Bankruptcy Assistant Training in Appraisals for Real Estate

Bankruptcy Assistant Training:

An attorney in Florida called us this week to discuss his clients case. An appraisal had been done eight months ago by a real estate agent for $175,000. However, the debtors only owed $161,000 to the first mortgage company and $12,000 to the second for a total of $173,000. The attorney originally filed a Motion to Strip the second lien so that the debtors could afford to keep their home in a Chapter 13.

However, this decision created a major problem: The home was NOT underwater. In other words, the debtors actually had equity in their home since the appraisal came in at $175,000 and the debtors only owed a total of $173,000.

This fact alone made the home ineligible for a cramdown or strip. These are normally only successfully proposed and confirmed if there is NO EQUITY. In fact, the true value of the home (which needs to be less than what is owed) is the basis of the argument for the debtor attorney. Without that basis, the mortgage company will always file a Motion for Relief from Stay.

The Florida attorney was considering allowing the case to be dismissed and refile as a Chapter 7. Unfortunately, this solution would have caused the debtors to lose their home due to the fact that they were several months behind in their second mortgage.

The Solution

Since the amount owed cannot be changed, the answer is to review the amount of the appraisal.  We found there were two things wrong with it:

1.  Age of the Appraisal

The appraisal was already 8 months old. With the real estate market changing almost on a daily basis, it would be wise to get a new appraisal and present this as the actual market value of the home, especially if the amount came in lower than $175,000.

2.  The Type of Appraisal

Just like you list the yard sale or pawn shop value on a bankruptcy petition for personal property; there are two different types of appraisals for real property.

The first type of appraisal is a real estate appraisal, which is the most common. Because attorneys do not normally educate their debtors about the two different types, most debtors will call the real estate agent in their area. They never tell them they are filing bankruptcy so the appraiser determines a value as if the clients were reselling their property. This price almost always includes a six-percent padding for the commission of the real estate agent. Therefore, a standard real estate appraisal is often higher than the true market value.

As we know, the bankruptcy court can only liquidate real and personal property for the market value, not the real estate or replacement value. In fact, the court normally gets less than the market value, which is then turned over to the creditors for distribution and the debtors lose the asset.

The second type of appraisal is often called a DRIVE BY appraisal. These types of appraisals are often less expensive because the appraiser normally never enters the home. When an appraiser knows the appraisal is for a bankruptcy filing, he or she will compare the comps in the neighborhood a determine a more true market value without all the commission money padding.

Attorneys Should Team with Area Appraisers

One of the most useful tools a bankruptcy attorney can have is to know several good appraisers in their area.  These appraisers should know the difference between a standard real estate appraisal and a market value appraisal. Then, attorneys can provide their clients with a list of these appraisers to obtain a true market value of their home plus save their clients some money compared to a full real estate appraisal.

The Moral of the Story

Although you cannot rely 100-percent on Zillow, the attorney was albe to determine that the home listed for $162,000. This tells us that the $175,000 appraisal done 8 months ago is probably incorrect. The Florida attorney obtained a new appraisal and hopefully will be able to get the Chapter 13 Plan confirmed so that the debtors can stay in their home.

Notice how one simple adjustment changed the lives of the debtors. It is often the little things that matter the most; so we hope this article helps to save the homes of many debtors by attorneys advising their clients to obtain the correct type of appraisal for a bankruptcy filing.

Sincerely,
-The 713 Training Team
www.713Training.com
1-800-535-9984
Follow us on Facebook:www.facebook.com/pages/713Trainingcom/112903945407672

Disclaimer: We at 713Training.com are not attorneys; any information provided by 713 Training should not be considered legal advice. The information in this article, and any other materials provided by 713 Training, whether delivered verbally, written or via any other means, including electronic/digital delivery and storage, is for bankruptcy assistant training purposes only, and is intended for individuals who work under the direction of a licensed attorney.

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Evaluate Your Cost-Per-Case & Save Money

Evaluate Your Cost-Per-Case & Save Money

From TV ads to word-of-mouth, there are numerous ways to market your law firm to prospective clients. A firm may spend thousands of dollars per year on different marketing channels, all while neglecting to track how successful these marketing efforts are. By calculating cost-per-case, your firm can identify ineffective marketing channels and boost profitability.

Cost-per-case refers to how much you spend on one campaign to sign a client.

Cost of Marketing Campaign
__________________________________________

Cases your firm signed

Let’s say you spend $300 on leads from a third-party company. If you end up signing two leads as clients, you have a cost-per-case of $150.

Why is cost-per-case important?

Cost-per-case is important because it allows attorneys to evaluate their marketing sources and determine which channels are profitable and deserve further investment.

TV advertisements and cost-per-case

One of the most common forms of advertisements for attorneys are TV ads because they have a high retention rate among consumers. In fact, a study conducted by MarketShare showed that TV were four times as memorable as digital ads.

Before you write a check to your local news station, first consider the volume of clients you’d need to sign to make profit. A local ad will cost at least $200 per thirty-second slot. If you run two ads per day for six months, you’ll be paying over $73,000 for local TV commercials.

If your ad does very well and you sign one new client per day, you’ll have signed just 180 new clients after spending $73,000. This means a cost-per-case of $405.

This is a great cost-per-case for an employment law attorney earning more than $10,000 per settlement, but if you are a bankruptcy attorney and earn around $1,000 per case, you should seek other marketing avenues.

Digital marketing and cost-per-case

Many firms have turned to digital marketing to sign new clients. When done correctly, social media, paid web advertisements, and search engine optimization (SEO) and can be excellent methods for firms to sign cases cheaply.

Say you run a pay-per-view (PPV) campaign on Google’s Display Network to attract consumers that need a divorce attorney. PPV campaigns charge your firm per impression, which is whenever a consumer sees your ad on a browser. PPV tends to be very inexpensive per view, and you can often pay fractions of one penny per impression.

With a budget of $15,000, your ad should easily receive more than 5 million impressions. With so many people seeing your ad, it’s not unreasonable to expect at least 10,000 consumers to click through to your website. Of these 10,000 consumers, around 6% (or more) should decide to contact your firm.

Next, imagine that one in five of the 600 consumers that contact your firm after clicking your PPV ad have a desirable/pursuable case for your firm. This gives you 120 new clients and a cost-per-case of $125.

But wait—there are additional costs to consider!

When calculating your cost-per-case, you cannot forget the fixed costs required to make marketing assets. You’ll need to add in the price of creating your TV commercial to your total cost-per-case. For a commercial on a local channel, this may be relatively low.

Hiring someone to handle your digital marketing efforts would cost you much more. If you hire an experienced digital marketer full-time, you will likely be paying at least $40,000 annually. Factoring in 6 months salary for PPV, the cost-per-case skyrockets to $291.67.

Final factors to keep in mind

There are three key components to remember when evaluating your cost-per-case:

1. Be proactive. Ask every caller how he or she found your firm. Even digital marketing campaigns can have “offline” value.

2. Keep your practice area in mind. Depending on how much you expect from the average settlement, a cost-per-case of $1,000 could be excellent.

3. Don’t be afraid to ditch inefficient marketing channels. If you’ve crunched the numbers and found that you’re paying too much for any form of marketing, eliminate it.

All attorneys should investigate how much their clients cost to acquire. The results may be surprising!

Zemanta Related Posts ThumbnailDeanna Power is the Director of SEO for eGenerationMarketing, one of the largest legal lead generation companies in the US.

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Selling Assets When Considering Bankruptcy

Head over to 713training.com to read our latest article.  You will learn tips and tricks to help you  when you prepare bankruptcy petitions.F1A-713Trainingi (1)

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Avoid Bankruptcy Cases From Being Closed Without A Discharge

Check out the latest article on 713training.com, written by Attorney/VBA Shannon Doyle of Ebankruptcy Assistants.  Learn some tricks and training on how to avoid having bankruptcy cases closed without a discharge.  For more information on becoming a Virtual Bankruptcy Assistant visit 713training.com

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Christmas Gifts

Check out the new article on 713Training.com about Christmas gifts in bankruptcy.

For more information on Bankruptcy Training check out our training packages at 713training

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Debtor on the Loan, But Not The Owner?

Here is a link to a recent article on 713training.com.

http://www.713training.com/blog/debtor-on-loan-but-not-the-owner/

In the article we answer a students question that they sent in an E-mail.  If you ever have questions please feel free to call or E-mail, we’re happy to answer any  questions that you may have.     Debtor bankruptcy petition training.713Training-Google

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Liens and Bankruptcy Training

Check out this Bankruptcy Training article about Liens on Schedule D of the Bankruptcy Petition.

http://www.713training.com/pages/Articles.html

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Chapter 7 or Chapter 13 Bankruptcy?

At 713Training.com we often get asked questions about determining if a client should file a chapter 7 or a chapter 13 bankruptcy.  From our experience we have concluded that there are many factors that may effect what chapter a client qualifies for and which one would suite them best.

Income, assets, and type of debt play a big part in this determination.  In many cases you may find pertinent financial information used in determining if a client should file a  chapter 7 or chapter 13 bankruptcy. You will be much more valuable for the attorney if you are able to make correct observations and report these findings to the attorney.

Below is a list to help  determine what chapter to file.

Chapter 7 is commonly used when:
You have little property except for the basic necessities like furniture and clothing.
You have little or no money left after paying basic expenses each month—or you’re not even meeting basic expenses.
Advantages of Chapter 7:
  •  
Most unsecured debts can be discharged (completely eliminated)
The process moves quickly—you may receive your discharge in just a few months
Creditors can’t contact you while the automatic stay is in effect—or after debts are discharged.
Who can file under Chapter 7?
Debtors who have qualified under the ‘means test’ and completed a required pre-filing session with a credit counselor may file for Chapter 7 bankruptcy protection.
Chapter 13 is commonly used when:
You have significant equity in a home or other property and you want to keep it.
You have regular income and can pay your living expenses, but you can’t keep up the scheduled payments on your debts.
Advantages of Chapter 13:
You can keep most of your property while spreading out time to pay past due accounts
You’ll have 3-5 years to catch up delinquent accounts according to a schedule that you and the bankruptcy trustee have agreed is workable for you.
You’ll make one monthly payment to the bankruptcy trustee for distribution—you’ll have no direct contact with creditors during the protection period of 3-5 years.
Co-signers may be protected
Who can file under Chapter 13?
Any individual debtor whose unsecured debts are below $360,475 and whose secured debts are less than $1,081,400.

his list is just a quick overview of some of the most common reasons for choosing which chapter to file for. At 713training.com we have all the training materials and personal support that you will need to prepare the best petitions possible.  Properly trained V.B.A.’s will bring extra value to any law firm and their clients, thus resulting in more business for the V.B.A.  Let’s make sure that we are all properly trained and able to get our clients the correct help they need.

-The 713 Training Team
www.713Training.com
1-800-535-9984

 

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Foreclosure and Bankruptcy

As a VBA you will find that there will be a good percentage of your clients who will be behind in their mortgage payments and facing foreclosure, filing bankruptcy can often benefit your clients. In many cases, filing Chapter 7 bankruptcy can delay the foreclosure by a number of months.  Many people are able to save their home by filing a Chapter 13 bankruptcy.

To get more training on Loan Modification:
http://www.713training.com/categories/Loan-Modification-Training/

To get personal training on Loan Modification or any topic related to being a VBA:
http://www.713training.com/categories/Personal-Training/

What is Foreclosure?

Foreclosure normally begins after a homeowner gets behind on mortgage payments. The lender begins the legal process of selling the home at auction in order to get payment for the loan. The process involves several steps, starting with notification to the homeowner.

This doesn’t happen overnight.  A lender usually won’t begin the foreclosure process until you are the home owner is several payments behind, often three or four. That gives you time to try some alternate measures, a short sale, a loan forbearance, or a deed in lieu of foreclosure.

If you’ve already tried and failed with these measures, it’s now a good time to consider bankruptcy as a possibility for avoiding or stalling foreclosure. Here are some ways that filing for bankruptcy can help the client. Taken  from training at 713training.com

The Automatic Stay: Delaying Foreclosure

When you file either a Chapter 7 or Chapter 13 bankruptcy, the court automatically issues an order (called the order for relief) that includes a wonderful thing known as the “automatic stay.” The automatic stay makes your creditors to cease their collection activities immediately, no excuses. If your home is scheduled for a foreclosure sale, the sale will be legally postponed while the bankruptcy is pending–typically for three to four months. However, there are two exceptions to this general rule.

Motion to lift the stay. If the lender obtains the bankruptcy court’s permission to proceed with the sale (by filing a “motion to lift the stay”), you may not get the full three to four months. But even then, the bankruptcy will typically postpone the sale by at least two months, or even more if the lender is slow in pursuing the motion to lift the automatic stay.

Foreclosure notice already filed. Unfortunately, bankruptcy’s automatic stay won’t stop the clock on the advance notice that most states require before a foreclosure sale can be held (or a motion to lift the stay can be filed). For example, before selling a home in California , a lender has to give the owner at least three months’ notice. If you receive a three-month notice of default, and then file for bankruptcy after two months have passed, the three-month period would elapse after you’d been in bankruptcy for only one month. At that time the lender could file a motion to lift the stay and ask the court for permission to schedule the foreclosure sale.

How Chapter 13 Bankruptcy Can Help

Many people will do whatever they can to stay in their home for the indefinite future. If that describes you, and you’re behind on your mortgage payments with no feasible way to get current, the only way to keep your home is to file a Chapter 13 bankruptcy.

How Chapter 13 works. Chapter 13 bankruptcy lets you pay off the “arrearage” (late unpaid payments) over the length of a repayment plan you propose either a three or five year plan But you’ll need enough income to at least meet your current mortgage payment at the same time you’re paying off the arrearage. Assuming you make all the required payments up to the end of the repayment plan, you’ll avoid foreclosure and keep your home.

2nd and 3rd mortgage payments. Chapter 13 may also help you eliminate the payments on your second or third mortgage. That’s because, if your first mortgage is secured by the entire value of your home (which is possible if the home has dropped in value), you may no longer have any equity with which to secure the later mortgages. That allows the Chapter 13 court to “strip off” the second and third mortgages and re-categorize them as unsecured debts –which, under Chapter 13, takes last priority and often does not have to be paid back at all.

For more information or to see how our unique training can help you simply visit our website 713Training.com or call us Toll Free and we will gladly answer any questions that you have.

Sincerely,

-The 713 Training Team
www.713Training.com
1-800-535-9984

 

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Perks of Working from Home

The percentage of employees who are now working from home or another remote location is steadily increasing.  Now that you are working from home as a Virtual Bankruptcy Assistant you can see firsthand some of the perks of working from home.  Some of the perks of working as a Virtual Bankruptcy Assistant from home are – the cost savings, job satisfaction, and greater productivity.

One of the biggest benefits of working as a Virtual Bankruptcy Assistant is that you can do your job wherever and whenever you want.  You save on gasoline, and it eliminates commuting time.  You can make your hours and can find time to get things done, even if it’s in the middle of the night.  I think that by working from home you are able to concentrate more completely on the job at hand, without the many workplace distractions.

A Stanford University study  found that people who work from home are more productive than those that don’t.  Of 13,000 employees conducted over nine months shows that those working from home are 12% more efficient than their office-bound counterparts. The study also finds a 50% increase in satisfaction among those working at home.

With all the perks of saving time and money, plus greater productivity and job satisfaction working from home is the way to go!

What are your favorite perks of working from home?

Sincerely,
-The 713 Training Team
www.713Training.com
1-800-535-9984

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Disclaimer: We at 713Training.com are not attorneys; any information provided by 713 Training should not be considered legal advice. The information in this article, and any other materials provided by 713 Training, whether delivered verbally, written or via any other means, including electronic/digital delivery and storage, is for training purposes only, and is intended for individuals who work under the direction of a licensed attorney.

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