Chapter 7 and 13 Bankruptcy Blog

My Bankruptcy School was developed from the materials I created after traveling the country from 2004 to 2008.  Back in those days, I kept a suitcase packed at the front door and was leaving to do a seminar or set up a new law firm practice 2 or 3 times per month.  After training hundreds of attorneys, paralegals and virtual assistants, I took these same materials, updated them and developed the first online bankruptcy training school.

My Bankruptcy School is NOT a school that trains the law, but rather a school that trains attorneys, paralegals and virtual assistants how to prepare well-detailed Chapter 7 and 13 bankruptcy petitions.  For training in actual bankruptcy law, I highly recommend you check out the courses developed by Max Gardner at http://www.maxbankruptcybootcamp.com/

My Bankruptcy School has now been updated to provide those on a tight budget with the ability to pay their school tuition in 3 installment payments. This helps you to get enrolled faster so you can learn the skills you need to:

** Reduce the need to amend pages of the petition after filing ** Reduce issues caused from inaccurate data ** Reduce issues with the Trustee at the 341 meeting due to poorly prepared petitions ** Create a better working environment for your law firm ** Provide paralegals and legal assistants with consistent training

To view the new 3 installment payment options, please visit: http://www.mybankruptcyschool.com/enroll_3pay

Victoria Ring Certified Paralegal and Bankruptcy Petition Instructor

Colorado Bankruptcy Training and Virtual Petitions have teamed up to offer bankruptcy attorneys the convenience of a HELPLINE.

THE HELPLINE WORKS LIKE THIS:

At any point during the intake process and even pre or post petition, you or a member of your staff can contact us with any questions regarding Chapter 7s and 13s. This contact can be made by email or telephone; whichever is convenient for you.  We will then do our best to answer the question or assist you in any way to solve the issue.

BONUS:  And during the process, we will train you in a variety of skills so that you eventually never need us.

Sonya and I decided to initiate this service because we are finding that most attorneys open up new bankruptcy practices without any prior knowledge of the intake process. In law school, attorneys are trained in the law, not the process that most paralegals perform.

Within the past month we have had four attorneys ask if they could call us to discuss their cases to gain insight from our combined 37 years of paralegal experience.  And this is why we decided to announce the service to our LinkedIn members to see how popular the service is received.

TO GET STARTED

1.  Email your name, law firm name, address, city, state and zip, telephone and email address to victoriaring1958@gmail.com  PAY NO MONEY UPFRONT.  (We provide the service and bill you after 30 days. There is NO RISK on the attorney’s part whatsoever.)

2.  Next, call or email the HelpLine when you have a case or issue regarding a Chapter 7 or 13 case.  Remember, we are not attorneys and we cannot provide legal advice. But we do have a wealth of knowledge in Chapter 7s and 13s that we enjoy sharing with attorneys so that the law firm prospers and the client receives the best benefits that bankruptcy can offer them. Monday through Friday HelpLine: Morning Shift: Sonya Banks 6:00 am to 12:00 noon PACIFIC time: 770-601-4730 Evening Shift: Victoria Ring, 12:00 noon to 7:00 pm PACIFIC time: 719-465-2442

3.  At the end of the month, we will provide you with a detailed invoice containing the clients’ name with a summary of our discussion.  You are billed at the rate of $125.00 per hour which is about half of what other on-demand support services charge.

If this is a service you do not need, please forward it to a new attorney who may benefit from the HelpLine.  Sonya and I have a passion for the debtor and we enjoy working with attorneys who feel the same way.  We hope to work with you and your staff soon.

Victoria Ring Colorado Bankruptcy Training http://www.coloradobankruptcytraining.com

Issue 04 – November 15, 2010

RE: UNEXEMPT EQUITY IN A CHAPTER 7

When Mary Doe (fictitious name) filed her Chapter 7 bankruptcy petition, the attorney used the Kelly Blue Book TRADE IN value for her car on Schedule B; which was $5,200.  The attorney was not aware that the local Trustee used the PRIVATE PARTY value from the Edmunds website.  The Trustee claimed that by using Edmunds and the Private Party value, he determined the market value of the car to be $7,800 instead of $5,200 and objected to the granting of a discharge until the unexempt equity ($4,500) was paid or the items would be seized and sold by the court.

From the courts point of view, this scenario makes perfect sense. Mary is asking the court and her creditors to forgive her of over $200,000 in debt resulting from a foreclosure and medical bills.  In exchange, she only needs to pay the court $4,500 in unexempt equity.  But from a human point of view this news is devastating because Mary is penniless. After paying her basic living expenses, she has less than $5 in cash to live on.  How can she pay the court $4,500?

Some people may say that Mary should find a job and increase her income; but Mary lost the muscle control in her hips and legs from 18 years of uncontrollable diabetes. She now must use a cane to walk short distances and a wheelchair for longer distances. Therefore, Mary is severely limited in her ability to earn an income outside the home.

In addition, Mary’s car is her only mode of transportation and she has no living relatives or friends that live close enough to provide daily transportation to meet her basic needs. If Mary loses her car, she will be unable to get to the doctor and the grocery store, thereby causing her to eventually become an award of the state as she would be forced on welfare simply to survive.

POSSIBLE SOLUTION NO. 1

The Chapter 7 may be able to be dismissed due to the fact that Mary would be placed in a hardship (much worse than she would have been prior to filing bankruptcy) if the present bankruptcy were to continue.  However, in order to dismiss the case, it would require the filing of a pleading and a court hearing would need to be scheduled in order to render a Judge’s decision on the matter.  Mary may also need to hire an attorney to represent her at the hearing, which she clearly cannot afford.

Note: Debtors are normally prevented from dismissing a Chapter 7 case when unexempt equity is involved, which is different from how unexempt equity is treated in a Chapter 13 filing.

But there is a problem; once the Chapter 7 case would be dismissed, Mary would be back to Square One and still owe her creditors $200,000; therefore, they would begin collection procedures again.  Since Mary has already revealed her car as an asset in the bankruptcy filing, the creditors will know this asset exists and would naturally file a lien against it and take the car anyway.

POSSIBLE SOLUTION NO. 2

Working with the attorney we naturally came to the conclusion that Possible Solution No. 1 was not in the debtor’s best interest.  Eliminating this solution left us with the only possible choice and that was to come to an agreement with the Trustee on the amount of unexempt equity Mary needs to pay back.

To do this, the debtor had to agree as to the true market value of her car.  She visited three different automobile dealers: (1) dealers who sold new and used cars; (2) dealers who only sold used cars; and (3) Buy Here Pay Here car lots.  She obtained a written proposal from each which amounted to $6,400, $6,700 and $6,900 respectively.

The attorney called the Trustee and convinced him to allow the lower $6,400 estimate simply because Mary was penniless and unable to afford to replace her current vehicle.  In doing so, this left Mary with unexempt equity of $3,100.  Due to Mary’s financial condition, the Trustee also agreed to accept monthly payments in the amount of $258.34 so she could keep her car.

Problem:  Although this appears to be a better solution for Mary compared to Possible Solution No. 1, where is Mary going to get the extra $258.34 per month to pay the Trustee?  Besides, if Mary agrees to make these payments, the Trustee will want to know where this extra money was obtained and why it was not included as income on Schedule I when the petition was filed.

Important Lesson:  Many Trustee’s use this approach when a Chapter 7 is filed because they are able to determine if the debtor has lied about their true income. By placing a debtors assets on the line and threatening to take them away, debtors often come up with extra money and then the Trustee can dismiss the case because the debtors committed perjury by misrepresenting their income on Schedule I.

At this point is when a discussion with Mary was necessary in order to resolve the issue.  When I contacted Mary (on behalf of the attorney) she said that her ex-husband offered to make the necessary monthly payment so that she would not lose her only mode of transportation.  Once the Trustee accepted the newly proposed amount of unexempt equity. Mary’s cousin mailed a check for $258.34 to the Trustee every month and satisfied the court’s requirement.

What if …?

What would have happened if Mary told us she would pay the $258.34 to the Trustee each month to keep her car?  Before making a proposal to the Trustee we would need to know where she obtained this additional money and why it was not reported on Schedule I.

If Mary had recently received a raise in salary, we would need to amend Schedule I to report the new income and obtain pay check stubs (which would be used as Exhibits) to verify the increase in salary. If Mary said she rented a room in her home to get the extra money we would need a copy of the rental agreement.

But in Mary’s case, her ex-husband agreed to make the payments because he knew that Mary was penniless and would be on welfare if she lost her car.  In addition, the ex-husband knew he could not buy a reliable replacement vehicle for $3,100.  In this case, the ex-husband wrote a letter to the Trustee stating that he agreed to make the payments and the ex-husband made these payments directly from his personal checking account throughout the payment duration.

Are You An Overworked Bankruptcy Attorney?

We are accepting new attorney clients. Please give me a call at 719-465-2442 to discuss your bankruptcy case needs. I am normally in the office from 10:00 am to 8:00 pm Mountain Standard Time.

Talk to you next week ….

Victoria Ring Colorado Bankruptcy Training http://www.coloradobankruptcytraining.com

Many bankruptcy attorneys that we prepare petitions for are normally apprehensive regarding cram downs and strips downs of mortgages. Although I have written many articles about these topics, one angle I have not covered before is the angle of NOT proposing cram downs or strip downs at all. This is great news for those bankruptcy attorney practicing in states where they encounter problems with the courts when they try to propose cram downs and strip downs to help their debtors. Read the rest of this entry »

Issue 01 – October 20, 2010

This is the first issue of a new publication I plan to publish each week.  The information in this publication is made possible by the Chapter 7 and 13 bankruptcy petition reviews we do for attorneys nationwide.  We felt by sharing this information with other attorneys and law firms, it will help them to pick up specific tips and techniques to help them in their practice.  I hope you enjoy the case review this week that follows.

CRAM AND STRIP DOWNS

Some attorneys make the mistake of assuming that all mortgages are eligible for cram and strip downs.  First, we need to establish the fact that cram and strip downs have not been written into law and it is up to each bankruptcy court as to whether they accept them or not.

But let us suppose that cram and strip downs are permissible in your bankruptcy court.  The next step is to qualify the debtors.  Qualifying the debtors for a cram and strip down on their mortgage could take in a wide range of possible scenarios depending on the situation the debtors are in.  This week we encountered a situation where the debtors were unable to qualify for a cram and strip down so I wanted to share it with you.

THE CASE OF BOB AND SUE

The debtors (let us call them Bob and Sue) had their home appraised for $275,000.  They owed $200,000 on the first mortgage and $150,000 on the second.  The attorney asked us to prepare a Chapter 13 and propose a cram and strip down for the primary residence.

Now although we are paralegals and the final decision is always given to the attorney, we do warn attorneys when possible objections could occur based upon our many years of experience.  The main reason the cram and strip may not work for Bob and Sue is because they have $275,000 of SECURE property.  If the bankruptcy court seized the home and sold it for $275,000, they could completely pay off the first mortgage company and still have $75,000 left over.  This also means that since $75,000 is left over, the second mortgage company would be able to claim that as SECURE also.  The only amount of the mortgage debt that is underwater and UNSECURED is $75,000 of the second mortgage.

We suggested to the attorney to propose paying $275,000 as secure and $75,000 as unsecured, non-priority inside the Chapter 13 Plan.  This still saved Bob and Sue a great deal of money but it was not the $200,000 they had originally anticipated.  (Note: I am still amazed at how people work to push the bankruptcy system in their favor. Many people today appear to not understand what is meant to act in a fair and moral manner; but this is just my personal opinion.)

OTHER REFERENCES

Pre-Qualifying Debtors for a Mortgage Cram Down http://chapter7and13bankruptcyblog.com/archives/710

How Banks are Viewing Cram Downs Proposed in Bankruptcy http://chapter7and13bankruptcyblog.com/archives/18

Mortgage Cram and Strip Down Questions and Answers http://chapter7and13bankruptcyblog.com/archives/24

Recommended Book on Foreclosures from The National Consumer Law Center http://shop.consumerlaw.org/foreclosures.aspx

DO YOU NEED A BANKRUPTCY PETITION REVIEW?

You can save a great deal of money and ensure you have a well-detailed Chapter 7 or 13 bankruptcy petition before filing.  Here is how it works:  You prepare the petition with as much detail as possible. But before filing the petition, email it to us (PDF or Best Case format) and we provide you with a complete petition review.  This review is provided on the telephone and if a visual is needed for training purposes we will provide that at no additional charge. The costs are only $200 for a Chapter 7 and $275 for a Chapter 13.  To schedule your bankruptcy petition review call Victoria Ring at 719-659-0743.

Talk to you next week ….

Victoria Ring My Bankruptcy School http://www.mybankruptcyschool.com

Colorado Bankruptcy Training is pleased to announce the release of the first bankruptcy training videos ever produced to train the skills needed to prepare a well-detailed Schedule B within the bankruptcy petition. As you may know, we just released the Voluntary Petition and Schedule A training videos last week. Read the rest of this entry »

I received an email today from an attorney seeking to network with other attorneys in her area who said: Why should we teach you and have you take business away from us? This is a common problem that many new attorneys face and this short 7 minute video will solve that problem. Read the rest of this entry »

A review of the top three bankruptcy software programs; New Hope, EZFiling and Best Case. This video will help you to choose the best one for you and your law firm and includes a money saving tip near the end. Read the rest of this entry »

If the video does not automatically appear in the area above, click here: http://www.youtube.com/watch?v=Ojn-TWS6aAA

This is an 8-minute excerp from our Means Test training class. This video provides you with great tips and information but it also lets you experience the type of online classes available to you through MyBankruptcySchool.com.

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