Chapter 7 and 13 Bankruptcy Blog

Have you noticed the ads in newspapers from law firms claiming to file a bankruptcy for only $300 or $200 or even as low as $150? Did you ever wonder how they can charge this low of an amount and still stay in business?  Here are two scams that use these techniques:

Scam 1: Pretending to do a loan modification

A law firm will advertise to do loan modifications for clients. They rent mailing lists of people facing foreclosure and target them with promises of helping to save their home.

Once the client has paid $4,000 or $5,000, the law firm will claim the mortgage company would not accept their offer. The only choice left for the client is to file bankruptcy. Of course the law firm will pretend to give the clients a deal and charge them $300 or less for filing the petition.  But remember, they just received $4,000 or $5,000 for doing nothing.

How do I know this happens? Because I have personally been involved with four law firms who used these tactics. I refused to work for them, but other virtual assistants worked for law firms like this and reported their horror stories to me.

Scam 2: The low price is only for a skeleton filing

Some law firms will advertise low prices for filing bankruptcy because this price is only for filing the Voluntary Petition and Creditor’s Matrix.  This type of filing will stop any legal action against the debtor but they will only have 14 days before they must file the remaining schedules of the petition.

Of course the law firm will charge extra for Schedule A, Schedule B and so forth.  By the time the clients pay for each remaining schedule, they have more money invested compared to paying an honest bankruptcy attorney the full fee in the beginning.

Summary

There are bad attorneys and good attorneys. There are bad doctors and good doctors. There are bad waiters and good waiters. There are bad people and good people.  No one is immune from scams because they exist everywhere.

But the next time you see one of those low-cost ads for filing bankruptcy, perhaps this article will help you shed some light on the possible truth behind the low price.  Also, you can use the information to educate your staff and your clients who may ask you about these ads.

Be sure to pick up your free tools from Chapter 7 and 13 Training.Com at:

http://chapter7and13training.com/ Click on FREE TOOLS along left side of page

– by Victoria Ring, http://www.victoria-ring.com

I recently met a gentleman named Kevin who owned several properties in Pueblo, Colorado.  He presented a lease-to-own option to me on a home that was purchased as a foreclosure. In fact, the property was in such disrepair that the property sold for only $14,000.  However, after Kevin made an investment of only $20,000 to improve the property, the market value increased to $48,000 and was placed in a livable condition.

After the improvements, instead of renting the property, Kevin decided to lease it.  What is the difference between a lease and a rental?  People who lease a property with the intention of purchasing it, normally take better care of the property and often invest money into additional renovations.  On the flip side, renters are known for destroying property and often leave owing the landlord rent.

Lease to own options vary; there is no standard agreement.  The offer Kevin presented to me was to rent the property for 6 months.  Then, if I decided to purchase the property, one-half of the rent I paid would be applied toward the purchase price as well as any renovations I had completed.

But the best part of the deal was knowing that I did not need good credit or a large down payment to qualify.  Since Kevin and his company owned the home, I would be purchasing it from him.  With a positive 6 month rental history I qualified for a 8-percent loan with no jumping through hoops at the standard bank.

These options are very attractive to people who have filed bankruptcy and those who have suffered job losses and have very little money as a downpaymernt to purchase a home.  These options also help to clean up neighborhoods and renovate properties that would have otherwise sat vacant and attract crime; eventually causing the demise of the neighborhood.

Another group that is benefiting from the lease-to-own options are homeowners who are unable to sell their homes.  Instead of letting the home sit vacant while they pay the monthly mortgage payment, the homeowner will enter into a lease-to-own agreement. Some will ask for a substantial amount down to carry the loan while others only ask for the first and last months rent (as in a standard rental.)  And smart real estate agents will suggest these options to their clients in order to alleviate the owner making the mortgage payment and immediately generate them a positive cash flow.

If you would like to know more about the lease-to-own options I urge you to do some research on the internet.  Or, feel free to send me an email at victoriaring1958@gmail.com and I will be happy to share my knowledge or help you in any way I can.  Or, visit my website for business coaching and training options at http://www.victoria-ring.com

Back in the early 1980s, I remember driving to work and sitting in bumper to bumper traffic. I dreamed of the day when the world would be able to work from home like we can today. In fact, not only does the dream exist today, but setting up a virtual office is also VIRTUALLY FREE.

A list I put together to help you is available at: http://www.bankruptcylinks.info/about/free-stuff

Or, contact me directly and I can help you (often over the telephone) at 719-783-3797 or visit http://www.victoria-ring.com

Finally, below are some other excellent tips we received from Lynn Carroll, a virtual legal assistant you can learn more about at: http://www.Carrollegal.com

Hello Victoria Ring,

I recently signed with an estate planning attorney as her virtual assistant.  She is completely sold on the virtual work concept and is moving her office to her home.  She had done some research on virtual office solutions and I thought I’d pass along some information that might be useful to other virtual assistants.

A couple of things we’ve looked at are:

Onebox: http://www.Onebox.com Onebox lets you receive all of your voicemails, faxes and emails in one place, accessible on the internet.  You can set it up so people dial one number and the calls can be forwarded to the phone wherever you happen to be (home, cell, office).  It also has calendar and contacts.

HyperOffice: http://www.HyperOffice.com This website provides a system for calendar, contact and document management.

Solve360:  http://www.Norada.com This is another system for calendar, contact and document management.

My client is going with Solve360 because of the larger storage capacity.  I may set up a HyperOffice account myself to use with other clients.  I would pay for the service and just make sure my rate is high enough that it covers the added costs (in other words, I won’t bill clients separately for the service).

The virtual office solutions allow virtual assistants, virtual bankruptcy assistants and clients to collaborate on documents, create virtual client files, etc.  You can assign your client tasks, your client can assign you tasks, and you can manage projects.  For example, a virtual bankruptcy assistant could set up each client as a project or group and link all of the documents, contacts and to-dos (follow up calls, etc.)  for that client.  When petitions are completed, the virtual bankruptcy assistant could put the file on the shared space so the client could review it.  That way, the file is not going back and forth via email.

Other virtual assistants have mentioned using OfficeZilla  http://www.OfficeZilla.com There is free version and a paid version.  I would be hesitant to use the free one until I found out whether it offered a level of security.

.. published by Victoria Ring http://www.victoria-ring.com

If the video does not automatically appear in the area above, click here: http://www.youtube.com/watch?v=nZKjSRJuIQU

MyBankruptcySchool.Com is the first online school developed for bankruptcy attorneys, paralegals and legal professionals to teach Chapter 7 and 13 bankruptcy petition preparation skills.   This video walks you through the benefits provided to students who enroll in the online courses.

DO YOU ENJOY MY VIDEOS?

If you enjoy my short videos specifically designed for Chapter 7 and Chapter 13 bankruptcy attorneys, you can subscribe to my YouTube channel at: http://www.youtube.com/user/MsVictoriaRing Click on SUBSCRIBE at the top of page

DEAR VICTORIA

I would love to enroll in your Chapter 7 class starting on July 5, but I may not be able to attend all the classes.  Do you give credit for any classes that I miss?

REPLY

Yes, when you enroll, any classes that you miss will be credited to you.  We will assess this on a case-by-case basis, depending on the number of classes you missed compared to the number of classes you were able to attend.  However, regardless of the outcome, you will receive full credit for all the classes when you enroll.

To enroll for the first class beginning on July 5, visit: http://www.bankruptcytrainingproducts.com/home/web-and-teleconference-training DEAR VICTORIA I had a question regarding illegal immigrants. I have a pro bono client that has been using a made up social security number for 10 years. He just informed me that the social is not valid and he is in the country illegally. Under the federal rules there is no explicit law stating that he has to be a citizen however I know at the 341 meeting they will ask for a valid social security card. Any thoughts?

REPLY

An illegal alien cannot file bankruptcy. To be truthful, I would immediately report this person to the authorities.  I personally think what this client is asking of the United States is a total outrage and I encourage you to get him or her out of your life immediately.  People like this do nothing but cause havoc within the system because they have spent years taking advantage of the United States.  This illegal client should have obeyed our laws and got a green card many years ago.

Again, I think this is an outrage and total abuse of the system if this client can even conceive trying to take advantage of our laws simply because he cannot pay his bills.  I doubt he ever paid taxes to the United States because he worked illegally in our country for 10 years and now he wants more?  This is not fair, let alone right!!!

RESPONSE FROM ATTORNEY

Thank you. I completely agree with you. I received the client from a public law center in Orange County that was supposed to prescreen clients. The client gave me his phony social and then called me a week later to inform me that it was made up.  I was not sure if I had a legal obligation to continue to represent him however I actually just spoke to him and informed him that I have to withdraw and that he is committing fraud. It is amazing how long he was able to use a false social for employment and credit. Again thanks for your help.

SUMMARY FROM VICTORIA

Back in the old days when someone went to an attorney to file bankruptcy, they normally needed to file bankruptcy.  It was not a wonderful thing to do.  Most people felt very bad that they had to file.  But today, people look for loop holes in the bankruptcy law so they can take advantage of the system.  This is sad, and it means that honest people need to get wise in order to prevent as much fraud as possible.  If we do not fight for the prevention of fraud, the innocent people will suffer.

One way to prevent fraud is to use the tips in my latest video, which you can view online at: http://www.youtube.com/watch?v=oInwBLMGvKA

DEAR VICTORIA

A little over a decade ago, attorneys were not permitted to advertise.  But today, attorneys have the right to do so.  The problem is that many attorneys have no clue about marketing.  Is this a subject you teach?

REPLY

I incorporate marketing skills training when I set up operational procedures for law firms.  It is my personal belief that marketing needs to be a part of the day-to-day life inside the law firm.  From the person who answers the telephone to the attorney sending an email to the client; all methods of marketing must be implemented in order for them all to work together for the benefit of the law firm.  In this manner, marketing is free or very low-cost.  Personally, I do not think it is a good idea to pay others to market your website.  With all the fraudulent marketing schemes out there; it is more advantageous to do the job yourself and control the entire operation.  This way you can also fine tune your law firm income and adjust methods as necessary.  No hired marketing firm is going to do that or care that much for your law firm.

MONEY-SAVING LINKS TO HELP YOU

Free: Add Your Website to Our Directory http://chapter7and13bankruptcyblog.com/add-your-name

Free and Low-Cost Marketing Links for Attorneys http://www.bankruptcylinks.info/about/marketing-links

Free Stuff to Reduce Your Office Overhead Costs http://www.bankruptcylinks.info/about/marketing-links

Free Ebook: How to Start a New Bankruptcy Practice http://www.coloradobankruptcytraining.com/free-ebook

Free Training Videos – Watch Online Now http://www.youtube.com/user/MsVictoriaRing

Helpful Links When Preparing Bankruptcy Petitions http://www.bankruptcylinks.info/about/prepare-petitions Prequalify Your Debtors with the Initial Intake Form Product http://www.bankruptcytrainingproducts.com/home/initial-intake

If the video does not automatically appear in the area above, click here: http://www.youtube.com/watch?v=oInwBLMGvKA

DO YOU ENJOY MY VIDEOS?

If you enjoy my short videos specifically designed for Chapter 7 and Chapter 13 bankruptcy attorneys, you can subscribe to my YouTube channel at: http://www.youtube.com/user/MsVictoriaRing Click on SUBSCRIBE at the top of page

This is the perfect tool for bankruptcy attorneys to use in developing their own website.  There is no cost or overhead expenses and you control the look, feel and the content.

If the video does not automatically appear in the area above, click here:

http://www.youtube.com/watch?v=Z0kRobByfQs

DO YOU LIKE MY VIDEOS?

If you enjoy my short videos specifically designed for Chapter 7 and Chapter 13 bankruptcy attorneys, you can subscribe to my YouTube channel at: http://www.youtube.com/user/MsVictoriaRing Click on SUBSCRIBE at top of page

Below are some updates I received from various sources that I wanted to pass on to you:

400,000 AMERICANS TO LOSE UNEMPLOYMENT BENEFITS WITHIN THE NEXT TWO WEEKS

According to the Labor Department, about 400,000 people will lose benefits in the next two weeks without action from Congress. The short-term extension was designed to tide over the program while lawmakers debate a $150 billion measure that would extend benefits through the rest of this year.

To read the complete article visit: http://www.businessweek.com/news/2010-03-02/republican-says-compromise-may-end-unemployment-benefits-fight.html

For those of you who enjoy statistical data, the following information published by the American Bankruptcy Institute will enlighten you:

TOTAL BANKRUPTCY FILINGS INCREASE 32 PERCENT IN 2009, APPROACH PRE-BAPCPA LEVELS

Total bankruptcy filings in the United States increased 32 percent in 2009 over calendar year 2008, according to data released today from the Administrative Office of the U.S. Courts (AOUSC). Bankruptcy filings totaled 1,473,675 for the 12-month period ending Dec. 31, 2009, a significant increase over the previous year’s total of 1,117,641. Business bankruptcies increased to 60,837 filings during calendar year 2009, representing a 40 percent increase in filings from the 43,533 filings made during the 12-month period ending Dec. 31, 2008. The 12-month business filing total for 2009 was the highest since the 62,304 filings recorded for the 1993 calendar year. The 1,412,838 consumer filings during the 2009 calendar year represented a 32 percent increase over the 1,074,225 recorded during the same period in 2008. The consumer chapter 7 total of 1,008,870 filings during the 12-month period ending Dec. 31, 2009, represented a 41 percent increase over the 714,389 consumer chapter 7 filings during 2008. The 2009 consumer chapter 7 filings comprised 71 percent of the total consumer filings for the 2008 calendar year, up from 67 percent the previous year.

BE SURE TO ATTEND THE BANKRUPTCY SEMINAR IN ATLANTA

One of the best ways to keep in touch with the world of consumer bankruptcy is to attend the TWO DAY, Chapter 7 and 13 Bankruptcy Seminar, scheduled to be held in Atlanta, Georgia.

For more information and to register, visit: http://www.713training.com/shop/cart.php?m=product_detail&p=120

– a perspective for the Chapter 7 and 13 bankruptcy professional

On February 25, 2010, President Obama proposed a bill that would prohibit foreclosures on home loans unless they have been screened and rejected by the governments Home Affordable Modification Program, also known as HAMP.

At the present time, companies have the ability to proceed with foreclosure actions against homeowners, even though they have registered with HAMP.  However, the proposed changes would prohibit lenders from initiating new foreclosure actions before loan screening by HAMP and would require lenders to halt existing proceedings for borrowers once they are in a trial repayment plan.

DOES THIS INCLUDE ALL HOME LOANS?

No.  Only home loans that are owned by Fannie Mae and Freddie Mac are eligible for this preferential treatment.  However, President Obama has asked the major banks to grant more loans to American citizens since it was all of us who donated the billions of dollars to save the banks less than 2 years ago; but that is a separate story.

HOW DO YOU KNOW IF A HOME LOAN IS OWNED BY FANNIE MAE OR FREDDIE MAC?

At the present time, if a mortgage loan is owned by Fannie Mae or Freddie Mac, the borrower may be eligible for a Home Affordable Refinance to take advantage of lower interest rates.  To find out if a loan is owned by Fannie Mae or Freddie Mac, visit: http://www.makinghomeaffordable.gov/loan_lookup.html

Additional eligibility requirements are provided at: http://www.homeloanlearningcenter.com/files/HAMPEligibilityRequirements.pdf

SUGGESTIONS FOR USE OF THIS INFORMATION WHEN PREPARING BANKRUPTCY PETITIONS

Bookmark the http://www.makinghomeaffordable.gov/loan_lookup.html website.  Make sure you add this to the links you use for online searches.  That way, when you start a new petition where the debtors are homeowners, you should automatically run the property address through both Fannie Mae and Freddie Mac to see if the home loan is owned by these two entities.  If so, alert your attorney to this at once by providing him or her with the Eligibility Requirements document referred to above.

The debtor may be eligible for a loan modification which may prove more advantageous than using the cram down or strip down method.  Because every bankruptcy petition is unique and different, you need to have a wide variety of options and resources available to you so that the attorney can utilize the best and appropriate action that is in the best interest of the debtor.

REFERENCE:

Direct link to Bloomberg news article: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahuuwBS8KYq8