Chapter 7 and 13 Bankruptcy Blog

I had two attorneys this week send us bankruptcy cases where they wanted to propose a Cram Down on the FIRST mortgage and a Strip Down of the SECOND because the house was underwater. Unfortunately, both of the bankruptcy clients were not eligible for a cram down. I had to call both attorneys and let them know. They were shocked and were not aware that pre-qualification was necessary to propose a mortgage cram down and strip. This is when I decided to write this article to help other attorneys and their law firms. Read the rest of this entry »

a lesson in client intake interviews and conflicting information

For the three weeks I have been working on one particular bankruptcy case.  Why is it taking so long?  The clients have been very difficult to interview and the husband and wife keep providing conflicting information.  Therefore, I decided to write this article to help you when you face the same problems, if you have not encountered them already.

The petition began like any other normal petition.  I entered the initial data into the bankruptcy software and compiled a list of questions to ask the clients.  When I called the client back I discovered the phone number the attorney provided was her work phone, so I apologized for the interruption and set up an appointment to talk with her after hours when she was at home.

The first problem I encountered was the inability to understand the clients due to their heavy Pilipino accent.  However, I did my best to get the answers to some of the questions.  For other questions, the wife handed the phone to her husband and I tried to communicate with him the best I could.  However, the husband could not understand who I was and was very reluctant to talk with me.  I had no choice at this time but to end the interview, let the attorney know my dilemma and ask him how he wanted me to proceed.

It took approximately 2 weeks before the attorney had the opportunity to talk with the clients and inform them of my role.  I was instructed by the attorney to call the clients and finish the interview.  Hint:  If you are an attorney, you should always let your clients know the names of people who may call them to obtain information.  This way you save a lot of time for your office and staff as well as confusion for your client.

Finally, after leaving voice mails for the clients and eventually getting in touch with them for a second interview, I was able to conduct 80% of the interview in about 2 hours time.  The reason I was unable to complete the interview is detailed in my notes to the attorney which are provided below.  However, the debtor(s) did nothing but hurt themselves by refusing to provide me with the crucial information I needed.  Now the attorney has to spend time getting it before we file the petition.  So eventually, they will have to answer the questions whether they want to or not.

When you encounter situations like this, it does not always mean that the debtor(s) are committing fraud or trying to be fraudulent in their answers.  Instead, some clients are reluctatant to answer questions because they are afraid it could get them in trouble, so they ask you or me to answer the questions for them.

For example: in one part of my conversation with the debtor, I asked him how much his family spent per month in food.  He said they spent $6,000.  You and I both know that this amount is too extreme and overinflated.  The IRS allowance for this family of 4 is only $1,370, so I immediately knew that this would not pass through the bankruptcy court without problems.  I told the debtor that $6,000 was much higher than the IRS allowance and that I needed a more realistic figure.  The debtor told me to make up any number that I needed to.  I told him that if I did, I would be committing unauthorized practice of law.  The debtor needed to provide me with a figure and that figure could not be $6,000.

But instead of trying to be sensible, the debtor became upset and started playing mind games.  He told me to try $5,000; but I told him this was too high.  Next he told me to try $4,500.  This immediately told me he was playing games and had no intention of providing me with an accurate figure to reflect his own household budget.  It was at this point that I stopped playing the game and told the debtor that he could discuss the matter with his attorney.

Remember: As a non-attorney, you should do everything you can (within your scope of power) to obtain the information you need to compile a well-detailed bankruptcy petition.  If the client refuses to provide that information or cooperate with you, do the best you can to get as much information as you can, then document details of the interview (as I have done below) and turn the matter over to your attorney. Ask your attorney how they want you to move forward and wait on their instruction.

MY NOTES TO THE ATTORNEY REGARDING THIS CASE provided for training purposes only

STUDENT LOAN ISSUES

From what I can understand, the clients have 2 sons with 2 separate student loans.  The first son (who is 21) has a student loan with Great Lakes for which the debtor co-signed.  This means that the debtor may need to start paying $300 per month for this student loan debt beginning in June 2010.

However, debtor claims that these are his student loans; however, he acknowledges that he did NOT attend school.  Because debtor did not attend school, the student loans must be in the name of the son who did attend.  I am sure that Great Lakes had to place the student loan in the name of the student, not the parent.  Yet, debtor says that I am totally wrong and became very upset.

Bottom line: We do not care if debtor wants to pay the student loan for his son who is able to work and pay his own debt; my ONLY concern is if the Chapter 7 bankruptcy will be over in order time to allow for this $300 monthly payment.  By allowing for this $300 monthly payment, Debtor’s income could be reduced on Schedule I; but the expense may not even be allowed by the court since the debt does not belong to debtor.  This is the part the debtor is not able to understand.  I do not believe the loan is solely in his name and that his son is the only one responsible for it; but if I am wrong, please let me know.

Since debtor is unable to clarify this information and provide me with a suitable explanation, I have NOT listed these loans since they are currently NOT due and at this point, are not in default and not the responsibility of the debtor(s).

DEPENDENT ALLOWANCE

The debtor(s) currently have both sons living with them.  One son is 21 and the wife said he has a job; however, the husband said he is still looking for a job.  The problem is, the 21 year old is NOT in school and therefore may not qualify as a dependent on the bankruptcy petition regardless of whether he is working or not.

However, the second son, who is 20 years old, is still in college and will not be graduating until 2012. Again, the student loan would not even be due until this date, yet debtor said he wants to plan ahead and include the amount in his bankruptcy.  In fact, he got angry because I told him the court may not allow for this student loan repayment and therefore I was not placing it on Schedule J unless the attorney advised me otherwise.  I tried over and over again to explain to the client that we were only concerned with TODAY not tomorrow; yet, he became more agitated and upset with me.

Therefore, I listed both sons on Schedule I but the attorney may receive objection from the trustee.  Hopefully the trustee will allow the son who is still going to college as a dependent but it cannot be guaranteed.  The clients both need to get their stories straight before they go to court.  You may want to counsel them only to say YES and NO and not to start telling stories since their stories are always conflicting.

GE MONEY BANK DEBT

The debtor(s) listed on their client intake forms that they had a debt owed to GE Money Bank in the amount of $6,194.47 but it was a credit card.  Since the account number they provided was not a credit card number, I talked with them about it.

I discovered that the debt was SECURE because they purchased 4 television sets.  However, the debtor was unable to describe the TVs to me.  I cannot believe that 4 televisions are worth over $6,000 unless they are of a better quality than the $800 the debtor claims.  First he told me the televisions were very OLD (but would not tell me how old).  Next he told me he owed GE Money Bank $3,000 but added some more stuff in January (less than 90 days ago) that brought the total to $6,000.  When I asked him what items he had previously purchased for the original $3,000 debt, he said it was for the television sets.  When I asked him what he purchased in January, he again said it was the television sets.

This conversation continued like this for almost 15 minutes and I tried every way to try and help the debtor understand that I needed a complete inventory of the GE Money Bank debt but he kept giving me conflicting information.

My thoughts: Since this debt is such a touchy subject, debtor may have purchased these items less than 90 days ago because he knew he was filing bankruptcy.  As you know, any debt made within the past 90 days could be subject to non-discharge and the clients may have to pay this debt or give up the televisions.

Please find out:

1.   A complete inventory of everything included in the $6,194.47 debt 2.   A complete inventory of any purchases made to GE Money Bank within the past 90 days, which includes January. 3.   A complete description (brand name and size of screen) for each television set 4.   The monthly payment made to GE Money Bank 5.   Are they behind in payments?  If so, which months? 6.   Do they plan to catch up the back payments or surrender the televisions?

THE RECENT FINE FOR SPEEDING TICKET

In general conversation debtor mentioned that he has a court appearance set for March 23 to appear for a speeding ticket.  When I tried to find out about the ticket the debtor refused to go into detail. The only information I could pull from him was the court date and the amount of the fine, which is $332.  I did a search online through PACER as well as the Los Angeles Traffic Court but I could not locate any records on this traffic violation.

Debtor stated that he already paid the fine but still he needed to appear in court.  I suggest you check this out.  If the $332 was the entire fine paid in full, it needs noted on the bankruptcy petition. If the $332 is only a partial payment, I need to know that also.  Additionally, I need to know the:

1.   Case number 2.   Case caption 3.   Parties in the case 4.   Date of ticket 5.   Name and address of the court handling this matter

ADDITIONAL QUESTIONS

Debtor could not tell me if he was behind in payments on the 2002 BMW.  If he is behind, he will need to catch up those payments before the 341 Meeting or a potential objection could be challenged by the creditor since this case will more than likely be a Chapter 7.  In the petition we have asked the creditor to accept a LOWER monthly payment as well as a CRAM DOWN.  The original amount owed was $14,474 on the 2002 BMW but the Nada Guides has a market value of $6,025.  We are saving the debtor(s) $8,449.00 but if they do not show a good faith effort to catch up any past due balances, the deal could be lost and receive an objection from the creditor.

If they are only 1 month behind in payments, this may not be an issue; however, debtor was unable to provide me with this information and became upset when I asked him the question several times so I gave up.

SUMMARY

I hope my notes help you when you work on future petitions.

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

The problem: There is not enough left over for the debtors to make a Chapter 13 Plan payment.

I talked with an attorney today who said:  For a Chapter 13 Plan, I thought all I needed to do was take the amount left over between Schedules I and J and this was the Plan payment.

Unfortunately, in 90% of the cases, it is not that simple.  For example: Today I had a married couple who owed three mortgages on their home.  Here are the particulars:

$420,000 – Current market value of home

$320,000 – First mortgage $  20,000 – Second mortgage $200,000 – Third mortgage $  20,725 – Exemption allowance

Adding up $320 + $20 + $200 we have a total of $540.  The home is valued at $420, leaving the debtors with $120 in equity.  Minus out the exemption allowance and the debtors are UNDERWATER by  approximately $100.  This means that the attorney could propose a cram down on the THIRD mortgage and save the debtors $100,000.

This is a good thing, right?  Wrong.  Even with the cram down, the debtors only have $2,300 left over every month to make a Chapter 13 Plan payment.  After plugging in the figures into the Chapter 13 Plan, it would take a MINIMUM of $3,000 in a monthly payment just to cover the mortgage obligation, and still then, the unsecure creditors would only be paid 9 percent  (which could be a problem.)

BAD SOLUTION:

Some attorneys, when faced with a problem like this will reduce the expenses on Schedule J just to get the case filed.  But these are the types of things that will drive a Trustee insane.  Also, these are the types of things that can embarrass an attorney in court in front of their clients because they have not done their job properly.  They took the easy way out and left the Trustee to figure it out.

GOOD SOLUTION:

The best approach to solving this dilemma is for the attorney to meet with the debtors and explain the situation.  The attorney should start by giving the debtors a copy of Schedule J and ask them to look over the figures and let them know if everything looks okay.   After the debtors approve the figures (or change them) the attorney can explain the problem to the debtors in terms they will be better able to understand.

The attorney may say something like:  Since the figures are correct on Schedule J, you can see that you have $2,300 left over per month.  However, since your house payment is almost $2,000 that leaves you with only $300 to pay on your cars and the $250,000 in credit card debt.  As you can see, there is not enough money to do that.  Can you look over Schedule I and J and let me know if you can find an extra $700 so that I can make the Chapter 13 Plan work?

This puts control in the debtors hands and allows them to feel they are taking an active role.  If debtors understand issues, they will be more cooperative in staying in the Chapter 13 Plan.  However, if the debtors are unable to come up with a solution, at least they will be able to understand the problem and the attorney can explain different options.

WHAT IS THE BEST SOLUTION TO THIS PROBLEM?

If the debtors are unable to afford their home or do not anticipate increasing their income, the best solution would be to surrender the home.  This would give the debtors a fresh start and since there are only two of them, they could downsize and still leave a comfortable lifestyle.

However, people are attached to their THINGS, like homes and cars.  In fact, they are so emotionally attached that they cannot stand for a day to pass unless they have that particular home or particular car in their possession.  I personally do not understand it.  Everything in life comes and goes.  Everyone has a time when they have money and a time when they do not.  During the times when I have less money, I spend less and adjust my spending habits.  When I have money again, I celebrate and spend more.

Unfortunately, many people today are not willing to make sacrifices, but I hope this article at least puts the problem into a more understandable perspective.

** This article will help you to understand important basic information if you are an attorney just getting started or transitioning to the field of debtor bankruptcy law.

An attorney called me today.  She was in a hurry and wanted to know what software she needed that would prepare a bankruptcy petition in about an hour.  I told her that none existed.  She then proceeded to tell me about an attorney who had a software program that imported credit reports, filled in all the creditor addresses and did everything, including filing her petition at the press of a button.  I explained to her that almost all bankruptcy software programs perform these same functions; but there is no bankruptcy software program that is going to practice law for her.  She was disgusted at my response but it is the same response I get from new attorneys quite often.

Remember the old saying: What looks too good to be true, probably is?  All adults should know by now that anything that appears to be simple and easy actually requires a skill.  I wrote an article one time about how horrible I was at trying to bag my own groceries at the store.  I explained that even something that sounds like it could be simple (like bagging groceries) still takes a skill that is only learned by practice.

Therefore, every person reading this article needs to reprogram their brain to understand that no bankruptcy software program is going to THINK for you.  Software programs only make some jobs easier.  You still need to go in and check data, categorize it, determine priorities and much more.  No software program is going to do that no matter how much you pay for it.

HOW DID THIS RUMOR GET STARTED?  LETS EXAMINE A REAL LIFE SITUATION:

John Q Public is sitting at home watching television.  He hears the rumor (started by the new media) that he can save his home if he files a Chapter 13 bankruptcy.  John Q Public is 9 months behind on his mortgage and facing a foreclosure because he lost his job.  Mr. Public rushes to the phone to call Ms. Attorney and tell her he wants to file a Chapter 13.

Note: For those of you who work within the bankruptcy system, you already know this statement by the media is only partially true.  The media conveniently leaves out the fact that a person cannot qualify to file a Chapter 13 if they are unemployed and have no money left after paying their basic living expenses.  That is the catch; however, John Q Public does not know that.

Ms. Attorney, who, through a lack of training, offers to file a Chapter 13 for John Q, Public.  Ms. Attorney uses her bankruptcy software program to prepare the bankruptcy petition.  Ms. Attorney has little or no training in preparing the petition and she spends from 6 to 8 hours just correcting and adjusting information (that the software cannot do).  She was unaware of this when she purchased the software because she was under the assumption that it did everything for her.

Next, Ms. Attorney is overwhelmed by the fact that she has also not been properly trained in how to gather all the necessary information for preparing petitions, properly counseling her clients and how to filter out clients who do not qualify for bankruptcy and help them through debt counseling or some other form of assistance.  Without this basic knowledge, new bankruptcy attorneys are going to be in for a very rocky road ahead; especially since there is no software program that is going to do all of this for them.

What happens next is another nightmare.  After Ms. Attorney enters in all the income for John Q Public and his wife, John Q Public does not qualify for a Chapter 13.  In a situation like this some attorneys will try to still push the bankruptcy through by finding an income from another source or suggest the debtor get a part-time job so he or his wife can qualify to file a Chapter 13.

Or, if Ms. Attorney manages to get the bankruptcy petition filed by some other method, she will still risk extreme embarrassment at the 341 Meeting when she is in front of the client, creditors and the Trustee.  When the Trustee finds these issues and brings them to the table, many attorneys will simply stop accepting Chapter 13s or stop doing bankruptcy altogether rather than face this situation again.  This is sad; because the result was only caused from a lack of training and knowledge in building her practice.  Another old saying: An ounce of prevention is worth a pound of cure.

LOGICAL POINTS TO CONSIDER

If you are a seasoned bankruptcy attorney, I urge you to pass this information on to new attorneys.  In doing so, you and I are helping to improve professionalism and positive growth within the bankruptcy field.  If you are a new attorney, I urge you to study the following logical points:

1.   If a bankruptcy software program existed that could do all the thinking for you, why would someone need to hire a bankruptcy attorney?  Why not just buy the software and call it a day?

2.   If the bankruptcy court allows an attorney to charge $1,000 or more for a Chapter 13, do you not think there must be more work involved?  Some attorneys think the software does the work for them; but remember that the court does not just grant a large sum like this to an attorney without good reason.

3.   If you were going to open a pizza shop, would it be a good idea to learn how to make pizza first?  If you are going to start a new bankruptcy practice, would it be a good idea then to learn about the process first?  The least a new attorney can do is login to the American Bankruptcy Institute and view the free training videos at:

http://www.uscourts.gov/video/bankruptcybasics/bankruptcyBasics.cfm

Although these videos were made for attorneys to place on their websites to inform their clients about bankruptcy, they are still excellent in helping new attorneys understand the basics.  I always tell my students to study the law from a legal perspective as well s the consumer perspective.  It provides you with a better balance of knowledge that will carry throughout the life of your law career.

ONE SOLUTION TO CONSIDER

The videos from the American Bankruptcy Institute will NOT show you how to gather information from your clients, prepare the petition or run your practice.  That education has never been taught to attorneys and either they learn the skill through trial and error or from an experienced paralegal.

As the author of this article, I would be more than happy to talk with any attorney who is considering getting involved in the bankruptcy field. You can email me at: victoriaring1958@gmail.com

I hope this information helps you.

I am very happy to report that the Law Firm of John H Spurgeon in Pasadena, California has opened a new debtor law bankruptcy practice and will be accepting new clients soon.  Attorney John Spurgeon worked as a Certified Public Accountant for many years before graduating from the California Bar approximately 10 years ago.

Since that time, John Spurgeon has been specializing in family law.  He had been referring all bankruptcy requests out to other attorneys in the area.  However, when he found the requests were growing in number, he decided to open up a bankruptcy law practice to compliment his existing customer base.

A quick search on the American Bankruptcy Institute website at www.abiworld.org will show you the high level of increase in bankruptcy filings within the state of California.  For example: in the Second Quarter (April, May and June) of 2009 there were a total of 53,505 filings in the state of California alone.  These figures result down to almost 600 California residents PER DAY filing bankruptcy.  That is the most extreme I have ever seen in my entire 30+ year legal career.  The numbers are mind boggling and you may not understand the level of significance unless you are working in the bankruptcy field.

Due to these high numbers of filings, many homes in California are owned by banks.  Although the state of Florida is also suffering and filings are extremely high there also, the difference between the appraisal amount and the amount owed to the bank is much smaller in Florida compared to California.  For example: In California, there are many homes (priced at $100,000 in other areas of the country) originally selling for $700,000 and up.  Now that the housing market has collapsed, California home owners are finding the same property is appraised at $200,000 and they are underwater a half million or more.

In an effort to stabilize the housing problems in California, many California bankruptcy courts are putting provisions in place so that debtors may stay in their homes and this helps to prevent more criminal activity within the neighborhood as well as protecting the investment of other homeowners.  For example, did you know there are unscrupulous people who pick the locks of bank-owned homes, change the locks and rent the property to innocent victims?  If the person(s) owning the home would have stayed in it instead of moving the moment they received a foreclosure notice, this would not have happened.  It is unfortunate that people often do things that hurt them simply out of panic.

WHAT PROVISIONS IS CALIFORNIA BANKRUPTCY COURTS PUTTING IN PLACE FOR PEOPLE?

Victoria Ring is putting together a training package that will teach California attorneys how to propose strip downs of second mortgages and cram down first mortgages.  This is a new procedure that has been tested and approved by the Central District of California (the most difficult district to file a petition in).  Look for a future email announcement regarding the training package so that you can save your clients literally millions of dollars and help them get a fresh start in these hard financial times.

DO YOU KNOW OF ANYONE FACING FORECLOSURE?

One of the goals and focuses of Victoria Ring is to educate as many people as possible during these hard financial times.  If you know of anyone who has received a foreclosure notice, tell them NOT TO MOVE.  Stay in their home and keep it well maintained.  There are many opportunities for homeowners who are behind in their mortgage (and many are coming down the pike); simply because the bank would prefer to preserve their investment by having the property owner stay in the home instead of leaving and have the home subject to criminal activity.

ARE YOU AN ATTORNEY?

If you are receiving this notice and you are interested in discussing the establishment of a bankruptcy law firm for your practice, so that you can help 100s of people facing foreclosure also, feel free to call Victoria Ring at 719-659-0743.  What is the cost?  It depends on your training needs, which is why you must call for a free consultation and assessment.  Some attorneys only require training by teleconference and over the web, while others prefer that we physically come to their location.

CONTACT REFERENCE

Contact Information for John Spurgeon http://www.jsfamilylaw.com/

The following questions and answers were submitted to Victoria Ring either at a teleconference or by email during this past week. The best of the best were chosen to be published below.  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 regarded as legal advice.

DEAR VICTORIA:

If a lady is filing bankruptcy and she is pregnant at the time of filing, is the unborn child considered a dependent on Schedule I of the bankruptcy petition?

ANSWER:

No. An attorney explained it like this to a client one time who asked the same question: We do not know if your child will die at birth, be given up for adoption, raised by a family member or any other number of factors that could alter the dependent status of the unborn child.  Therefore, the child is not eligible to be a dependent until after the birth.

But, if the bankruptcy is still ongoing at the time the child is born and the child will be the dependent of the female filing bankruptcy, Schedule I and J would need to be Amended to allow for the dependent claim as well as the monthly expenses to care for the infant.

DEAR VICTORIA:

Am I to understand that I do not have to use a Certificate of Service when I initially file the bankruptcy petition?  That means I only need to use the Certificate of Service afterwards?

ANSWER:

You are correct.  The Creditors Matrix within the bankruptcy petition serves the place of the Certificate of Service.

DEAR VICTORIA:

If a bankruptcy case is closed, can it be reopened so the attorney can file an amendment?

ANSWER:

It depends on several factors.  How long has the case been closed? What are the reasons for reopening the case? Can the attorney prove to the Judge that there is good enough reason to reopen the case?  Was the case discharged or dismissed? (There is a big difference.)  Therefore, in order to sufficiently answer this question, you need to contact the Help Desk of your local bankruptcy court and obtain the rules for reopening a closed bankruptcy case so that your attorney can review them and make a decision whether to do so or not.

DEAR VICTORIA:

During an online search I found a motorcycle that was titled in the name of the debtor but the motorcycle was not reported on the client intake forms.  When I asked the debtors about it, the wife said it was repossessed and the husband said it was sitting in their garage.  Who should I believe?

ANSWER:

No one.  Your job as a non-attorney is not to make legal decisions. Make sure you document this problem and point it out to the attorney.  The attorney will need to determine the best way to handle the situation.

DEAR VICTORIA:

Do you really train attorneys?  I find that hard to understand.

ANSWER:

Why is it so hard to understand? Attorneys do not obtain training in how to prepare bankruptcy petitions and pleadings when they attend law school. They are trained in the legal aspects of the various chapters within bankruptcy; but they are not trained in the actual day-to-day operation of the bankruptcy law firm.  This is where I provide the service and it is one of the most fulfilling jobs I have.

DEAR VICTORIA:

I am interviewing a prospective attorney client whose full-service bankruptcy practice includes Chapters 7, 11, and 13, and creditor representation.  He is a solo practitioner (25 yrs in bankruptcy) and is done with the hassle of training staff.  Do you (at a fee, of course) provide any personalized training in Chapter 11 and creditor representation?

ANSWER:

I would never recommend that a Chapter 11 be done virtually.  You must be able to work in the law firm office.  Why?  In a Chapter 11 there is no trustee so the rules change considerably compared to a Chapter 7 and 13.  Additionally, a CPA is normally hired to maintain bookkeeping records and report to the bankruptcy court every month.  Finally, you also should have some working knowledge of corporate law to work with Chapter 11s.

As you know, I am solely dedicated to John Q public which is why I ONLY provide training in Chapter 7 and Chapter 13. Perhaps you have a Chapter 11 confused with a small business owned by a debtor.  Unless a debtor owes $1 million in Schedule F debts, the debtor still can file a Chapter 7 or Chapter 13 for their sole proprietorship business.