Tuesday, January 27, 2009


A fellow NACBA member has found out something very useful I would like to share with you.

If you want to get out of your cell phone contact with Sprint, you have a short opportunity to do so without paying an early termination fee (ETF).

The way it works is this – when a wireless carrier makes changes to the language in their “Terms of Service” agreement, you have a right to reject it and drop the carrier without an early termination fee. Sprint has just raised their internal administrative fees again - to 0.99¢ per month, from their original fee hike of 0.75¢ in December. The December fee hike opened a window until early January, and the second hike in January opened up a new window until January 31. As a result of this administrative fee increase, anyone who is currently under contract with Sprint can leave the carrier early without paying termination fees. There are only two catches to this deal:

First, you can only cancel the service without getting hammered with an Early Termination Fee if you do it by January 31, 2009 AND, second, VERY IMPORTANT, you need to call Sprint and ask specifically about the rate hike first.

In short, ask about the rate hike first, and then use the rate hike as your reason for canceling service. Make sure you follow Sprint’s instructions on how to cancel properly and follow up in writing to make sure they have done it.

Since it’s only a few days until the end of the month, you've got only a few days left before the window of opportunity closes.

Why the hike? Money problems. Sprint just cut 8,000 jobs, about 15% of its workforce, trying to reduce its costs by $1.2 billion, so they need that extra fifteen cents.

What if you already canceled and got hit with an ETF? Do not despair. Sprint just settled a class action regarding these. If you had a wireless contract with Sprint from July 1999 and December 2008 that contained a time based ETF fee clause and can prove that you were charged an ETF fee, you could get back up to $90. Even if you didn’t cancel, you could get a $35 settlement fee just because you kept the contract for fear of getting hit with an ETF. There are a lot of hoops to jump through, and there are some exceptions and reductions in payouts, but you can start by going to www.sprintetfsettlement.com and registering.

Of course, keep in mind that changing carriers can be like going from the frying pan into the fire and there is no guarantee the replacement carrier will be much better.

Also, I’ve read that since Palm will soon be debuting a new web-based operating system exclusively using Sprint (for a time), canceling now could open up an opportunity to re-sign with Sprint later on in exchange for a free or low cost Palm Pre device.

So, whatever you decide to do, don’t dawdle. Sprint.

Bankruptcy is Hot Again

In the past few weeks, I've received calls from several lawyers looking to get into the bankruptcy practice. Many lawyers left the field when the new law passed in 2005 because there was more work involved in filing cases and because the number of new cases had dropped off - clients thought bankruptcy was dead. However, because of the bad economy, there has been a small uptick in business for bankruptcy lawyers just as other fields of law have seen a decrease. Therefore, lawyers are suddenly getting interested in filing bankruptcies again.

I was interviewed on January 5, 2009 by a reporter from Lawyers USA on this very topic. The article appears on the web at www.allbusiness.com and www.dolanmedia.com. I pointed out that bankruptcy law has become more complex and is really not a field for amateurs or those who wish to only occasionally file a bankruptcy case to supplement their practice. I especially referred to Chapter 13 bankruptcies as "financial brain surgery." I have gotten cases from clients who were told by their previous lawyers that they flunked the means test only to find that the attorneys had only done part one of the means test - the median income test. The test has four parts which gives several chances to file a chapter 7 instead of a chapter 13 case if you know what you are doing. However, some lawyers just look at the median income tables and say, "You're above the median income, you can't file a chapter 7," which is not always true.

I'll be going to Washington, D.C. in February to talk to my senators about supporting the new bankruptcy bill. I'm not really happy that President Obama has chosen to separate the bill from his first financial stimulus package. This hurts the chances of the bill's adoption. I'm not really happy about how the stimulus has been weakened by giving in to Republican interests. I think they prefer President Obama fails even if it cripples the country - that's politics for you. I thought the Democrats won the election - I guess I was wrong. More on that later.

Citigroup has chosen, for now, to back the bankruptcy bill. This could change, just as they changed their mind about buying that new $50 million corporate jet with your bailout money. Maybe the Citi never sleeps, but they sure know how to spend, and charge. They just raised the interest rate on my attorney friend's credit card to between 20% and 29.9%, even though he pays in full each month. Paying in full must make him a bad credit risk.

Moral: Cash is king.