic.

It seems that, more often than not, people are highly motivated prior to the foreclosure. But then once you file the case, it’s difficult to get them back in to bring all the documents they need to complete the bankruptcy. And then, those cases have a high likelihood of getting dismissed, maybe not even for lack of payment but for lack of documentation, complete schedules.

So what we try to do — I think it’s a common practice down here — is increase the retainer. If somebody is going to come in the day before foreclosure and have incomplete documents, we’ll probably… Our average retainer’s about $800 but we’ll probably double that. They’re just cutting it really close for us and there’s a high likelihood that that case may not succeed.

Bob: That’s a good point. I was talking to a bankruptcy attorney — a client of mine — last week and he was saying that he’s trying to kind of walk that fine line between… Because on the one hand, you want to reassure someone that’s going through a very tough time that you’re able to help them. Then, on the flip side, you can do such a good job of reassuring them that they don’t take the next step and then you end up having to dismiss a filing, something like that. He said that he’s always kind of trying to figure out how to thread the needle.

Marcos: Yeah.

Bob: Do you have any tips on that front? Besides the retainer, that’s a good one.

Marcos: Yeah. I mean, I definitely want to help people, and it’s not often that we outprice people. It usually won’t be the case where they’re a good person and they’re trying hard and the circumstances for their foreclosure are beyond their control, and then we just turn them away because we want a bigger retainer. That would never happen. I mean, if someone’s going to give it… If someone really needs help, I mean, we’re going to help them and our retainer’s flexible.

I think that high retainer comes into play when if it’s someone who’s maybe not realistic, maybe someone who’s on their fifth bankruptcy and they never made payments in their other cases. So, I think sometimes people see bankruptcy as just a way to buy them time. Not necessarily… They’re not really interested in repaying everything back, they’re just looking to buy time because they think they’re going to have someone buy their house or they’re going to get a loan mod.

I think as bankruptcy attorneys we run into that, people who aren’t realistic. I’ve been doing it for 10 years now so I don’t have a problem with telling people, “Look, this is what I can do for you. Either we’re going to do it right this time, we’re going to put you in bankruptcy, you’re going to be on a wage order.” Or, “Look, your house is too underwater. It’s really not worth saving.”

Yeah, I feel like it is tough love a lot of times and you’ve got people who maybe they’ve invested a lot in their house. They’ve spent a lot on fixing it up or they have children and they live in this house and the last thing you want to think of is moving everyone out and renting something. But I think it’s our job to cut through all those emotional distractions and really look at just a financially sound decision that they’re trying to do.

As you know, oftentimes, bankruptcy, it’s going to be more expensive than what they were paying before because… Again, this might be a different practice than other districts but down here in southern district of Texas, we’re required to do conduit mortgage payments in our Chapter 13 plans. What that means is, if someone’s facing foreclosure and let’s say, hypothetically, their monthly mortgage payment is $1,000 a month, we’ve got to include that $1,000 a month into their 13 plan. Then, on top of that, you’ve got a cure the arrears and then on top of that, you’ve got about $4,000 in attorneys’ fees, and on top of that, you’ve got the trustee percentage, which ours right now is at 7.3 percent.

So it is expensive to save your home, like, to buy that protection. Oftentimes, I’ll tell people, “Look, you’re better off just surrendering the house. Maybe, file a Chapter 7 and renting something that’s going to cost you a lot less and saving that difference for the next five years to get a down payment on another house.” So, yeah, I don’t think — as attorneys — we should feel pressured by people’s situation.

I mean, I think that we know how it works and I love pulling up spreadsheets and doing the math right in front of people. I always do that during a first visit. I mean, I can do it fairly quickly and I’ll show them, like, “This is exactly what it’s going to cost you. Is that worth it?” Yeah, I won’t take a case unless I think it makes sense and they have a good likelihood of success.

Bob: Awesome. A nit-picky question, when you say “wage order”… I’ve heard of “wage garnishment,” is that similar?

Marcos: Oh, yeah, that’s same thing. I guess, we call them “wage orders” because it doesn’t sound as bad as a garnishment. But you’re right, it’s the same thing.

Bob: OK.

Marcos: It’s where it’s an order from the court directing their employer to make the bankruptcy payment.

Bob: I’m sure it’s different on a district by district basis but is that a deterrent, is that an embarrassing for your clients that maybe… part of the reason that they went into bankruptcy is the embarrassment of the employer being called about a garnishment?

Marcos: Yeah, it does come up. I mean, I think especially, like, if someone just started a job, the last thing they want is their employer to be served with a federal order for garnishment. But honestly, it doesn’t become a big deal very often, I think. You know, I really just tell people, “It’s a requirement. If you want to file, if you want to save your house, you’re required to do a wage order.” And if people kind of need reassurances, I tell them that, “Bankruptcy is not uncommon. Chances are someone else in your job has a wage garnishment as well, whether it’s for child support or maybe bankruptcy. It’s not that uncommon that people file.”

But, yeah, it’s not an option in our district. The judges will require it. I guess it’s possible to have it waived but I’ve never seen it done. So it’s a very low likelihood a judge will do it, and certainly the judges won’t let someone waive their garnishment just because they feel embarrassed. I’ve seen people try that in court but the judges don’t really… not that they don’t care but it’s not persuasive.

Really, they do it because there’s a higher likelihood of success if someone’s on a wage order. I definitely think that’s true. So we have to increase people’s chances of success. Otherwise, they end up throwing away a lot of money anyway, right?

Bob: Yeah. No, absolutely. I told you this before we started recording… I mentioned that every lawyer, every bankruptcy attorney I’ve spoken to has one kind of amazing marketing strategy that’s really worked for them and they often don’t realize that it’s amazing, that they have this amazing strategy, right? And you said, “Oh, well, I’m not sure that I have that.”

One of the things that kind of blows my mind as I talk to you is this idea of kind of acquiring other bankruptcy attorneys in your area or at least their phone number and some of their staff. You’re kind of mentioning this in an offhand manner like everyone does it, but let me assure you that this is not commonly done. How did you even get the idea to do that? Because that’s a pretty amazing approach.

Marcos: Yeah. Well, it’s funny. The first time it happened, it was sort of forced upon me and not that I wasn’t happy for it. But yeah, it was an attorney who like a year into my solo practice… I was barely surviving and whatever money I had, I would reinvest it in the business by really, like, hiring help. So I think about a year in, I managed to hire one full-time paralegal and one part-time remote paralegal, so it was just me and two staff. I can’t even remember how many cases I was filing but I’m sure it was maybe like five or 10 a month. It wasn’t much.

Then, about a year in, an attorney who I knew, who was ready to retire and he was looking for someone to take over his practice. I guess there weren’t a lot of options and I was kind of a young guy on the block and so we talked about how it could work. I don’t mind sharing it. I don’t think our agreement was… It wasn’t confidential, but basically we just split up his trustee check. I imagine everyone gets like a trustee check from all their Chapter 13s. So we just worked out an agreement to split that.

Really, I was just looking for enough to pay the staff that I had to hire to acquire his cases, right? So, I think, I ended up… I could only afford one of his paralegals so I hired — he had two at the time — I hired one. I worked out a deal to get enough of his trustee check to pay her and just figuring that I would build up my trustee check over time gradually. My hope was that I would build up my trustee check enough that I could afford her once his trustee check ran out, which only lasted about a year, I think.

Bob: OK.

Marcos: Anyway, but it was really his desire to find someone to take over his practice so he could retire and that forced it upon me. He ended up coming over to my office with his truck and moving my stuff over to his office. Then, I just took over his lease, took over his… I ended up getting the electricity bill in my name. Then, we did this “motion to substitute” into all his existing cases. So I just ended up with another staff member and a lot more cases and went from there.

Then, what happened was another large firm ended up closing because their bankruptcy attorney became our bankruptcy judge. We only have one full-time bankruptcy judge for the entire, well, for our division and our county and then the neighboring county, Cameron County, which is Brownsville and Harlingen. He was appointed the new bankruptcy judge so they had to close their practice.

In that case, I knew they had a large practice, they had a lot of cases. So I went directly to the owner — who I had met before — and expressed interest in taking over the cases. I think I just happened to be the first one that approached him. And then, we worked out a similar deal where in that case, I think I took two of his paralegal, which was all I could afford at the time, and then cut his trustee check to pay them. And then, boom, I doubled again. And then it happened two more times since. I can’t remember… I know one of them I approached, and then one of them approached me. I think I just happened to be with the guy, and really, I grew enough that I was able to absorb new cases and I think, probably, when other firms were looking to get out, there was nowhere else to turn so they came to me. I know I couldn’t have done that without just being in the right place at the right time, I think.

Bob: Yeah. I’m not going to let you entirely dismiss this as good fortune because I’ve seen other people do this with other strategies. I call this the “carry an umbrella on the golf course” strategy, which is, the first time it happens, yes, that’s good fortune. You get hit by lightning but then, if it happens again, that’s because you’re on the golf course with a metal umbrella sitting under a tree trying to get hit by lightning and so it sounds like that’s exactly what happens. So, good job there.

Marcos: Yeah, yeah, well, thank you. You know, it’s a small bar community down here and you’re right, I think I happened to be in it where people got to know me and knew who I was and trusted I was a reliable person that their clients would be in good hands and their staff. I think we all… Our staff become family, we work with them so much, and you want them in good hands. And, I think I’ve always made it a point to have a firm that was a good place to be and, like, hopefully, people were better off here than they were before. I think all that was important and maybe all that might play a small part.

Bob: You know, this happened to another bankruptcy attorney I know. Something similar happened. When I say, “something similar,” I just mean, like, a major life event occurred to kind of a competing attorney in the bankruptcy bar. In this case, it was a heart attack, a second heart attack, which is terrible but if you are going to consider trying this strategy, you always almost put yourself in their shoes, which is you’re at home or in the hospital recovering. What’s going to happen to your clients? What’s going to happen to your staff and you have to remember you can actually help in that situation. It sounds like you have to kind of look past the fear of looking like an ambulance chaser, and…

Marcos: Yeah, I know. I agree. You know, the problem — not the problem… But the issue with bankruptcy Chapter 13 is that you have clients for five years so you do have to time your exit strategy correctly and have a backup. You never know what’s going to happen to any of us. But yeah, if you’re… I always saw it as…

When someone who was looking to close down a practice, I mean, in a way, like, I was helping them out because they had to find someone to substitute and to finish off these cases and close them out. I had some firms, like I said, they were headquartered in San Antonio and they would have had to bring someone down and there weren’t really other local bankruptcy attorneys they could have just hired to work for them. Pretty much all the attorneys here had their own practices, so they had to find someone that would substitute in and work out something.

So, yeah, I think it worked. It definitely helped me grow my practice, but it definitely helped them get rid of all that responsibility and find an exit. So, yeah, it works both ways.

Bob: Well, congrats on the win-win.

Marcos: Well, thank you. I appreciate that.

Bob: I write down questions before every interview… I don’t think I asked you explicitly. Do you speak Spanish, as well?

Marcos: My Spanish is not great since I grew up in San Antonio and I did not grow up speaking Spanish. I picked up a little here and there and I joke when we say I speak at, like, a third grade level but that’s probably true. Luckily, pretty much all of our paralegals are bilingual, most of them having been born and raised down here. It’s funny because almost all the attorneys are not. I think all the attorneys speak some Spanish but we’re not completely fluent. So, we do rely heavily on our staff to translate.

But to practice down here, you definitely have to be a little bit familiar with Spanish because almost, probably, I think maybe about a quarter of our clients are only Spanish speakers. So, yeah, it happens often. Often in court, we have to bring our own translator, which is our staff members, usually. You know, 341s with the trustees will… actually, they call a translation company that appears by speaker and they translate. So, yeah, it’s something that happens very often down here.

Bob: I’d like to understand your sales funnel on a very high level. When someone calls… what’s the next step after someone calls? Do you bring them to meet your paralegal, fill out a form? How does that work?

Marcos: Yeah. When people call, we try to set them up with a first consultation. Most of the time, that’s what happens. We prioritize the consultations with the attorneys. I love doing consultations. Really, it’s better for clients, I think, to have a first consultation with an attorney. But sometimes, we don’t have the time and so they’ll meet with the paralegal first, sometimes.

I think we might all do our consultations differently, but the way I do them is, I have a spreadsheet that I’ve created that has three tabs. One tab is a list of all the debts, and the second tab is the budget, income and expenses, and then the third tab are list of assets. And so, what I do is, I can quickly — in that spreadsheet — enter in all their debts and all their information. I guess I’m a visual person. I’m not really good at just listening to someone and figuring out what they need. I really like seeing the numbers and I can do the math and I can determine whether what type of bankruptcy will help them and what the cost is. I love doing that.

And then, what I do is, I also have a checklist — like a one-page checklist — of all the documents they need to bring in and the cost of the retainer. So, before they leave with me… Usually, I can do that consultation in 30 minutes to an hour, depending on how complicated it is and I want them to leave knowing, “All right, how much is this going to cost me, like, attorney fee-wise but also, if I’m going to be a Chapter 13, how much is that going to cost me?” So, I want it to be very black and white. “This is what it’s going to cost and this is what you need to do.” And so, yeah, that’s how I do my consultations.

And then, when they come back for — we call it — a return visit and hopefully, they come back with that checklist, with the retainer and with all the documents. And that’s always with the paralegal. The paralegal will… We keep everything in the cloud so we scan in all their documents. We don’t keep any originals. We give it right back to them.

And then, it takes maybe a day or two for us to input everything into our software and then we’ll bring them back a third time to review and to sign. And then, we usually file then. So, that’s how that works.

Bob: So you don’t actually have them fill out a form, you just have them bring in the documents?

Marcos: Yeah. You know, I’m not a big fan of forms. Our software company does provide a worksheet and it’s like a monstrous 40, 50-page thing. But I don’t know, I just find that when I give those to people, they’re just not really interested in filling it out. And I really like talking to them about it and, like, picking their brain and trying to get more information out of it.

I think some of my staff members do use that worksheet, but I guess I don’t like it because I don’t like filling out forms either. So I’d rather have a conversation and dig in a little deeper into some of those questions because a lot of these questions on the worksheet, they may not really understand them. And what’s obvious to us isn’t really obvious to them. So I don’t rely… Or I don’t require our staff to use them. I don’t use them, specifically.

Bob: That’s really good. I actually haven’t come across that before and that’s a really good idea, just requiring documents and then having your paralegals fill in the documents themselves or filling out the forms themselves kind of to prep into the bankruptcy software.

Marcos: Yeah, yeah. And then, I think our plan is changing and also, we moved to this new software and so things change a lot, too, in bankruptcy. I don’t know… I mean, like I said, we just have that checklist but we don’t have a form that we rely on and our… Jubilee, the cloud-based bankruptcy software, is really detailed so we kind of… When they come back for the return visit and we’re filling out Jubilee, I mean, we’re really asking all the questions in Jubilee. Maybe we just don’t have a current form that matches Jubilee but it’s so detailed that I think it would just take them forever. And I feel like it’s a little bit redundant, too, to send them home to like fill out a form and then come in and also answer all those questions to us. I’d rather just answer them direct.

Bob: How long does that return visit take?

Marcos: We spend a lot of time before we file a case. I think, it could easily take two hours. I think the first visits take an hour. Our returns usually take two hours, if not more. But yeah, we spend a lot of time filling out that information online with them.

Bob: And what if someone comes in — this is a common complaint that I’ve heard — where someone will come in and they won’t have any forms or something like that? Do you send them home?

Marcos: Yeah. I suppose that depends on each staff member how they handle that. But yeah, we won’t file the case unless we have all the documents.

Bob: Of course.

Marcos: If they come in, I probably will sit down with them and gather whatever information we can with whatever they brought us. And obviously, we can pull their credit report, so that alone can take a lot of time. We pull it up on the… like, our software pulls in the credit report directly into our software program.

Bob: Oh, really?

Marcos: Yeah. Yeah. Jubilee and our LegalPRO, I think they work with a couple of credit report vendors. One of them, I believe, is called CIN Legal. And so, yeah, our software program allows us to pull that credit report directly into it. What it does is it allows us to view all the creditors and we can go through them one by one with the client and say, “All right, do you recognize that?” “Oh yes.” OK, and then we can move it into either.

Bob: That’s great.

Marcos: Yeah, it is really great. It saves a lot of time.

Bob: Because it’s a big deal when you have to ask your potential client to go to — I forgot the URL — then pull the free credit report.

Marcos: Yeah.

Bob: What is that called? You said CIN Legal, is it?

Marcos: Yes, C-I-N Legal. If I’m not mistaken, CIN Legal. They provide credit reports and, I think other services, too. I believe they have like a sister company that offers the certificates, credit counseling certificates and all that stuff, and they might even do like a due diligence report.

We only use them to pull the credit report into our system but we also have an account with… Actually, we started with Westlaw. I think we’re switching Lexis to pull due diligence reports. You know, those come in handy, especially on Chapter 7 cases. That will pull all of their assets and businesses and real estate and car titles and all that good stuff. So we’ll do that separately, and in fact, that takes a lot of time, too. We’ll pull the due diligence report and then we’ll print it out and that can be like a 50, 60-page document and we’ll go over it with them because some of that, sometimes, doesn’t really belong to them. It’s just someone with a similar name.

Bob: Sure.

Marcos: So, we’ll go and identify what things belong to them and make sure all that’s included. So, yeah, all that takes time. But yeah, it’s very useful stuff.

Bob: Wow, that’s great. You know, one thing that was really cool is that… I saw online that you said… I’m going to quote you, OK? You said, “I understand what it’s like to go through difficult financial situations, and I know the emotional strain that too much debt can have on a person’s life.”

So that really resonated with me because my own family — I’m your age, basically — my own family had a rough patch in the late 80s, early 90s. I mean, like, we had a lien on the house and we were probably a few paychecks away from bankruptcy at one point, so I personally know how stressful that can be. And that’s one of the reasons that I like working with bankruptcy attorneys. But it sounds like you kind of had that stress personally in your life. Is that something that makes this particularly fulfilling or rewarding?

Marcos: Yeah. No, no, you’re absolutely right and yeah, you picked up on that. My parents had their own business, actually, also in the 80s and 90s, now that you mentioned it. What happened is that they opened up a print shop in San Antonio and — like a lot of small businesses — they struggled just to pay the bills. And they would pay their employees first, and if there was anything left over, they would pay themselves.

And then what happened was they got behind on their 941 taxes because they would pay the staff, first, before paying Uncle Sam. After running — I forgot how long they had it — but after running business for maybe five or 10 years and they ran up a pretty… Well, for us, it was a significant IRS debt. Looking back, I think it was about $30,000 but it took them a long time to pay it off, like, over a decade.

That always stuck with me, like, here my parents are struggling, and even as kids, we would help them out in the office and their dream to be self-employed. And I know they had friends working for them, and to really end up in debt, it really set them back a long time.

And that was really the reason my dad moved down to the Rio Grande Valley. And we ended up living with my mom’s parents. You know, me and my dad lived with my grandparents. Yeah, so, it was a big change in my life, too, getting moved to a totally different town and even though it’s only four hours from San Antonio, it’s a significantly different culture. I didn’t speak any Spanish, and yeah, he had to take some job far away from home and really our family was split apart.

My mom stayed up in San Antonio with my sisters, my three sisters. One of them was finishing high school. And then even later, my dad had found a job in Florida and he ended up moving to Florida. So, we had a split family life for a while and it was really to find the money to make ends meet and to pay back all this IRS debt.

I think back then, it was before offers in compromises and all that, and they didn’t know anything about bankruptcy and maybe looking back, they could have filed Chapter 13 or something like that. But yeah, so it affects me on a personal level when I see people struggling.

And even myself, I left law school with a significant student loan debt which I’m still paying off and so I know how that feels. Personally, I’ve been there as well. You know, there was a period after law school, I didn’t have a job and I was struggling. So I know what it feels like to have enough money barely to put gas in your car, and make really tough decisions on what little you have.

And so, yeah, I don’t take any of that for granted. And I think, a lot of people have that financial stress of living on… paycheck to paycheck and making tough decisions about whether they can go out to eat with their children or buy them clothes or buy them school supplies. It’s a constant thing and… You know, it’s really tough. Yeah, so I’m happy if there’s anything I can do to help people in that situation. It brings me great joy and I’m glad we have this legal remedy for people. And, yeah, oftentimes, people come in embarrassed and afraid and they feel like they’re doing something bad by filing for bankruptcy. So a lot of it is counseling people that it’s not bad and it’s something they should do and whatever they can do to help themselves and their family is the right thing.

And oftentimes, bankruptcy is it.

Bob: Yeah. Have you ever had someone come in with 941 debt?

Marcos: Yeah, yeah, absolutely, we do, it happens a lot. We also do Chapter 11s and oftentimes, those end up being small business Chapter 11 cases. So we deal with that a lot.

Bob: I’m just saying, those 941 cases must be particularly fulfilling for you.

Marcos: Yeah, yeah, definitely. I think a lot of it is not… I know this because we’ve gotten burned by the judge many times, but people maybe don’t understand that the 941 taxes aren’t their money, right? It’s really the government’s money. I think people feel like it’s their money and they spend it and they always think that they’ll earn enough to pay that debt to the IRS back later. But I think it’s really vital that businesses and individuals with small businesses set up like a payroll system where that money is deducted from their account every time they run payroll.

Bob: Yeah.

Marcos: Yeah, I think that’s what happened to my parents and we see that a lot, people, they don’t have good systems in place to run their businesses. I think going back to my love for technology, there’s a lot of great online payroll companies out there that I use personally, like the one I use, I’ll plug it. It’s called Gusto. Yeah, gusto.com.

Bob: Yeah, I know Gusto. They used to be Zen Payroll…

Marcos: Yeah. I’ve been with them for years and I love them and I’m sure there’s other great ones out there, too, but I think, there’s no excuse in this day and age not to have something like that in place, because it’s not very expensive and it saves a lot of headache and it saves time. You know, they fill out all the paperwork, all the 941s and 1099s and W-2s and all that stuff. So I really…

I think part of bankruptcy is finding people who have errors in the way they’ve been handling their finances and correcting those errors and making sure that’s in place before we can fix the debt problem. So yeah, I see people with those issues and I definitely want them to fix it and be successful and move on.

Bob: I just thought it was really cool because… that you were talking about the effect of debt on your own personal life, because there’s so much shame associated with difficult financial situations, and I know I felt that. My dad started a company and it was kind of 7th through 9th grade for me, and that company failed. It was a terrible situation. I mean, he guaranteed an SBA loan, this whole thing. But the first step, at least, is for people to kind of talk about it. And so, I thought that was really cool.

Marcos: Yeah. Yeah, that’s interesting.

Bob: OK. Well, awesome. This is a great, great note to end on. Marcos, thank you so much for joining us today.

Marcos: Yeah. Well, I appreciate it, Bob. And like I said, this is my first podcast and I really appreciate you calling me up and having me on. I hope it was useful for some people and I look forward to listening to your other podcasts.

Bob: OK, awesome. Thank you so much.

Marcos: Yeah, thanks. OK, bye bye.