The questions below are emailed to us from bankruptcy attorneys, paralegals, legal assistants and virtual bankruptcy assistants working under the direction of attorneys. The answers are provided by Victoria Ring, a non-attorney with 32 years of legal experience.
Question:
A client of mine pulled out money from a 401k and wants to pay her child’s college tuition. $40,000. Is this a preference if paid directly to the institution? Directly to the kid? Any way around it?
Answer:
Either way, the Trustee may allow or not allow the expenditure since it for the son’s college tuition. If the debtor took the $40,000 and paid it on the debts he owes, there would be no problem. But creditors have a hard time accepting the fact that they are owed money and they think they should be paid first.
Example: I owe you $200. A friend of mine paid me $1,000 but instead of paying you back the $200 I owe you, I gave it to my son for groceries. How would you feel?
Perhaps the debtor could take a portion of the $40,000 and use some of it to help her son and some of it to pay on her debts (the priority ones of course.) This is just another angle to consider.
The problem began because the debtor cashed in his 401K. Many people do this before filing bankruptcy but it is the worst thing they could do. Under California exemption codes, the 401K was probably totally exempt. It would have survived the bankruptcy and never touched by the creditors. Because the debtor ignored that and cashed in the 401K instead, he is obligated to use the money to pay his debts, rather than filing bankruptcy and using the money for whatever he chooses.
Question:
I received a response from the attorney that I interviewed with. The reason I am sending it to you is because I don’t understand what he means by “fee sharing” and I also don’t understand how he came up with the figures he did. I was really disappointed to get his email turning my work done. I tried so hard but I guess not hard enough. Anyhow, your input is really appreciated.
Answer:
This attorney must really be from the “old ages.” Sharing fees simply means that the money paid by the debtor must solely be used for paying licensed attorneys for representation. The attorney thinks that you are taking this fee and sharing it with him like an attorney would who is called in for legal advice on a case. Call him back. Explain to him that you are working for THE ATTORNEY, not the debtor. You are not representing anyone and you are not pretending to impersonate an attorney. The debtor pays the attorney. The attorney pays you. Simple. It is the same thing as if the attorney hired you to take a deposition, fix his or her copy machine or do some research to help him or her on a case.
The attorney is totally off base and it is up to you to educate him or move on. If he still does not get it, FORGET ABOUT IT. Do not stress about it. Instead, find an attorney who at least lives in the 21st Century so you can at least be able to work together and not become the Computer Training Instructor. It is not your fault that this attorney did not keep up with technology. You would be taking on too much if you work with him, so be content in the fact that bad things often happen for good reasons.
Question:
First of all, thank you for the recent emails with specific information for completing petitions. When I was recently contacted by attorneys from Salem, Massachusetts and Wichita, Kansas I was curious to learn how they found me (they couldn’t give me specifics). I use Google Analytics to track my website statistics and discovered that 48 people have linked to my website from NAVBA and 713training.com, and spent an average of 5 minutes 32 seconds on my site with a 0% bounce rate! Wow! I’m thrilled my membership is giving me those great results. (Bounce rate means the visitor left the site after viewing the first page only.)
By the way, both attorneys have committed to working with me. The Massachusetts attorney is adding bankruptcy to his practice. He had contacted several VBAs, but I was the only one who picked up the phone to talk to him (the others replied by email).
The Kansas attorney wants to increase his cases from 45-50 a year to 150-200 a year. He needs an assistant that can keep track of all the details so he can spend time marketing and traveling. We’ll be talking again in a few days to work out the details. And it didn’t hurt that I grew up in Kansas. . .
Thanks, Victoria! (’m still interested in working as your intern and hope you’ll have something for me soon.)
Reply:
Wow!! I am SO HAPPY for you. If you do not mind, I would like to publish your email in an upcoming newsletter. It will do well in encouraging others who are struggling with this business.
It is also good to know that the link to 713Training is benefiting you on the search engines. This is one reason I recently switched over to Wild Apricot to run our NAVBA website. They provide much better search engine optimization than Bummer Hosting could provide. Your page rankings should escalate more now.
Increase your bankruptcy web site rankings and statistics, join the NAVBA:
http://navba.org/JoinNAVBA
Email from a LinkedIn Member
Thank you for sharing your experience with us. I am currently involved with the teaching CDs, and I am learning so much. Your teaching makes it so easy to learn. Also I live only 15 miles from a Federal court house so I plan to sit in on some bankruptcy cases and hopefully make some contacts there.
Note from Victoria Ring
Thanks everyone. Keep those questions coming so we can help to educate others and improve the skills of law firms nationwide.
Check out our training and marketing seminars at:
http://www.713training.com/workshop
