Bankruptcy Training Articles

Free Training Videos from YouTube

You may be thinking that YouTube is only for viewing videos that are personal in nature.  But one day I wanted to know how to make a form that was fillable in Acrobat software.  I went to Google and typed in the search words: How to make a form in Acrobat.

To my surprise, a YouTube video appeared in the search.  (I am so glad that Google purchased YouTube because videos now show up in the search results.)

The first video I watched had poor audio quality, but along the side were other videos that covered the same topic.  I began clicking on the alternate videos and I discovered an instructor named Jim Healy who made a set of videos that I could learn from.  To view the first video in his series, visit: http://www.youtube.com/watch?v=G3wf5RtVZeM

USE  YOUTUBE  TO LEARN  BASIC  COMPUTER  SKILLS

Do you need to know how to unzip files?  Type in the search words: How to unzip files. Do you need to know how to download PDF files? Type in the search words: How to download PDF files. Do you get frustrated with trying to save email attachments?  Go to YouTube and type in the search words:  How to view email attachments.

Or, perhaps you already know the basics and want to know how to add video to your website. Go to YouTube and type in the search words: How to add video to my website. Or, do you want to know how to design a web page using WordPress?  Type in the search words: How to design a web page in WordPress.

The possibilities are limitless.  And if you type in some search words and do not get the results you like, rephrase your search and try again.  Some people get frustrated when trying to locate information in the search engines and it normally is because they type in the wrong words.  There is no simple way to teach you the correct words to type in a search engine to get the results you want because you are unique and no one understands what you want more than you do.  Keep experimenting with your searches and you will learn how to type in the right search words.  This is the way we all learned: from trial and error.

ADVANTAGES  OF  USING  YOUTUBE

1.  YouTube videos are free. 2.  You can learn skills from a wide variety of different people. 3.  You have the ability to pick and choose the instructor that you learn the best from. 4.  You are exposed to other ideas, tips, tricks and shared knowledge of hands-on users. 5.  You can purchase Camtasia software and make your own training videos to share your knowledge with the world.

Life Lesson:  Remember to always give back what you take for free.

WANT  TO  LEARN EVEN  MORE  SKILLS?

We teach a wide variety of skills in the Chapter 7 and 13 bankruptcy training courses. Find out more or sign up at http://www.mybankruptcyschool.com

What to Do When a Debtor Wants to File a Chapter 7 but the Means Test Qualifies Them for a Chapter 13

— Victoria Ring, Colorado Bankruptcy Training

For those of you just entering the field of debtor bankruptcy, this article will be very helpful to you because it addresses a very common problem that occurs when working with debtors.  The common problem is that debtors want their cake and eat it too. This statement may sound a little harsh but allow me to explain:

I am finding that many new attorneys entering the bankruptcy field do not have the training to screen their clients before sending us the petitions for input.  One of the easiest methods for an attorney to screen their clients is to find out how much equity is in their home before taking the case. During the intake it only takes a minute or two to find out approximately how much the debtors owe on their mortgage.  Then, while the client is still in the office, go to a computer and do a search on www.zillow.com.  Although Zillow is certainly not a court authority by any stretch of the imagination, it will tell you immediately the approximate amount of unexempt equity the debtor may have.

For example: I had a case today for a California debtor who had just divorced. There was $200,000 of equity in the home.  Since the debtor was divorced, he only had to claim $100,000 of this equity.  Under the 704 California exemptions, the debtor was provided with a healthy $75,000, leaving him with $25,000 that was UNEXEMPT.  Was the debtor happy about the $75,000 exemption?  Of course not.  The debtor was angry because he wanted to keep the $25,000 plus have all his debts excused.  Although most debtors may not realize it at the time, in reality they are being unfair and asking the attorney to commit fraud by making this selfish demand.

Unfortunately, most of the new bankruptcy attorneys that I work with do not understand the bankruptcy law well enough to properly advise their client.  Instead, they accept the case, have the client fill out the intake forms, pay the fees and send the paperwork to my team.  We input the petition and discover the problem with the equity in the home.  By this time, the attorney has invested his or her time, the debtor has spent several hours gathering information and we have worked inputting the case.  When we discover this problem we alert the attorney, the attorney talks to the client and the debtor decides not file bankruptcy.  The attorney is forced to refund some of the money because the attorney did not know how to properly explain the advantages to the debtor of filing a Chapter 13 instead.  In fact, if the attorney had called to discuss this case with me, I could have taught him how to turn this unhappy client from a Chapter 7 to a positive Chapter 13 because I deal with these issues all the time.

For example, this particular debtor had $38,000 in Schedule F debts and $25,000 of unexempt equity in his home.  The debtor did not want to surrender his interest in the property because he wanted to make sure his ex-wife and children had a home to live in.  This is admirable, but the court and creditors look at numbers because they are not emotionally tied to debtors. New attorneys must learn these types of skills so they can help the debtor understand why it may or may not be to their advantage to file bankruptcy at this time.

But for the particular debtor in our scenario, it would have been to his advantage to file a Chapter 13.  First of all, we could have proposed a 100% Plan which would have more than likely protected the $25,000 of unexempt equity.  Secondly, the Chapter 13 would have eliminated $73,000 in interest charges over the 5 year Plan period, the debtor would have paid off his student loan in full as well as the unpaid personal income taxes from 2002.  By presenting these positive factors to the debtor, the attorney may have saved this case and never had to refund money.  Plus the debtor would be happier once he understood the advantages.

(Note:  A key to good marketing is to point out advantages for the client.  If you can show a client how much money you can save them and how, they often will do whatever is necessary to comply with your requests and invest their time and money making it happen.  This is what makes a happy client and this is what generates referrals.)

But in this case, the attorney did not call to discuss the matter with me.  He simply told the client that he would have to pay $25,000 or lose his home.  This naturally scared the debtor to death and he decided not to file. Who can blame him?

It amazes me when things like this happen; and they happen quite frequently.  In fact, it may be shocking to you also.  I hope so, because I want this article to be shocking enough to help to prevent this from happening to you.  Also, please understand that this article is not intended in any manner to provide legal advice.  I am not an attorney and I am not trying to predict what a bankruptcy court to do by writing this article.  I am simply trying to help you understand the concept of fairness so you will know how to better deal with situations exactly like this in the future.

I wish you the best of success and encourage you to continue learning and working hard to protect the debtor; but in a fair and balanced way.

Click here to find out more about our online training classes

New Bankruptcy Web Training Seminars

CHAPTER 7 BANKRUPTCY PETITION TRAINING COURSE Course Length: 30 days

This course is designed to teach attorneys, paralegals and other law office personnel how to prepare a well-detailed Chapter 7 bankruptcy petition. In the process the student will learn a high level of skills that enables them to curtail most (if not all) Deficiency Notices issued by the Trustee after the 341 Meeting is complete.

This course is for both beginners as well as advanced students.  The reason we can provide one class that meets the needs of a wide range of knowledge levels is because the course is structured to teach a higher level of detail than is normally never taught in typical bankruptcy law firms.  This allows those who have been trained in the haphazard, traditional training methods to apply their present knowledge and advance their skills tremendously through the lessons they learn in the Chapter 7 Petition Training Course.

Beginning students who have never been trained in the haphazard, traditional method of preparing a bankruptcy petition will have the advantage of being trained correctly from the beginning.  This will protect students at this knowledge level from many of the common problems that exist in the majority of bankruptcy law firms today; which originated from poor petition training methods.  For a complete course description, visit:

http://www.bankruptcytrainingproducts.com/home/web-and-teleconference-training

CHAPTER 13 BANKRUPTCY PETITION TRAINING COURSE Course Length:  5 days

This course is an advanced course.  Students should have either completed the Chapter 7 Petition Training Course or have six (6) months of working knowledge in preparing Chapter 7 petitions prior to taking this course.  For a complete course description visit:

http://www.bankruptcytrainingproducts.com/home/web-and-teleconference-training

HOW TO TRANSITION YOUR BANKRUPTCY LAW FIRM TO A PAPERLESS OFFICE Course Length:  2 hours

This teleseminar will focus on transforming your law firm to a paperless office. We will explore a wide variety of different operational procedures starting at the initial client intake through the filing of the bankruptcy petition. You will learn insider tricks and techniques used by paralegals working inside the law firm for many years. They have been tried and tested and passed on to you when you attend this class.

OPERATIONAL PROCEDURES AND TIME SAVINGS TECHNIQUES FOR BANKRUPTCY LAW FIRMS Course Length:  2 hours

This teleseminar will focus on operational procedures and time saving techniques specifically for use inside your law firm.  This is also an excellent training course for paralegals and legal assistants if you are not a solo practitioner.  BONUS:  Designing and maintaining your own law firm website using WordPress.

Get more information and register for courses at: http://www.bankruptcytrainingproducts.com/home/web-and-teleconference-training

A Quick Bankruptcy Petition Tip

If you have worked in bankruptcy longer than 1 minute, I am sure you know that one of the most time-consuming tasks in preparing a bankruptcy petition is waiting for the client to provide you with the information you need.

ATTORNEYS DEAL WITH THIS PROBLEM IN A NUMBER OF WAYS:

1.  Some attorneys designate one specific person in the office to follow-up with clients and make sure the client intake forms are filled out properly as well as gathering all the documentation BEFORE the petition even begins the input cycle.

2.  Some attorneys will enter in the data they have.  Then, as new information comes in from the debtor, they add to the information in the bankruptcy software until the petition is completed and ready to file.

3.  Some attorneys bring the clients into the office and does a live client intake interview to speed up the process.  In the interview the debtor is made to answer all the questions on the forms and sent home with a list of documents they need to bring back to the office before their petition is filed.

4.  Some attorneys just put everything in a file and do not do anything until the debtor pays their entire attorney fee in full.

MY SOLUTION:

After preparing and working with literally thousands of bankruptcy petitions, the method that works for me is NOT to enter the data into a Schedule until you have all the information you need for that particular Schedule.

For example, the average debtor does not enjoy filling out debt sheets.  They want the law firm to pull a credit report and gather their own information, rather than caring enough to take responsibility and do the job right. (Note:  A credit report is a tool. It should never be used solely to prepare Schedule F.) Therefore, before I prepare Schedule F of the bankruptcy petition, I look through the debt sheets the debtors provided.  If the debt sheets are not at least 80% complete, I do not enter anything on Schedule F.  The same holds true for Schedule A.  If the debtors do not have a recent appraisal, know who they pay their mortgage to, provide account numbers, the date the debt was incurred and a balance owed on the mortgage, I do not begin Schedule A.

I have found that by following this procedure, I rarely miss important pieces of data within the bankruptcy petition.  If I enter one piece of info, close the software, find another piece of data, open up the software and enter it, then repeat this process over and over again until one Schedule is complete; errors are much more prominent.  Additionally, the process is much more time-consuming.  If you continually open and close your software program, entering data as it is fed to you, you not only increase your time spent working on the petition but you will greatly decrease efficiency.

DO YOU ENJOY THESE TIPS?

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Bankruptcy Training Video No. 1

A quick lesson in the Means Test, Schedule J and the Chapter 13 Plan.

http://www.youtube.com/watch?v=FoldzGDhV3I

Can Debtors Prioritize Debts in Bankruptcy?

Typical Scenario:

Debtor borrowed money from a friend or relative and has been paying them back on a monthly basis.  When the debtor files bankruptcy, they may or may not list this debt in the intake.

The problems this issue causes:

1.  If the debtor is filing a Chapter 13, the debtor will be using all of their disposable income to make their Chapter 13 Plan payment.  This means there will be no money left over to pay the friend or relative.

2.  If the personal loan is included in the Chapter 13 Plan, the friend or relative will be notified of the bankruptcy like all the other creditors.  The friend or relative will be required to file a Proof of Claim and they will be treated as an unsecured debt if no collateral was required for the loan.

3.  If the debtor qualifies for a Chapter 7, the personal loan from a friend or relative (which is normally unsecured) will be discharged in bankruptcy.  Although not obligated by law to do so, after the bankruptcy is discharged the debtor can make payment arrangements with this creditor or any other creditor to repay discharged debts.

What happens if the debt is not reported?

First of all, it is unlawful for the attorney, non-attorney or debtor to withhold any debt or asset information from being listed on a bankruptcy petition.  Secondly, the debtors sign a document within the bankruptcy petition that states they have accurately reported every debt they owe.

Thirdly, if the bankruptcy case is a Chapter 13, not providing for the debt will not provide any money to pay it.  This is because all disposable income is disbursed to paying the creditors.  If the creditor (friend or relative who loaned the debtor money) is not listed in the petition, there will be no money to pay them.

Can the personal debt be reaffirmed?

If a debt is unsecure, a Reaffirmation Agreement is worthless.  Suppose I borrowed $500 from you and said I would repay you.  What happens if I do not pay?  Unless I gave you an asset that you could repossess, there is nothing you can do except file a lawsuit and hopefully win a judgment, which may or may not be collectable.

Therefore, if the debtors sign a Reaffirmation Agreement on an unsecure debt, but they do not honor their agreement; there is no asset that can be taken.  Signing a Reaffirmation Agreement on the debt owed to the friend or relative will do absolutely nothing to the priority of the debt or help to assure the debt is paid differently from the other debts in the same class.

Can the debtor prioritize the debt?

Absolutely not.  Only the bankruptcy court can make the determination of the priority of debts.  If the debtors want to pay back their friend 100% of the money they loaned them but only offer the credit card companies 25% in the Chapter 13 Plan, do you think the credit card companies may be a little upset?  Of course they would, and the attorney can count on an Objection to the Chapter 13 Plan being filed against them.  This delays confirmation as well as creating more work for the attorney.

But this scenario happens quite often. If this situation happens to you, do not think it is rare.  Every bankruptcy attorney has encountered this same scenario and it much more common than you may think.   In fact, I remember encountering these same problems back in the early 1980s.  It is common for debtors to borrow money from family and friends prior to filing bankruptcy.  Of course most of them feel obligated to pay back the family or friend, which is also morally correct.  However, placing a creditor as priority above another creditor is considered an act of fraud and is never to be offered as an option for the debtor.

Suggestion for attorneys when faced with this situation.

Be honest and tell the debtor what may or may not happen concerning the debt owed to their friend or relative.  As provided for above, treatment of the debt will vary depending on whether the debtor is filing a Chapter 7 or a Chapter 13.

Also, remember to point out the positive points of the Chapter 13 Plan. For the attorneys that I prepare petitions for, I give them a summation that they can share with the debtor.  For example:

1.   2008 Toyota RAV4 crammed down from $28,078.97 to the market value of $16,375.00; thus saving the debtors $11,073.97.

2.   Interest rate on 2008 Toyota RAV4 was reduced from 14.5% to 2.0%.

3.   Due to the reduction in the amount owed on the 2008 Toyota RAV4, the monthly payment was kept the same but the length of the loan was reduced from 59 months to 35 months; thus paying the car off earlier.

4.    The televisions sets were proposed as EXEMPT since they are household items. Therefore, the payment of this debt was removed from the Chapter 13 Plan.  If the creditor does not object, the debtors will NOT have to repay the $4,200.00.

5.  Plan Summary: Monthly payments: $643.00 Length of payments:  60 months Unsecured Plan Percentage: 38%

Do you need assistance with your Chapter 13s?

If you are an attorney seeking attorney-quality work for preparing your Chapter 13 bankruptcy petitions, consider the virtual paralegal services of Victoria Ring and Michael Misenheimer.  For more information visit

http://www.coloradobankruptcytraining.com/petition_preparation.html

Potential Problems for CoSigners and CoDebtors When a Bankruptcy Petition is Filed

As you may be aware, cosigners and codebtors are people (or companies) who are obligated to pay a debt if the client does not pay it.  Therefore, when a client decides to file bankruptcy and that client owes a debt where a cosigner or codebtor is involved, it could potentially cause a major problem to develop.

This is why it is extremely important to obtain precise information about any cosigners or codebtors the client(s) have that are associated with their debts.  And to be certain you (or your attorneys) protects the client(s) in the best way possible, the attorney may need to review the contract that was signed regarding this debt.  You will need to find out:

1.   Was the debt secure or unsecure? 2.   Were the client(s) the primary or secondary client(s) on the contract? 3.   Were any items used for collateral no longer in the possession of the client(s), or that the client(s) are surrendering in the bankruptcy?

After obtaining the answers to each one of these questions the attorney will need to find out if this client qualifies for a Chapter 7 or Chapter 13.  Both Chapters treat debts somewhat differently but you need to verify the facts before the attorney can advise the client(s) properly.

Let me give you an example:  An attorney discussed a case with me that he was working on.  A lady had stopped by the office to ask about a debt she cosigned on a $27,000 credit card with her nephew.  The nephew was filing bankruptcy and he wanted to know how this would affect his aunt who was not filing.

If the nephew files a Chapter 13 and has enough income to pay back his unsecure creditors 100%, this issue could possibly be uneventful.  The debt could be paid in full through the Chapter 13 Plan which is filed with the bankruptcy petition.

However, a problem could occur if the nephew does not have enough money left over to pay the unsecured creditors 100%.  He may only have enough income to propose a 50% Chapter 13 Plan. What will happen to the remaining 50% that will not be paid through the bankruptcy?

One of the more interesting features of Chapter 13 law is something called the COCLIENT(S) STAY.  Set out in Section 1301(a) of the Bankruptcy Code, the CoClient(s) Stay disallows collection action on consumer debt against co-client(s) or the person filing for bankruptcy.

A TYPICAL SCENARIO

A client files a Chapter 13 bankruptcy and includes a debt owed to TV Centers of America for a new television.  The clients mother cosigned the loan for her son.  The clients Chapter 13 protects the mother from collection efforts for as long as the client remains in the Chapter 13 and continues making the payment to the trustee.

However, the obligation of the coclient(s) do not disappear.  If the client repays a consumer debt at 30 cents on the dollar in the Chapter 13, the clients cosigner will be liable for the remaining 70% after the bankruptcy case is discharged.   But, during the time the client(s) are in a Chapter 13, the coclient is protected.   Often in these cases, client(s) will establish special payment CLASSES in their Chapter 13 Plan to pay co-signed debts in full to protect the co-client(s).   In other situations; such as when the cosigner is an exspouse, the co-client(s) may be left exposed.

WOULD YOU LIKE MORE INFORMATION LIKE THIS?

Information like the article above are extremely valuable for attorneys and non-attorneys working in Chapter 7 and Chapter 13 debtor bankruptcy law.  To obtain your 75 page Operations Manual and Initial Intake Forms, visit:

http://www.coloradobankruptcytraining.com/products_intakeform.html