Chapter 7 and 13 Bankruptcy Blog

The first question Victoria Ring receives from many attorneys is: “How can you increase profits for my law firm?” She answers this question by introducing them to the concept of utilizing virtual paralegals.  However, when attorneys learn that virtual paralegals charge a flat fee versus a “per hour” rate, the next question is: “Why can’t I hire someone to work in my office at a lower cost than hiring a virtual paralegal.” The answer follows:

What is the difference between a virtual bankruptcy assistant and a virtual paralegal?

A virtual bankruptcy assistant is an individual who has been trained to prepare bankruptcy petitions for attorneys. The majority has never worked inside a law firm and their experience and knowledge varies from person to person.

A virtual paralegal is a paralegal that has:

** Worked five (5) years or longer inside a law firm ** Obtained a Paralegal Certificate ** Is a member of good standing in their local chapter of the National Association of Paralegals chapter

Hiring an Employee Versus Hiring a Virtual Paralegal

An employee working in your law firm preparing bankruptcy petitions may do part of the work but you (or someone else) will always invest time in verifying and correcting their work; or work on the case in one form or another.  A virtual paralegal is a trained specialist.  You simply have the clients fill out the intake forms and 99% of the remaining work is done for you.  You receive a complete Chapter 7 or 13 petition ready to file along with an Attorney Case Summary that details any potential problems before you approve the case to be filed.  Your time per case is reduced to approximately 4 hours and this includes the 341 Meeting.  Unless the employee you hire is a specialist with many years of experience in bankruptcy, you will not receive the same efficiency from an employee working in your law firm compared to a virtual paralegal.

Example: Your attorney fee is $2,500.  Let’s suppose the virtual paralegal charges $500.  The time you invest in the average case is approximately 4 hours or less, including court appearances.  You profit $500 per hour. virtual paralegal charges are not sharing fees. Instead, virtual paralegals are considered to be outsourcers and are the same as paying a TRAINED PROFESSIONAL to work in your office.  No employee can net you this high of an hourly rate.

What do employees do in the law firm if they are not preparing petitions?

As you know, there are many more duties associated with debtor bankruptcy than the pre-petition workload.  If you have an established law firm, the addition of a qualified virtual paralegal will ease the tremendous workload on your present employees, prevent you from hiring additional employees and allow you time to concentrate on growing your law firm and increasing your profits.

Isn’t bankruptcy petition work simply filling out forms?

A common misconception that some attorneys have is that preparing a bankruptcy petition is simply filling out a set of government forms.  This may have been true in 1942 but this line of thinking is now so far from reality that I invite you to prove it to yourself.

Call up any debtor bankruptcy attorney and ask them how many deficiency notices they receive from the bankruptcy court when a petition is filed.  Also ask them how many Amendments they normally file to correct problems with forms and schedules after they are filed.  Finally, ask them how many Chapter 13 Plans are confirmed without several recommendations by the Trustee.

If you perform this exercise, you will hear many stories of frustration and despair.  However, most of these problems could have been avoided if the petition had been well-detailed, prepared and all the research performed before the petition was filed.

Back in 1999, a very intelligent attorney in Columbus, Ohio encountered this same frustration. He looked for a way to improve the consistency and quality of his bankruptcy petitions; so he tried an experiment.  By taking the bankruptcy petition work out of the law firm, the virtual paralegal was able to work without interruptions, conduct client intake interviews with clients when they were more relaxed at home and the preparation remained consistent throughout the process.

The attorney soon discovered that when he implemented this method, his profits increased, the paperwork was reduced in the office, clients were happier and more cooperative and the amount of phone calls diminished; plus the attorney had time to grow his business.

You should now begin to visualize the difference between utilizing the services of a virtual paralegal versus an employee preparing petitions.  On the surface, it may appear that you are paying more in the beginning but the huge benefits a virtual paralegal will make to your law firm bottom line cannot even be compared to an employee who is simply filling out forms in your office.

What are some additional benefits to hiring a virtual paralegal?

** Attorneys do not pay the standard overhead costs associated with hiring a full time or part-time employee. The virtual paralegal charges one flat fee just like the bankruptcy attorney does for petition work.

** Attorneys do not pay for services until they are satisfied with the quality of work produced by the virtual paralegal. There are no financial risks for the law firm.

** Other law firm personnel are freed up to work on more complex cases. It is a known fact that the typical employee preparing petitions in a law firm is interrupted several times. This makes the information on the bankruptcy petition to not be consistent and precise, resulting in errors, lost time and money.

** Attorneys eliminate their need to train new employees. Most virtual paralegals stay with the same attorney for many years. Not only does this increase efficiency with bankruptcy petitions, but the virtual paralegal gets to know the clients on a more personal level, are able to build a better relationship with the local bankruptcy court and the attorney which helps the attorney to build a more solid and reliable reputation.

** There are no standard overhead expenditures for the attorney (i.e., desk, chair, office supplies, software and employee downtime costs). Virtual paralegals already have established their own home office and use their own software programs because they are independent business owners.

** If the virtual paralegal is within driving distance of the attorney’s office, he or she may provide client intake interview services. By going to the office, meeting the client in person and reviewing the client intake forms they filled out, the virtual paralegal gains more knowledge of the case and can normally reduce the amount of time they spend on each petition. That is why no additional charge is made for an onsite client intake interview since it makes the job easier for the law firm, client and virtual paralegal.

** No office politics. Normally, the majority of time the only contact the attorney will have with the virtual paralegal is by email and telephone. This eliminates staff and employee conflicts which wastes time and costs the average law firm a great deal of money every year.

How to Get Started

Click here to download your free set of Client Intake Forms. Complete, step-by-step instructions are provided in the document you download. This document is in PDF format. If you do not have Adobe Acrobat,  click here and get your free reader

I do not have to tell you about the problems with our economy. If your law firm has not been touched by the current recession, you at least know someone who has.  Now, you have the opportunity to add a much needed bankruptcy service to your current practice in order to assist your current clients in other ways.  And, because of limited funds, you need to be able to do with without spending much money in order to recoupe your investment in less than 30 days.

Believe it or not; this is all very possible.  In fact, my business partner, Victoria Ring, has now set up a total of 127 new bankruptcy law firms across the United States since 2006.  Some of these law firms are provided in the list of Attorney References at: http://www.bankruptcylinks.info/about/attorney-references

SOME IDEAS FOR YOU

There are two different methods for you to consider if you should decide to expand your current law practice into the area of Chapter 7 and 13 bankruptcy law.

Method No.  1:

Enroll in the online school to learn how to set up your law firm, prepare the bankruptcy petition and market or merge your new bankruptcy practice into your current practice. For more information, visit:

http://www.mybankruptcyschool.com

Note: If you decide to enroll, type the COUPON CODE: MCN into the order form and instantly save $50.00 off your enrollment.

Method No. 2:

Hire a Virtual Bankruptcy Assistant (VBA) to perform all the work for you.  For the intake process, your job will be to meet with the clients, have them fill out the Client Intake Forms, gather up their documents and review the petition after it has been prepared by the VBA.  A good VBA can actually make you money.  For example, you charge $2,500 to a client for a Chapter 7 bankruptcy, pay the VBA $400 and earn a profit of $2,100 with only an investment of about three hours of your time.

If you are interested in utilizing this method, consider Kelly Thrasher, CEO of More Clients NOW!. You can contact her by phone at 317-370-5032 or view her online video at:

http://www.moreclients.net

LOOKING FOR MORE IDEAS AND OPTIONS?

We invite you to explore the following links:

http://www.chapter713training.com http://www.chapter7and13bankruptcyblog.com http://www.youtube.com/user/MsVictoriaRing

Have a wonderful week.

— by Victoria Ring

Problem: An attorney graduates from law school with knowledge of the law and how to interpret it; but they never learn the day to day operations of the law firm or how to market their practice.  That task used to be performed by law students, paralegals and legal secretaries. However, in the field of debtor bankruptcy, many attorneys are preparing their own petitions and marketing their own law firms.  In doing so, attorneys eliminate 90% of their overhead expenses and dramatically increase their profits.

But where does an attorney go to learn how to properly prepare a bankruptcy petition? There are many CLE courses for bankruptcy but none of them specifically address the Chapter 7 or 13 petition.  In the past, attorneys and paralegals had to learn either through trial and error (with the court) or by training through someone who had the experience.  But this type of training is not only inconsistent but it does not guarantee professional quality.  And without these two ingredients, the law firm for a bankruptcy attorney will lose profits and eventually collapse.

It is a known fact that if the bankruptcy petition is prepared correctly in the beginning, the entire case will process through the system with less complications. Additionally, potential problems can be addressed before filing; thus saving even more time and money.

REAL LIFE EXAMPLE

A law firm in Maryland was told by several of their attorney friends that preparing the bankruptcy petition paperwork was a piece of cake.  So, when a client came into the office with $4,000 in their hand wanting to file a Chapter 13 because of a foreclosure sale in 2 weeks, they promptly filed an emergency petition to save the home.

Typical example right?

Yes, but this is normally a bad decision.  It is a proven fact that if clients wait until the last minute to save their home, it is going to be extremely difficult and time-consuming to gather all the information needed to properly prepare the petition.  And when an Emergency (or Skeleton) petition is filed, the attorney only has 15 days to get the remaining schedules and Chapter 13 Plan filed.

When they run out of time, many attorneys are then forced to file an extension, which automatically causes the attorney to appear disorganized and unreliable. These negative feelings (that the court may form from this behavior) can have an effect on future cases the attorney may file.  Therefore, it is vitally important for the attorney to learn how to earn brownie-points with the court rather than create negativity from the beginning.

A SUGGESTED METHOD

When I set up new law firms and train new attorneys in paralegal-type operations, I always stress never to file an Emergency petition unless it is absolutely necessary and there are no other alternatives. Besides, when the debtor is aware they are on a deadline to save their home, they are more inclined to get the information the attorney needs to prepare the petition.  However, when an Emergency petition is filed, the client thinks everything is covered and they are not motivated to get the information needed as quickly.

Secondly, new attorneys need to realize that properly preparing a Chapter 7 or Chapter 13 is VERY DETAILED and a great deal of information is required (much like IRS tax returns.)  Without this information, the attorney will normally be filing several amendments to the schedules and a great deal of time will be lost; and time is money.

REFERENCES

If you would like to learn methods to save your bankruptcy law firm a great deal of time and money; and how to increase your profits, contact the author, Victoria Ring at:

http://www.victoria-ring.com Email: victoriaring1958@gmail.com Cell: 719-659-0743

Also, contact Karen Fairchild; a California bankruptcy who recently trained with Victoria. Her contact information is:

http://www.karenfairchild.com Email: karen@karenfairchild.com

Or, enroll in My Bankruptcy School; the first online school specifically designed to train attorneys and their staff in the Chapter 7 and Chapter 13 bankruptcy petition. Visit:

http://www.mybankruptcyschool.com We wish you the best of success.

 

A new line of training videos is currently under development for both Chapter 7 and Chapter 13 bankruptcy petitions. So far, the following new THIRTY-THREE (33) training videos have been developed and are available for immediate viewing: Read the rest of this entry »

– 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

I receive many phone calls and emails from attorneys who ask:

1.  Who can I get to design my web site?

2.  How can I market my website?

Most attorneys still believe they need to pay a web designer thousands of dollars to design their website or spend thousands of hours doing the job themselves.   This scenario naturally would have any attorney afraid to believe they can actually design and control their own website; so they relinquish control to other companies who claim to do the job for them; often resulting in very poor responses from potential clients.

But there is a solution to this dilemma.  Within the past year, WordPress (originally intended to be blogging software) has become a very popular software to build a web site.  And building a website in blogging software also enhances and greatly improves your search engine traffic, resulting in more awareness from your clients than the national law firm directory websites can normally offer.

DO BANKRUPTCY ATTORNEYS NEED TO MARKET THEIR WEBSITE?

If your law firm serves primarily consumers seeking to file Chapter 7 and 13 bankruptcy, you may be wasting advertising dollars if you think you can find clients by solely marketing your website.  Many attorneys have invested thousands of dollars into designing a website, hoping it will bring them a lot of business, only to be extremely disappointed.

Another disappointment is for attorneys who pay web designers to design overly corporate-looking websites with moving Flash elements, convinced by the web designer that this would be the best way to attract new clients.  But unless the web designer has experience working in Chapter 7 and 13 bankruptcy law, they know nothing about who your client is and what attracts them.  So, how can the web designer build you an effective website specifically for your audience?  They cannot.

HOW CAN ATTORNEYS ATTRACT CLIENTS?

First of all, attorneys need to identify with a very important fact they already know:  Attorneys do not need national advertising of their websites.  Instead, a law firm serves the local residents of the state; therefore, your potential clients exist all around you.  There are actually a billion ways for an attorney like you to attract clients in your state and local area; but this article will not focus on this broad issue.  Right now we need to focus on developing a bankruptcy law firm website and marketing it.

Secondly, potential clients do not need to visit a website filled with a lot of bells and whistles and moving animations.  All Chapter 7 and Chapter 13 bankruptcy clients need to know are:

1.  Where your office is located. 2.  Your contact information plus a photo to know who you are. 3.  A list of the documents they need to bring with them to your office. 4.  Some basic information about filing bankruptcy. 5.  How much you charge for filing their bankruptcy petition.

This means that a bankruptcy attorney seeking to find clients in their state or immediate area, normally only needs a five page (or less) website.  A five page website like the one detailed above should not take longer than three or four hours using WordPress.  In fact, if designing websites is not your thing, your daughter, son or other relative may be thrilled to design one for you and save you the time.

Don’t believe you can have a professional website designed in a few hours by a non-professional?  Watch this YouTube video: http://www.youtube.com/watch?v=8355qaOKXC8

But before you get started, below are a few bankruptcy attorney websites you may want to research for ideas:

Cox Law Group, Lynchburg VA http://www.coxlawgroup.com/tutorials/index.html This law firm shows how effective video marketing is.  You can do the same; just sit in front of your computer with a web cam and start talking about your law firm.  Even a two or three minute video is sufficient and it will add a nice personal touch for your clients.  They will feel like they know you before they meet you.  This is an example of excellent PR and you have not spent a penny.

Don’t have time to produce videos right now?  No problem, the US Courts website has done the job for you.  In fact, some attorneys copy these videos onto DVD and use them to educate their clients while they are completing the Client Intake Forms.  Simply visit the link below and embed the video into your website: http://www.youtube.com/watch?v=KU5UDYBAFSQ See a sample of how these videos are used on the front page of this bankruptcy attorneys website: http://www.lloydcohen.com/

Joseph C McDaniel, Phoenix AZ http://www.josephmcdaniel.com/ This bankruptcy attorney has a very nice website designed for consumers.  The movement you see on the front page is the result of Flash programming, which can be expensive if you do not know how to do it for yourself.

Walter Metzen, Detroit MI http://www.detroitbankruptcylawyer.com/ This attorney has a simple looking website with only a few pages; however, if you scroll down to the bottom of the page there is a link for Law Info.  If you click on this link you are taken to the website of Law Info.  Search engines like this normally charge a very high price to design a website and host it for attorneys.  Many of them claim that by hosting on their server the attorney will get more traffic.  Again, an attorney only needs traffic from clients in the state they are licensed in, not the entire United States; which is what most internet marketers base their advertising on.

Carrie Sue Genisio, Kansas City KS http://www.lawinkc.com/serivcesBankruptcy.htm This is a very simple web page.  Notice the link titled:  Getting Ready for Your First Appointment.  Unfortunately the link to:  FORMS, does not work’ which is one reason it is important to always test your website so that you do not lose potential clients.

Marshall Cohen, Columbus OH http://www.columbusbankruptcylaw.com/ This is a website filled with content directed toward the client.  Notice how the attorney never mentions fees on the internet.  Instead, he asks clients to come in so that he can assess their situation.  All attorneys need a low fee and a high fee, depending on the complexity of the bankruptcy case.

Find More Bankruptcy Related Websites: http://chapter7and13bankruptcyblog.com/business-directory Click on the DEBTOR BANKRUPTCY ATTORNEY category

MORE TOOLS TO HELP YOU

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Other Free Bankruptcy Training Videos: http://www.youtube.com/user/MsVictoriaRing