Chapter 7 and 13 Bankruptcy Blog

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.

CONVERT MORE CLIENTS

I have been talking to several attorneys this week in regard to tools they need to help them be more productive in their law practice.  One of the major problems I kept finding was that attorneys are having difficulty converting client interviews to paying clients.  Several attorneys told me: I do 5 to 6 interviews a week but the clients never come back and retain me to do their petitions.

This is a very common problem for many attorneys; even though it sounds strange in a world where bankruptcy is the major booming field within the legal system.  So, why are some bankruptcy attorneys swamped with work and other bankruptcy attorneys are barely getting 1 or 2 clients per month?  The answer lies in the benefits you can provide to your potential clients based upon their unique circumstances.  Once you are able to evaluate their needs in an efficient manner, you will be able to know what these unique circumstances are and use this knowledge to your advantage when discussing price options with your clients.

And because every bankruptcy petition is unique and different, every client will have a unique set of circumstances they need help with.  This is why I developed the Initial Intake Form Package which is aimed at putting more money in your pocket and less time providing free consultations.  To find out more or to order, visit:

http://www.coloradobankruptcytraining.com/products_intakeform.html

UPCOMING CALIFORNIA WORKSHOP

As you may already know, I am scheduled to speak at the Bankruptcy and Marketing Seminar to be held in Atlanta, Georgia on April 23 and 24, 2010.  After I return, Michael Misenheimer and I are planning a two-day training workshop for attorneys and their personnel in Los Angeles.

Topics will include marketing, law office operations as well as training on strip downs and cram downs, which is a very popular topic in California.  In addition, I plan to present materials that will help attorneys market their law firms online.  As I told one attorney, just submitting your website to a search engine or two, is nothing.  That is why I developed the marketing links for attorneys to help them get started.  This list is free and available at:

http://coloradobankruptcytraining.com/links_marketing.html

Do you know of a meeting room we could use for the workshop?

We are currently looking for a meeting room to hold the training workshop; however, Los Angeles is so expensive.  If you have a meeting room where we could hold a two-day workshop you and your law firm employees can attend free.  Please email me if you can help us:

victoriaring1958@gmail.com

JOIN US IN ATLANTA http://www.713training.com/products/Bankruptcy-Petition-Training-Seminar.html

As you may be aware, cosigners and codebtors are people (or companies) who are obligated to pay a debt if the client does not pay it.  Therefore, when a client decides to file bankruptcy and that client owes a debt where a cosigner or codebtor is involved, it could potentially cause a major problem to develop.

This is why it is extremely important to obtain precise information about any cosigners or codebtors the client(s) have that are associated with their debts.  And to be certain you (or your attorneys) protects the client(s) in the best way possible, the attorney may need to review the contract that was signed regarding this debt.  You will need to find out:

1.   Was the debt secure or unsecure? 2.   Were the client(s) the primary or secondary client(s) on the contract? 3.   Were any items used for collateral no longer in the possession of the client(s), or that the client(s) are surrendering in the bankruptcy?

After obtaining the answers to each one of these questions the attorney will need to find out if this client qualifies for a Chapter 7 or Chapter 13.  Both Chapters treat debts somewhat differently but you need to verify the facts before the attorney can advise the client(s) properly.

Let me give you an example:  An attorney discussed a case with me that he was working on.  A lady had stopped by the office to ask about a debt she cosigned on a $27,000 credit card with her nephew.  The nephew was filing bankruptcy and he wanted to know how this would affect his aunt who was not filing.

If the nephew files a Chapter 13 and has enough income to pay back his unsecure creditors 100%, this issue could possibly be uneventful.  The debt could be paid in full through the Chapter 13 Plan which is filed with the bankruptcy petition.

However, a problem could occur if the nephew does not have enough money left over to pay the unsecured creditors 100%.  He may only have enough income to propose a 50% Chapter 13 Plan. What will happen to the remaining 50% that will not be paid through the bankruptcy?

One of the more interesting features of Chapter 13 law is something called the COCLIENT(S) STAY.  Set out in Section 1301(a) of the Bankruptcy Code, the CoClient(s) Stay disallows collection action on consumer debt against co-client(s) or the person filing for bankruptcy.

A TYPICAL SCENARIO

A client files a Chapter 13 bankruptcy and includes a debt owed to TV Centers of America for a new television.  The clients mother cosigned the loan for her son.  The clients Chapter 13 protects the mother from collection efforts for as long as the client remains in the Chapter 13 and continues making the payment to the trustee.

However, the obligation of the coclient(s) do not disappear.  If the client repays a consumer debt at 30 cents on the dollar in the Chapter 13, the clients cosigner will be liable for the remaining 70% after the bankruptcy case is discharged.   But, during the time the client(s) are in a Chapter 13, the coclient is protected.   Often in these cases, client(s) will establish special payment CLASSES in their Chapter 13 Plan to pay co-signed debts in full to protect the co-client(s).   In other situations; such as when the cosigner is an exspouse, the co-client(s) may be left exposed.

WOULD YOU LIKE MORE INFORMATION LIKE THIS?

Information like the article above are extremely valuable for attorneys and non-attorneys working in Chapter 7 and Chapter 13 debtor bankruptcy law.  To obtain your 75 page Operations Manual and Initial Intake Forms, visit:

http://www.coloradobankruptcytraining.com/products_intakeform.html

Seminar Info:  http://www.713training.com/shop/cart.php?m=product_detail&p=120

Let us begin with the visionary for the paralegal industry …

Jeannie Johnston, CEO of Paralegal Gateway http://www.linkedin.com/in/jeanniejohnston Founder and CEO of Paralegal Gateway, Inc. which is the world’s oldest and largest online Paralegal portal and Social Networking vehicle which includes a free career center, free paralegal articles (written by paralegals for paralegals), online seminars, demonstrative evidence, tools for Paralegals and much more.  Jeannie has also been a paralegal for 16 years.  Additionally, she has been a speaker at National Paralegal Conferences, is a Legal Sales Executive as well as a Legal Staffing Consultant.

experts on the CREDITOR side of bankruptcy …

Pamela Starr, CEO of StarrParalegals, LLC http://www.starrparalegals.com/ With 25+ years paralegal experience, StarrParalegals, LLC specializes in providing virtual bankruptcy assistant services specializing in bankruptcy and creditor’s rights.  StarrParalegals, LLC also provides expert services to attorneys, law firms and corporate legal departments.

Michael Misenheimer, Paralegal at Sicay-Perrow, Knighten and Bohan http://sicay-perrow.com/ Michael holds a Masters Degree in Negotiation, Conflict Resolution and Peacebuilding.  He also serves on the Board of Directors for the Georgia Association of Paralegals, the Pro Bono Director and as Community Service Coordinator. Amazingly, Michael has served in this capacity for many years and continues to be re-elected; due to the magnitude of the positive contribution he makes to the organization itself.  Additionally, Michael serves as Pro Bono Co-Coordinator for the National Federation of Paralegal Associations (“NFPA”.)

and for the DEBTOR SIDE of the coin …

Victoria Ring, Developer of the VBA Industry http://www.victoria-ring.com Not only is Victoria the developer of the virtual bankruptcy industry that serves DEBTOR bankruptcy attorneys, she is also the developer of the VBA Exam and founder of the National Association of Virtual Bankruptcy Assistants at NAVBA.ORG.  Victoria is currently working with attorneys in helping to establish new Chapter 7 and Chapter 13 bankruptcy law firms nationwide.

Clay Holland, Certified VBA http://713training.com/clayholland.html Clay is one of the top success stories in the virtual bankruptcy assistant industry.  He started his VBA business in June 2009 and by November 2009 he was making more money than he was at his fulltime job.  Prior to being a successful VBA, Clay had spent 20 years in the computer software business. He also had worked as a mortgage loan officer and is currently a licensed real estate agent.  Additionally, Clay has owned many home businesses over the years but when he found the VBA field, he knew this was the nugget of gold he was looking for.  At the seminar, Clay will reveal his success story and tell you everything he did to build a successful VBA business.

DO NOT MISS THIS IMPORTANT EVENT

This will be the ONLY seminar held in Atlanta, Georgia this year that brings FIVE industry leaders of the VBA and paralegal world together in one place.  Attend this important seminar and get to know these leaders on a personal level. To find out more information or to register, visit:

http://www.713training.com/shop/cart.php?m=product_detail&p=120

SPACE IS LIMITED.  REGISTER EARLY TO ENSURE YOUR RESERVATION.

We all hope to see you there.

– by Victoria Ring, Colorado Bankruptcy Training

I worked on a bankruptcy petition this week that involved a couple who had worked at the same job for 25 years.  They owned no real property and no unexempt personal property.  Their credit card debts totaled only $33,000 and they owned 2 older cars with very low market values.

What would be your first question when faced with a bankruptcy petition like this?

Your first question should be:  Why are these people filing bankruptcy? There has been no change in their income; they own very little and owe very little debt.  Something is missing from the puzzle and before I could go any further I had to find out what it was.

I immediately contacted the attorney by email as well as a voice mail (never totally rely on email) about the problem.  He called the debtors and found out that one of the reasons for the additional expenses was that their son graduated from college and they were paying back his student loans.

This is a typical example of an INSIDER DEBT in bankruptcy!  Learn how to recognize these and you will help to prevent fraud.

Although the debtors I prepared the petition for were probably honest people, many people could say that they are making the student loan debt for their son, when in actuality the son is making the payment and the debtor’s are pocketing the extra cash.  Creditors look for loop holes like this and this is a typical example of why bankruptcy cases are held up in court for many months.

Think about this: Typically, it is the son’s responsibility to pay the student loan debt.  Even if the debtors produce proof of payment that they actually paid the student loan payment, it would be impossible to prove that the son did not give them the cash to reimburse the payment they made.  This would give the debtors extra money each month to spend that the creditors would prefer to have.

Keep learning, take care and have a wonderful week!

– by Victoria Ring

Clay Holland is really busy this week putting together the TWO DAY Atlanta Bankruptcy Seminars so I thought I would catch you up on my week.

ATLANTA SEMINAR?

Yes, Clay is finalizing the date and then he will make the announcement.  Stay tuned for more details from Clay a little later.

CHARLOMA BANKS

February 15 and 16 I spent training Charloma Banks.  Charloma lives in Plymouth Virginia and it was her first trip to Colorado.  Charloma had taken the time to do a great deal of studying on her own prior to coming for her training.  The first day was spent addressing the questions she had regarding the materials and reviewing a variety of techniques for developing a website.

After returning to her hotel room, Charloma spent most of the evening redesigning her website to reflect the new marketing information she learned.  When I picked up Charloma the second day for her training, I was impressed with the extra effort she put forth.  We then spent several hours rewriting and revising the wording so that it was more informative.  As Charloma learned, your website should be YOUR BEST.  It can be compared with putting on a tuxedo or a 3-piece business suit and attending a governmental social gathering.  That is how good your website should look in order to attract good business.

SUZIE MCKENZIE

Suzie McKenzie is really a cool chick.  She and a couple of friends jumped in their car, in Dallas Texas, and drove to Colorado Springs.  Although the normal drive time is 15 hours, Suzie and her friends left 4 days ago and stopped and vacationed along the way.  I trained Suzie and her friend on February 18 and 19.

Suzie has owned and operated her own advertising and publishing business for many years; but like the real estate industry, the publishing world is experiencing financial difficulty too.  It appears that right now, bankruptcy is about the ONLY growing field in America.

However, since Suzie has owned her own business for many years, there is no doubt that she will be ready to start working for attorneys within a short period of time.  Plus, Suzie has an outgoing and caring personality which is a perfect fit for working with clients in Chapter 7 and Chapter 13 bankruptcy.

NEW PRODUCT FOR ATTORNEYS

I am presently in the final development stages of a new product for attorneys called:  PRE-QUALIFY INTAKE FORM.  This is a four-page questionnaire, consisting of mostly YES and NO questions.  This makes it easy for the client to fill out in less than 5 minutes while at the attorneys office.

Using the accompanying INTERPRETATION TOOL, the attorney will quickly learn how to glance down the PRE-QUALIFY INTAKE FORM and get a good, general idea as to the complexity of this case.  This information will allow the attorney to make the determination whether to accept the case or how much of a fee to charge.  The more complex the case, the higher the fee.

As soon as the product is available for sale I will announce it to my PERSONAL LinkedIn Group.  If you are not subscribed to my LinkedIn Group, visit: http://www.linkedin.com/in/coloradovictoria and click on ADD VICTORIA RING TO YOUR NETWORK (upper right)

WATCH FOR CLAY HOLLANDS EMAIL ABOUT THE SEMINAR TO ARRIVE SOON

Due to the rapid growth of the debtor bankruptcy industry, it has become necessary to separate 713Training and 713Attorney.

From 2004 to 2010 these companies served two separate markets. 713Training provides training and support for virtual bankruptcy assistants and 713Attorney provides training and support for the debtor bankruptcy attorneys.  For the past several years, Victoria Ring has been able to manage both of them with occasional support from virtual assistants she hired to answer phones and fill orders.  But at the alarming rate the bankruptcy industry is growing, a point occurred where the companies had to be separated or both of them would suffer.

Therefore, on February 1, 2010; Clay Holland of MyBankruptcyAssistant.Com will take over the management of 713Training.  Victoria Ring will then have the ability to direct her attention solely to the training and support of debtor bankruptcy attorneys and their law firms through 713Attorney.

HOW TO STAY CONNECTED TO VICTORIA RING

1.  Visit http://www.linkedin.com/in/coloradovictoria 2.  Click:  ADD VICTORIA TO YOUR NETWORK 3.  If you are not already logged into LinkedIn you will be asked to login 4.  When prompted to type in an email address, use:  victoriaring@lawyer.com 5.  Send the email invitation

If you are already subscribed to the 713Training LinkedIn list, by all means, DO NOT UNSUBSCRIBE.  Clay Holland works as a virtual bankruptcy assistant, who is also assisting an attorney in building his law practice; therefore, Clay has a great deal of knowledge to share with the group that will be beneficial to you.

I apologize for any inconvenience this change may cause but this is the procedure that LinkedIn has in place to prevent you from being subscribed to a network for an individual you are not interested in following.

Additional changes are being made to compensate for the rapid growth of 713Training and 713Attorney.  Make sure you stay connected for updated details.

Victoria Ring, CEO http://www.713Training.Com http://www.713Attorney.Com

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.