Chapter 7 and 13 Bankruptcy Blog

The first Chapter 7 Bankruptcy Petition Training Class began on July 5, 2010. The first class consisted of eight students; four attorneys and four non-attorneys.  I asked the students if the online class was different compared to purchasing the training videos.  Three comments I received were:

The online class is much different from the videos.  You provide different information in the online class so I would recommend someone purchase both for well-rounded training.

I really prefer the online class because I can ask questions directly to the instructor and get an immediate answer.  I also like the personal touch because a video is a recording and the online classes are LIVE.

I like the videos because I can watch the lessons over and over again; however, the online class does provide an advantage in the fact that different information is covered compared to the training videos.

The Cost Saving Advantage to Online Classes

The biggest advantage to attending online classes is the cost savings.  For example, to attend a one day seminar you could invest as much as $2,000 for airfare, hotel and meals; let alone the time spent away from work.  But by attending online classes you CAN SAVE 90%. The Chapter 7 class is only $275 and the Chapter 13 is $150.  Plus, you attend online and have absolutely no overhead costs.

I noticed this benefit immediately during the development of the Chapter 7 Bankruptcy Petition Training Class.  From 2004 until this year I traveled throughout the United States speaking at seminars.  The average overhead cost for me to book a hotel meeting room, rent the audio visual equipment, make copies of manuals and buy food for attendees was about $3,000.  That meant that I needed 10 people to sign up for a $300 seminar just to break even.  Rarely did I ever produce a profit, but I knew the training was necessary for attorneys and virtual bankruptcy assistants, so I continued doing the seminars as long as I broke even; but my business suffered because I was out of town; just like your law firm would suffer if you had to miss work to attend a seminar.

However, now, with the development of the online class, I can conduct a class if only one person signs up.  That’s because instead of paying $3,000 in overhead expenses for a one day seminar, I only pay $7 a month for hosting the website.  My costs are reduced – the costs for the student are reduced; and it is a win/win situation that I am sure more people are going to enjoy.

Why are some people apprehensive about online classes?

One reason people have trouble accepting online courses are that the quality of many of them is extremely poor.  I signed up for a class that had absolutely no live interaction from the instructor.  In fact, she would not even reply to my emails.  I had to actually call the school and complain just to get the instructor to respond.  Also, the materials were only available online, not in a classroom setting; and the materials were very scanty and contained poor content.  The information was only theory and contained nothing that I could actually put to use in my real work life.

These are just a couple of reasons why online schools and classes have a bad reputation and are destroying the reputation for professional schools like MyBankruptcySchool.com.  I hope you give us a chance because the materials we provide are the best in the field and are taught by the developer of the virtual bankruptcy assistant industry.  This is top level training at low prices designed for bankruptcy attorneys just starting a law firm and operating on a tight budget.

Questions from Attorneys Regarding the Online Classes

Q: Why is the Chapter 7 class so long?  Can I jump ahead and take the class in a few days?

A: The online courses that I developed are not intended to dictate to you like grade school.  If you want to download all the handouts and quizzes, never attend a class and complete your training in a few days; that decision is entirely up to you.  I will tell you that you get so much more from attending the live meetings because you learn a great deal from the instructor.  But whether you attend or not is your decision.

Q: What materials do I receive once I enroll in the course?

A: Prior to the first day of the course you will be emailed a username and password so you can have access to My Bankruptcy School online.  A video showing you a visual tour around the interface is provided at:  http://www.youtube.com/watch?v=Uc-598gBlxQ

Once logged into MyBankruptcySchool.com you will have access to:  (1) extensive handout materials; (2) quizzes to check your progress; (3) audios of previously recorded classes; plus (4) all the other features of the interface.

Q: What other topics do you cover in the course that are not listed on the website?

A: Every class is very intense and contains a great deal of information.  However, every class is different because the topics are structured around the needs of the particular students in that class.  However, some popular topics I cover to help attorneys are: (1) how to set up electronic files; (2) how to incorporate marketing techniques into your operational procedures to produce long term results; (3) client intake interview tips; and (4) social media for marketing.

Do you have any other questions?

Fill out the contact form at: http://www.coloradobankruptcytraining.com/contact-us

What classes are available?

Chapter 7 and Chapter 13 Classes are available at: http://www.bankruptcytrainingproducts.com/home/web-and-teleconference-training

How do I find the My Bankruptcy School website? http://www.mybankruptcyschool.com

Sample Bankruptcy Games

Bankruptcy Terminology Game http://www.quia.com/cc/1983817.html

Bankruptcy Hangman Game http://www.quia.com/hm/665546.html

The following questions were submitted by bankruptcy attorneys during the past week. The answers are provided by Victoria Ring who is not an attorney.  Therefore, the information provided in this material is for training purposes only and no whole or part should be conceived as legal advice.

DEAR VICTORIA

I am a new attorney doing my first bankruptcy petition where I am proposing a cram down.  The appraised value of my clients home is $185,000.  They owe $170,000 on the first mortgage and $45,000 on the second.  How can I do a cram down?

ANSWER

You cannot do a cram down.  A cram down is when the house is worth LESS than the amount that is owed.  The amount that is owed is crammed down to the appraised value.  In your clients case, the opposite is true.

Perhaps it will help you to understand the concept better if you think of it this way:

If the house had to be sold and it sold for $185,000; there would be plenty enough money to pay off the first mortgage of $170,000. In fact, you would have $15,000 left over after the sale and the pay off.  Therefore, a cram down is impossible to do since there is nothing to cram down.

However, on the second mortgage, you may be able to propose a reduction since there is only $15,000 left.  Instead of the client paying $45,000, they may only need to pay $15,000 on the second mortgage.  The remaining $30,000 from the second mortgage is actually unsecured equity.

But let us not forget the exemption allowance provided for by your state.  If the exemption allowance is $50,000 the figures change for both mortgage companies.  Therefore, I would need to review Schedule A of your clients petition in order to determine the different strategies available in this particular case.

DEAR VICTORIA

How can I find the IRS Guidelines so I can accurately calculate Schedule J of the bankruptcy petition?

ANSWER

The main page of links I put together to help you when preparing bankruptcy petitions is at: http://www.bankruptcylinks.info/about/prepare-petitions

The links to the IRS guidelines are at: http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm http://www.irs.gov/businesses/small/article/0,,id=104627,00.html http://www.irs.gov/businesses/small/article/0,,id=104696,00.html http://www.justice.gov/ust/eo/bapcpa/20061001/bci_data/median_income_table.htm http://www.irs.gov/businesses/small/article/0,,id=104623,00.html

Keep in mind that the government wants you to think outside the box.  Many of the guidelines are lumped into categories that are not consistent with Schedule J.

The only purpose in reviewing the IRS guidelines and comparing them to the Schedule J figures the clients provide is to make sure the figures are accurate.  For example, gasoline prices fluctuate from week to week.  If the clients tell you they spend $200 a month on gas this month and the IRS guidelines allow them $800; it is an indication that the client may have provided you with a wrong figure and you should ask them to provide a more accurate one.

Why is this important? Because if you give your clients a Chapter 13 Plan payment they cannot afford, they will be unable to stay in the Chapter 13.  This escalates costs as well as other problems for attorneys, clients and the bankruptcy court.

However, this is not a skill that you learn preparing one bankruptcy petition.  This is why I incorporate the training of this skill when I train attorneys.  Believe me, I did not learn the skill overnight myself.

DEAR VICTORIA

The liquidation analysis says that the unsecured debts get nothing but I am not sure how to adjust for that since the plan wants to automatically pay them. Do I use: not in plan, for each to stop the computation?

ANSWER

Unsecured debts should NEVER be removed from a Chapter 13 Plan.  That is one of the main purposes of filing a Chapter 13 in the first place.  The solution is not to trick the software into not calculating unsecured debts.  The solution is to fix what you did wrong and make sure that the unsecured creditors are paid a minimum percentage.  The minimum percentage varies from state to state.  In California, attorneys can have as low as a 2% Plan but in Ohio they never allowed any Plan less than 10%.  As an attorney, you need to call the Chapter 13 Trustee’s office or consult with an experienced attorney in your area to find out the minimum Plan percentage accepted in your state.

DEAR VICTORIA

When you switch from a Chapter 7 to a 13, why does the dialog box come up in the software asking if you want to change your answer on funds available to the unsecured creditors? Are you supposed to have funds in a 13 and not for a 7?

ANSWER

I assume you are referring to the Voluntary Petition.  There are two checkboxes on this form with the following two choices:

Box 1: YES.  Debtor estimates that funds will be available for distribution to unsecured creditors. Box 2: NO. Debtor estimates that, after any exempt property is executed and administrative expenses paid, there will be no funds available to unsecured creditors.

Yes, your assumption is correct.  If there are no funds available to pay unsecured creditors, the debtor is filing a Chapter 7.  One of the requirements to file a Chapter 13 is that there is money left over to pay unsecured creditors.  Besides, if there is no money left over, how could the debtor be filing a Chapter 13 anyway?  They would have no Plan payment to make if they have no money left.  This is a Chapter 7.

DEAR VICTORIA

Where, if anywhere, are there widely accepted interest rates for the secured debt published?  Is this an area where there are lots of disputes?

ANSWER

I called an attorney in California to get a good answer for this question.  The attorney told me this: The interest rate currently paid by the debtor should be used on secure debts unless it is excessive.  To have figures to compare she suggested you find out the average percentage people with good credit pay to purchase a new home (or other asset) in your area.  Suppose you find out this percentage is 2% but the clients are paying 27%.  This is excessive; and in bankruptcy, you may consider proposing the 2% instead of 27% and hopefully there will be no objection from the mortgage company.

DEAR VICTORIA

With all the information you know about bankruptcy and law firm operations, do you plan to publish a book?

ANSWER Yes.  Two attorneys in Georgia (J. Jeffrey Williams and Patricia Lyda Williams) and myself are putting together the materials now.  The name of the book will be: What They Did Not Teach You in Law School About Chapter 7 and Chapter 13 Bankruptcy.  We hope the book will be ready for sale within 90 days.

DEAR VICTORIA

I am a California attorney. If I attend your web training seminar how many MCLE credits do I receive?

ANSWER

The MCLE credits permitted by the State of California are only for seminars that you physically attend. MCLE credits are not provided for the web training seminars I develop and offer to help your law firm.  Besides, the purpose of the web training seminars Michael and I provide is to teach you skills that will improve your bottom line and help you to have a well run and organized law firm.  If we have to force attorneys to attend our seminars through the lure of giving them credits, I really do not think those attorneys would appreciate the training they receive.

IN THE MEANTIME

If you are a new bankruptcy attorney, spend 1 hour with me online and I guarantee I can help solve many problems with your petitions that you are encountering. The cost is only $100 for a full hour and we meet via a web meeting. This means that you will login to the internet and be able to view my computer screen.  This way, I can provide you with visual training, which has more impact than talking solely on the telephone.

Call 719-465-2442 or email victoriaring@coloradobankruptcytraining.com to schedule your training.

ATTEND THE CRAM DOWN WEB SEMINAR

Check us out for only a $25.00 investment. Attend the June 5, 2010 Bankruptcy Cram Down Web Training Seminar.  Sign up at: http://www.coloradobankruptcytraining.com/newsite/contact-us/bankruptcy-web-training

If you have any questions you would like answered in this forum, send them by email to victoriaring@coloradobankruptcytraining.com Your name or contact information will never be used unless you specifically request it.  And if I do not know the answer, I will ask an attorney and get an answer for you.

Have a wonderful week.

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

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

I just returned from the Bankruptcy Training and Marketing Seminar, held at the Best Western Airport East Hotel in Hapeville, Georgia; a suburb of Atlanta.  Eight people (including two attorneys) attended the Marketing Seminar portion on April 23 and Nineteen people (including five attorneys) attended the Training Seminar portion on April 24.

April 23 – Marketing Portion

Due to the small number in attendance, the eight people received more hands-on training compared to larger seminars we have had in the past.  In fact, I personally prefer working with a smaller group when I teach marketing because I can individually address specific concerns and give precise direction so that the attendee can go home and put ideas into action immediately.

One of the main points I always make in my marketing seminars is to teach people to wake up every morning and say: What can I do to make money today?  Instead, many people begin their virtual business day with negative comments, like:  I do not feel confident. I am afraid to advertise. It is too soon for me to make a website, etc.  I found out a long time ago that the ONLY way to be successful is to think thoughts that will make you successful.  If you begin each day by asking yourself, What can I do to make money today? … you will find that you begin looking for ways to make money.  This line of thinking will make you successful.  The other line of thinking will make you unsuccessful.

Clay Holland also spoke at the Marketing portion of the seminar.  He explained, step-by-step, everything he did to become a successful virtual bankruptcy assistant.  Clay is excellent at relating to other virtual bankruptcy assistants (VBA) because he had absolutely no prior legal experience before he became a VBA.  I, on the other hand, was trained in the law firms and received my training from attorneys, judges and trustees.  This is why Clay can relate much better to the VBAs and he is doing a tremendous job managing 713Training.

At the Marketing seminar, two attorneys flew in from Chicago, Illinois. These attorneys had been very successful at building their law firm in a market saturated by bankruptcy attorneys.  They contributed a great deal to the marketing round table discussion and everyone learned from their knowledge also.  This is one reason I always try to conduct the training seminars in an informal type of format.

Throughout my legal career, meetings became second nature for me.  Some meetings would be boring because only one person would talk.  I do not care how interesting a person is; if one person does all the talking and does not interact with their audience, anything they say becomes boring after awhile.  This is why I pattern all my seminars on interaction.  The result provides attendees with a much better understanding and comprehension versus a long, boring lecture.

April 24 – Bankruptcy

Nineteen people were in attendance for the Bankruptcy portion of the seminar, including five attorneys.  We began the day by having everyone introduce themselves and briefly describe their knowledge of Chapter 7s.  Because I customize every seminar to the needs of the audience, this feedback allows me to address specific topics that will provide the best level of training for those in attendance.  Since everyone in the group already had a basic knowledge of Chapter 7s, I was able to immediately move into training the overall conversion from a Chapter 7 to a Chapter 13 as well as cover cram down and strip down training.

Michael Misenheimer spoke for a few minutes about how the foreclosure process works.  Then he opened the floor for questions.  Pamela Starr provided an insight into the corporate side of her own personal experience and Michael opened the floor for questions and addressed specific issues relating to debtor and creditor bankruptcy; which he has a vast amount of experience in.

Summary

We would love to meet you at a future Bankruptcy Training Seminar. For more information and to view the calendar of upcoming events, visit: http://www.bankruptcyattorneyseminars.com

The first TWO bankruptcy attorney seminars has been scheduled. I just launched a new website which you can review and register for these seminars at:

http://www.bankruptcyattorneyseminars.com/ Thank you for your continued support and faith in my training services. I strive to continue working to provide the much needed education to debtor bankruptcy attorneys nationwide.  I hope to see you at an upcoming seminar.