Has Your Bankruptcy Client Used Their Credit Cards Within the Past 90 Days?

The importance of why obtaining this information from the client is essential because it could prevent you from unnecessary Adversary Proceedings filed against your client in bankruptcy. Read the rest of this entry »

A Solution to Streamline Chapter 7 and 13 Bankruptcy Law Firm Operations

An option to help bankruptcy attorneys streamline the client intake process and develop consistency within their law firm operations. Read the rest of this entry »

Industry Leaders Attending Atlanta Bankruptcy and Marketing Training Seminar

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.

Bankruptcy Case Review

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 Filipino 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 reluctant 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.

Bankruptcy World Updates

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

Understanding the New Foreclosure Proposal by President Obama

— a perspective for the Chapter 7 and 13 bankruptcy professional

On February 25, 2010, President Obama proposed a bill that would prohibit foreclosures on home loans unless they have been screened and rejected by the governments Home Affordable Modification Program, also known as HAMP.

At the present time, companies have the ability to proceed with foreclosure actions against homeowners, even though they have registered with HAMP.  However, the proposed changes would prohibit lenders from initiating new foreclosure actions before loan screening by HAMP and would require lenders to halt existing proceedings for borrowers once they are in a trial repayment plan.

DOES THIS INCLUDE ALL HOME LOANS?

No.  Only home loans that are owned by Fannie Mae and Freddie Mac are eligible for this preferential treatment.  However, President Obama has asked the major banks to grant more loans to American citizens since it was all of us who donated the billions of dollars to save the banks less than 2 years ago; but that is a separate story.

HOW DO YOU KNOW IF A HOME LOAN IS OWNED BY FANNIE MAE OR FREDDIE MAC?

At the present time, if a mortgage loan is owned by Fannie Mae or Freddie Mac, the borrower may be eligible for a Home Affordable Refinance to take advantage of lower interest rates.  To find out if a loan is owned by Fannie Mae or Freddie Mac, visit: http://www.makinghomeaffordable.gov/loan_lookup.html

Additional eligibility requirements are provided at: http://www.homeloanlearningcenter.com/files/HAMPEligibilityRequirements.pdf

SUGGESTIONS FOR USE OF THIS INFORMATION WHEN PREPARING BANKRUPTCY PETITIONS

Bookmark the http://www.makinghomeaffordable.gov/loan_lookup.html website.  Make sure you add this to the links you use for online searches.  That way, when you start a new petition where the debtors are homeowners, you should automatically run the property address through both Fannie Mae and Freddie Mac to see if the home loan is owned by these two entities.  If so, alert your attorney to this at once by providing him or her with the Eligibility Requirements document referred to above.

The debtor may be eligible for a loan modification which may prove more advantageous than using the cram down or strip down method.  Because every bankruptcy petition is unique and different, you need to have a wide variety of options and resources available to you so that the attorney can utilize the best and appropriate action that is in the best interest of the debtor.

REFERENCE:

Direct link to Bloomberg news article: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahuuwBS8KYq8

A Typical Example of an INSIDER DEBT in Bankruptcy

— 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!

New VBAs Trained This Week and Update

— 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

713Training and 713Attorney Company Reorganization

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

Bankruptcy Petition Case Review

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.