Mid-Week Bankruptcy Case Review – Issue 7

Issue 07 – January 27, 2011


In this issue I am going to discuss a problem with a Chapter 13 client that has happened twice during the past month. Perhaps this article will help so that the same thing does not happen to you.

An attorney (new to the Chapter 13 field) had his clients take the time to fill out the 30 page intake forms, another several hours gathering up all their documentation as well as $3,000 to pay the attorney for representation in a Chapter 13.  However, when we received the paperwork, we found the client only earned $2,000 per month; yet her mortgage payment was $2,700 per month.  It was impossible for this client to pay out more than she earned; which translates into the fact that this client had no money left over to fund a Chapter 13 Plan.

Before writing this article, I spoke with an experienced attorney about this topic.  She said that one possibility could have been to cram down the mortgage to the market value of $218,000, thereby causing a proposed mortgage payment of $800 instead of $2,700.

Unfortunately, the attorney told me that she has only proposed this type of drastic reduction once before and the mortgage company immediately filed an objection.  Since she believed it to be her fault for causing this problem she did not charge the clients any extra money for filing an answer to the objection.  The end result was that this attorney could only reduce the mortgage payment from $2,700 to $1,800; which was still too expensive for the client to pay.  She and her client were still back in the same boat they started out in with a great loss of time and money.

Another option may have been for the client to take in a roommate or family member to live with them and pay the mortgage payment.  However, these types of situations are very shaky because the rental income can be lost overnight and the client is left unable to fund the Chapter 13 Plan and the case is ultimately dismissed.  Again, the attorney and her client would be back in the same boat they started out in with an even greater loss of time and money.

How the Attorney Could Have Saved $250 and a Great Deal of Time

I spent a total of 2 hours working on this case and billed the attorney $250.  However, I developed a PreQualification Screening tool that attorneys can use free of charge and avoid these unnecessary charges altogether.  To try it out visit http://www.bankruptcyintakeonline.com

The PreQualification Screening form is NOT designed for importing into your bankruptcy software.  It is a free tool that can be customized to your law firm needs as well as personalized with your law firm information and even placed on your server.  Try it out now and find out how it will immediately save your law firm money and time.

Disclaimer: This article is written for training purposes only and should not be considered legal advice. The author is not an attorney and has never attended law school. The information in this article is written from the 30+ years of knowledge working as a paralegal in the legal industry and from experiences learned while working under the direction of licensed bankruptcy attorneys throughout the Unites States.


PreQualification Screening Form

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and http://www.bankruptcylinks.info/about/free-supplies

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Complete Bankruptcy Motion Package (over 300+ templates)

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