713Bankruptcy.Com's Blog

It’s difficult to believe that it’s been almost 2 weeks since I started packing for the 713Training seminar in Atlanta, GA, but it has.

On Day 1, we covered marketing and how to get business, and on Day 2, we held bankruptcy petition training, with a focus on Chapter 13’s.

For those that weren’t able to attend, you can checkout the marketing and petition training materials on our website:

Marketing Training:

www.713training.com/categories/Marketing-Your-Business/?sort=priceasc

Chapter 7 Training:

www.713training.com/categories/Chapter-7-Training/?sort=priceasc

Chapter 13 Training:

www.713training.com/categories/Chapter-13-Training/?sort=priceasc

I have been able to correspond with many of the attendees of the seminar and get updates on how they are making deploying what they learned to start or grow their business, and am excited for their success!

So moving along, have the debtors on the cases you have worked on, ever not submitted EVERY pay stub you need for the Means Test?

If you’ve been drafting petitions for more than oh, a week, you’re part of the chorus of laughter I hear ringing in my ears right now.

The answer to the question is…YES!  In fact, this is quite common.

So what’s the big deal?  That all depends on the jurisdiction the petition is going to be filed in.  If you’re filing in a jurisdiction that doesn’t use the Means Test, or doesn’t put much weight on it, it may not be an issue at all.

If however, you’re filing the petition in a state that does use the Means Test in they’re analysis of the case, or if you file most of your cases in a jurisdiciton that lives and breathes by the Means Test, it’s a VERY big deal, especially for cases that are borderline on whether they can file a Chapter 7 or not.

So when you have missing pay stubs, what do you do?

First off, I always ask for them.  I normally send the debtor an email with a list of everything that we need for their case, so that they have a checklist to work off of.

I then try to follow up the email with a phone call, to let the debtor know that there is an email in their inbox, so that they know to look for it, and to respond to it.

Usually the debtors are very helpful, and get any missing pay stubs to us within a few days.  Sometimes however, the debtor tells us they can’t find the missing pay stubs.

Uh-oh!  Now what?

Well, we still have a couple of options:

The next thing I do, is ask the debtors if they would talk to their employer, and ask for either a reprint or a report of the missing pay stubs.  I tell them they can just tell the payroll person that their attorney needs it, which typically gets they payroll person to take care of this quickly.  I also tell them that if they ask what the attorney needs it for, to just say “It’s a private matter”…no big deal.

If for some reason, we still come up short on pay stubs, we have a last resort…a lifeline if you will, that most trustees seem to find acceptable.  It’s called “bookends”

What are book ends?

When we’re collecting pay stubs for filing bankruptcy, we need pay stubs representing the last six full months.  With that in mind, if we have the first pay stub at the beginning of the six months we’re interested in, and the pay stub from the end of the last six months we are interested in, as well as several in between, it is likely that the amount of pay on the missing pay stub(s) could  be surmised, and used for reporting of income.

Fortunately this bookending of pay stubs is not usually necessary, but it’s a good tool to have in your tool belt when needed.

Have a terrific week!

Sincerely,

-The 713 Training Team

DISCLAIMER: We at 713 Training 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.

The following questions and answers were submitted to 713Training.Com either at a teleconference or by email during this past week. 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.

QUESTION

I have been following your question and answer series and I now have a question.  Can you explain the difference between adequate protection payments and post petition payments and when they would apply in a chapter 13?

Theoretically, adequate protection is supposed to protect the creditors depreciating interest prior to Plan confirmation, but what are the post petition payments protecting, or is this something for the Trustees?

I am thinking that post petition payments would be payments that would be made after the filing, but not sure how or why it works.

ANSWER

Adequate protection is normally INSURANCE.  For example, the lienholder needs for the debtor to maintain insurance on the asset in case something should happen to it while it is in the debtors possession.  This adequately protects the lienholder.

Post petition payments are payments made by the debtor prior to confirmation of the Chapter 13 Plan.  Debtors should start making payments PRIOR to their 341 Meeting and continue making their Chapter 13 payments to the Trustee according to their Plan.  The Trustee will hold these funds until Plan confirmation, at which time; they are released to the creditors and paid according to the Plan.

As far as the motor vehicle being worth LESS than what is owed on it. If the debtor has been paying on the debt for more than 2.5 years, he or she is automatically eligible for a cram down.  This will save your debtors money.

QUESTION

Do you have a couple of quality low cost websites for legal services advertising? I desire to construct an interactive attorney site. I have viewed WordPress.

ANSWER

I just developed the new Attorney Marketing Links site at:
http://www.713attorney.com/links/attorneymarketing.html

To answer your question; I have been very successful in building 9 online businesses. The way I accomplished that is from doing the job myself.  99.9% of all internet marketing I do for my company is free.  It just takes time.  No other legal service is going to do the job with YOUR company in mind.  Other companies only think of their own pocketbook and I do not trust them to work in the best interest of my company.

Besides, why do you need to market your law firm for very long anyway?  All you need to do is market until you have the level of clientele you desire, and then stop.  If you provide a good service and your clients like you and your staff, the majority of your future business will come from satisfied clients giving your law firm praises by word of mouth advertising.  No legal services advertising company can provide you with that level of quality in marketing.

QUESTION

Are you planning to schedule training seminars in Chicago, Illinois in 2010?  I am sure there are interested parties in Chicago, other than myself who would attend.  I have ordered my training materials already, but I could greatly benefit from live training.

ANSWER

I receive many requests from people all over the U.S. asking me when I plan to be in their area.  Please understand that I have been traveling and training at seminars since 1992 (18 years).  I wish I could travel like I used to, but when I leave to do a seminar, my own workload gets behind.  Plus, with the progression of age and diabetes, I need to curtail my traveling from the massive amount I have done in the past.

That is why I have developed a wide range of training options for you.  I can train you privately at your computer, or you can come to Colorado for personalized training.  Flying is cheaper than buying gasoline these days anyway.  For more information, check out these links:

Online Training at Your Computer
http://www.713training.com/shop/cart.php?m=product_detail&p=96

Bankruptcy Petition Review Training
http://www.713training.com/shop/cart.php?m=product_detail&p=86

Personal Training in Colorado
http://www.713training.com/shop/cart.php?m=product_detail&p=98

SPECIALS OF THE WEEK

Complete Bankruptcy Kit (Both Chapter 7 and Chapter 13 Training Materials)
http://www.713training.com/shop/cart.php?m=product_detail&p=59

Chapter 13 Training Workbook
http://www.713training.com/shop/cart.php?m=product_detail&p=80

4 Years of Bankruptcy Training via Teleconferences
http://www.713training.com/shop/cart.php?m=product_detail&p=116

How to Conduct Online Deed and Records Searches
http://www.713training.com/shop/cart.php?m=product_detail&p=102

The following questions and answers were submitted to 713Training.Com either at a teleconference or by email during this past week. 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.

QUESTION

How successful have the attorneys you work for been in confirmation of a proposed strip down?

ANSWER

An attorney I work for as a virtual assistant in Victorville CA has been successful in the confirmation of two Chapter 13s where a strip down of the second mortgage was proposed.  As soon as the attorney provided me with this information I quickly developed training materials to teach other attorneys how it was done.

Additionally, the Central District of California Bankruptcy Court began offering classes to teach attorneys how to be successful in proposing strip downs.  This fact alone confirms the information I have been blessed to be privy to.

QUESTION

How successful have the attorneys you work for been in confirmation of a proposed cram down?

ANSWER

I have personally worked on only one case where an attorney in Ohio was successful in getting a cram down of the primary residence confirmed.  The mortgage company was Washington Mutual and the attorney filed the case during the same time they were transitioning.

However, I have talked to attorneys in Texas, Florida and Missouri who have discussed cases with me where they have been successful in negotiating cram downs and saving their clients money.

Again, as soon as I learn about something that can benefit the debtors I tell you about it through my articles and training products.  However, I cannot guarantee that all cram downs and strips downs will be successful.  That would be impossible and illogical for me to even try and attempt.

QUESTION

If a strip down of a mortgage is confirmed, what will be the outcome at the end of the 3 or 5 year Chapter 13 plan period?

ANSWER

No one knows.  The law could change at any minute or change 100 times between now and then.  I believe this question would even be unpredictable by President Obama at this time.

QUESTION

I am an attorney and I feel very uneasy about proposing a cram down or a strip down.  I am afraid that it would cause additional litigation with the mortgage company and perhaps cost me more than I charged the client for the petition.  Do you have any suggestions to ease my fear?

ANSWER

There are a couple of good choices available to you that you may want to consider:

1.  If you propose a cram down or a strip down and the mortgage company files an Objection, this would open door for negotiation to still save the debtors a great deal of money.  Once a number was reached, the attorney would charge the client for this negotiation and enter into an Agreed Order with the mortgage company.

2.  If you propose a cram down or a strip down and the mortgage company files an Objection, you can simply change the figures on Schedule A and file an Amendment if you are too timid to negotiate on the debtors behalf.

Remember, all creditors must file a Proof of Claim.  Most attorneys I have worked with who propose cram downs and strip downs will monitor the case on PACER and look for any Proof of Claim filed by a mortgage company.  They compare the claim amount stated by the mortgage company with the cram down amount proposed in the Chapter 13 Plan.  At this stage, the attorney contacts the attorney for the mortgage company and begins the negotiation process to come to an Agreed Order.

QUESTION

Can I propose a cram down or a strip down for every client?

ANSWER

Not at this time.  From the teleconferences I have listened to, taught by judges and attorneys; cram downs and strips downs are only approved in HARDSHIP cases until the Senate passes the proposed Bill.  In other words, if a debtor can afford to pay back more than the first mortgage, a strip down is then paid back as UNSECURED.  If the debtors income is considered hardship and they file a Chapter 13 (demonstrating their ability to at least try and pay back all they can afford) cram downs and strip downs are often normally confirmed.

QUESTION

Can you guarantee that my proposed cram down and strip down will work?

ANSWER

Of course not.  No one can.  The goal here is to TAKE A CHANCE to help keep homeowners in their homes.  A cram down or a strip down may or may not work at this period in time.  It is a chance you take.  If you do not want to take the chance, and are not willing to take that extra step of CARE for your clients, then do not propose a cram down or a strip down and call it a day!!

QUESTION

I am a publisher for the creditor side of bankruptcy. I heard that you are teaching debtor attorneys how to reduce mortgages.  Could I interview your attorneys for my book?

ANSWER

I will tell you the same thing I told this person:  Proposing cram downs and strip downs are something that attorneys must TAKE A CHANCE in proposing.  I am NOT an attorney.  I am a paralegal training instructor; which means that I would never tell people that cram downs and strip downs work in every case and without any snags or problems.  The information I am teaching at this time will change at any minute.  The Bill is currently before the Senate; therefore, we only have a SMALL WINDOW of time to use these training methods and they will become obsolete.  Publishing this information in a book is worthless because it will be out-of-date before the book is printed.

SUMMARY

Please STOP taking my drive to KEEP CONSUMERS IN THEIR HOMES and turning this into a she-said, he-said scenario.  I realize that the legal world does this almost spontaneously (which is why I chose to leave the confines of a back-biting office staff environment long ago.)  But I wrote this article to help attorneys to stop thinking about all the bad things that can happen and TRY to help your clients.  Even if you should fail with some cases and excel in others, at least you know you did your best and provided your clients with the best possible service you can.

I wish all of you a beautiful Christmas holiday and peace of mind.

Victoria Ring
Certified Paralegal and Training Instructor

The following questions and answers were submitted to 713Training.Com either at a teleconference or by email during this past week. 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:

I have a client that sold 2 cars right before filing bankruptcy.  I need to list them but unsure where to put cars sold. I looked in Statement of Affairs and the only information I came across that is close is under financial accounts closed.  In this category it states: information that has been sold; but it asks for an institution name.  The cars were sold in a private sale and sold for $2600.

ANSWER:

Place it under Item 2 of the Statement of Affairs: Income Other Than from Employment or Operation of a Business.  If the sale was made within the past 6 months, it needs to be listed on the Means Test as well.

DEAR VICTORIA:

A client wants the Petition to be filed by the end of this week but wants to know what effect filing will have on his tax return.  Can you advise on this matter?

ANSWER:

No.  I cannot advise on any legal matter because I am not an attorney. You also are not an attorney and cannot provide any legal advice to clients either. All you can do is gather the information and record the asset.  List the ANTICIPATED TAX REFUND under Schedule B but do not include it on Schedule I or the Means Test, since the income has not been received within the current month (Schedule I) or the past 6 months (The Means Test). In some states the tax refund is 100% exemptible; but you will need to check the exemption allowances for the jurisdiction the debtor resides in.

HINT: Many VBAs and non-attorneys make the mistake of trying to help clients feel at ease and end up giving legal advice to help calm them down.  To become more familiar with your role as a VBA, I strongly urge you to take the free online exam regarding unauthorized practice of law which is available at:
http://www.quia.com/quiz/1790405.html

DEAR VICTORIA:

I filed a joint chapter 7 for an attorney in Florida. We tried to exempt both cars under FL exemption allowance but find out that because both cars where in one debtors name he was going to pay the unexempt amount of one of his car. To prevent this we converted the petition to a chapter 13 so we can keep the car and to strip off the second mortgage.

Now the old trustee’s attorney under the chapter 7 filed an Application for payment of Quantum because he said that he spent 3.15 hours at a rate of $350.00 with a total of $1,102.50 plus what he spent on Pacer to gather all the information so he can have the asset turned over.

They want the debtor to respond to the application order but the attorney does not know the procedure. Should the debtor respond that the attorney should get paid or should he object to that order?

ANSWER:

At any time, if an attorney is unsure of a procedure, the attorney (or you) needs to contact the court to obtain the correct procedure.  In this case, you would need to contact the Chapter 13 Trustees office.

Simply find the Chapter 13 Trustees office online at:
http://www.13network.com/

Call the office and say something like:  My attorney received a request from the Trustee (use his or her name) to respond to an Application Order for Case No. (whatever).  Is there a specific form the Trustee needs for us to use or what procedure should we follow?

Every court, every trustee and every office is different within the court system. Every office has a different procedure they follow and those are the types of things you need to familiarize yourself with so that you can help your attorney better.  Unfortunately, you often cannot learn these types of things in basic training. This type of education is obtained on the job.

PERSONAL NOTE FROM A VBA:

Victoria, you are so valuable to this industry. I am really glad I found you. Thanks to you I have income coming in to support my family. I want to thank you for your hard work and dedication to this industry.  Take care of yourself and delegate the things that other people can do so you do not work too much.  Your health is more important than anything in this world. And of course your personal relationship with God because He is the one that gives you the knowledge and the strength to be successful in your life.  If there is anything I can do to contribute to the growth of your company do not hesitate to contact me.  God Bless you, Yuleidy Lopez. Email: yuleidylopez@live.com

REPLY FROM VICTORIA RING:

You are such a dear sweetheart to care so deeply.  I appreciate you very much.  However, I have SO MUCH to be thankful for.  I love life and I am having a ball.  I will continue having fun until I get out of here – then I get to have fun throughout eternity.  So the next time you are feeling down, remember:  (1) You have eternal life and you will never die; and (2) If you love Jesus Christ and are saved, eternity is going to be the best part of your life!!  Therefore, I think I can suffer through a little pain on Earth because eternity with Jesus Christ (in my new disease-free body) will be much longer; it will be forever.

HAVE A WONDERFUL WEEK!
Victoria Ring

The following questions and answers were submitted to 713Training.Com 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

I attended the Chapter 13 Cram Down and Strip Down teleconference.  In the materials I received there were 33 pages of pleadings that provide samples for the Strip Down procedure.  However, there are no pleading samples for first mortgage cram downs.  Where do I get this information?

ANSWER

The attorney said that in the case of a cram down, the Trustees have not required her to file a Motion.  The Motion is only required for stripping the second since it is an elimination of debt.  However, in a cram down, when the debt is not being eliminated but proposed to be paid at a market value amount, this is simply proposed within the Chapter 13 Plan itself.

If there are no objections from the mortgage bank, the cram down is allowed in hardship situations.  The key is the word HARDSHIP.  If the debtors can afford to pay more than the base market value, the court may require them to pay more.  This is why the balancing of Schedule I and J are so important when the petition is first filed.

I sincerely hope this helps to address the issue.  I appreciate you coming to our teleconference and posing this question.  In order to find the answer to your question I had to do some research; and along the way, I also learned something new.  Thank you.

DEAR VICTORIA

Client owes income taxes for 2007.  They will be dischargeable April 15 2010 right?  What if client filed for an extension in 2007 and did not have to pay until October 2008?   Are they still dischargeable in April 2010?   Or do we have to wait until October 2010?

ANSWER

Are you asking if you have to wait until October 2010 to file bankruptcy? Regardless, taxes are NOT dischargable at any time.  They are provided for on Schedule E since they are a PRIORITY claim.  If the client has been making payments on their tax debt since October 2008, you would list the payment on Schedule J in a Chapter 7.  However, if the case is a Chapter 13, the monthly payment for the federal, state and county will need to be figured into the Chapter 13 Plan payment.

There are tax attorneys who specialize in working with the IRS or state tax departments to reduce tax debt, but in a bankruptcy, taxes are not discharged regardless of how old they are.

DEAR VICTORIA

I just learned something cool.  I do not know if you have them in Colorado, but here in Utah, we have a furniture store called RC Willey. The Utah attorney said the following:

The angle I used with RC Willey is to coincidentally file just after they get a judgment because at that point their PMSI secured interest is gone. I file before they record the judgment as a lien on real property.  I just did this a little bit ago and the debtor was able to keep the items because the secured interest was gone and no new lien was filed on her home.

ANSWER

Excellent.  Thank you for sending the information so that I can publish it for others to learn from.

DEAR VICTORIA

I plan to attend more teleconferences and order additional training materials when my financial situation improves. Currently, I am unemployed and unable to jump aboard like I would want to at this time. But, I would like to thank you for suggesting that I connect with the VBA after the teleconference ended; she has been very helpful thus far, and I anticipate great opportunities to network with other virtual bankruptcy assistants in the future.  Enjoy your Christmas and best wishes for a healthy and prosperous New Year.

My email address so that other VBAs can contact me is:  hopesuz@aol.com

ANSWER

Thank you so much for your kind email.  I understand what it is like to be unemployed.  But you can use this time to research and improve your knowledge in the area of bankruptcy.  Be sure to visit the links page at http://www.713attorney.com/links and this will provide you with a good starting point.  It could take months to go through these links so enjoy!  You will not need to spend a penny.

TRAINING IN CRAM DOWNS AND STRIP DOWNS OF MORTGAGES

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SAVE AN ADDITIONAL 10 PERCENT – JOIN AND SUPPORT THE NAVBA
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The following questions and answers were submitted to 713Training.Com 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 the only debt the debtor has is arrearages on the mortgage, can the arrearage be cured over a 5 year period or is a 3 year repayment plan required?  At 3 years, the payments are too high.  At 5 years, they can afford it.  I think years ago arrearage on mortgages used to have to be cured in 3 years.  Is that not the case now?  From all of the literature I have read a 5 year repayment would be ok.  Help!!!

ANSWER

It depends on the ability of the debtor to repay the arrearage.  If they can pay them off in 3 years at 100%, you may wish to propose a 3 year plan.  However, you cannot propose a 3 year plan at 99% or less.  Instead, this would need to be a longer term to meet the 100% requirement for Chapter 13 Plans under 5 years in length.  But, if the debtor is unable to pay 100% of the arrearages with interest within the 5 year maximum, the proposed Plan can be lowered to as little as 2% depending on the debtors ability to pay and the local rules of the court.  However, as you are aware, every bankruptcy petition is unique and different strategies apply to different cases.

DEAR VICTORIA

I have a client with three vehicles titled in their name.  One vehicle is used solely for the debtors trucking business.  Can I exempt $6,750.00 from truck under California 704 exemptions as tools of trade?

ANSWER

I have found that many things are accepted in California that is not accepted in the majority of other states.  I personally have never used the “tools of trade” exemption for a motor vehicle.  It is my understanding that it is considered a motor vehicle instead of tools of trade.  However, if you interpret the exemption to include motor vehicles, go ahead and try it. However, to be on the safe side, this is a question you really need to ask a California bankruptcy attorney since they would be more familiar with local rules of your state.  Let me know what happens and I will pass the information on to others.

DEAR VICTORIA

I looked on the website and did not see any other workbooks. What I was wondering is if you have any more practice petitions that I could get my hands on?  I would not mind even sending them to your staff to grade and you charge me for the work, just like your service you have for when we have a real petition to have checked over. I really feel that I just need to keep doing more over and over. I think I am starting and feel comfortable. Let me know if you can help in anyway.

ANSWER

I have had several requests for this from others so I am in the process now of putting together practice petitions for people like you for training.  The problem I have is that today I mainly do petition reviews and amend petitions because of problems.  Therefore, I normally never do a bankruptcy petition from start to finish and do not have all the components needed for to create practice petitions.  This is why the project is taking me so long to compile and I apologize for the delay.

In the meantime, print out an entire bankruptcy petition and read the legal documentation (especially the Statement of Affairs pages).  Highlight anything you do not understand and bring the questions with you to the next seminar or contact NAVBA members at www.navba.org and offer to pay them for their time to help you.

Note: NAVBA members are busy people. Either they are busy building their VBA business or they are busy doing petition work for attorneys.  The members enjoy helping others, but you cannot expect to call them and expect a lot of free conversation and advice.  If you talk more than 5 minutes in an initial telephone conversation with a NAVBA member, you need to offer to pay them for their time and schedule an appointment to meet during a time they are not in the heat of working.

For those of you who would like to have a petition reviewed and receive private training in how to improve your skills, visit:
http://www.713training.com/shop/cart.php?m=product_detail&p=86

DEAR VICTORIA

I just signed up an attorney that specializes in Personal Injury. He has occasionally done Bankruptcy’s but not a lot of them. He is going to start seeking more BK business so I can do the petitions. Anyway, I just wanted to let you know I enjoyed the class and also all the information you send us NAVBA members.

ANSWER

You bring up an excellent point.  All areas of law are suffering right now in one form or another.  The only type of law that is growing by astronomical figures is bankruptcy. Therefore, all attorneys are worth marketing to at this point in time.  I am glad you found that information on your own and will continue marketing to other attorneys.

For those who need some really good marketing information that is guaranteed to help you:

Ebooks:

http://www.713training.com/shop/cart.php?m=product_detail&p=88
http://www.713training.com/shop/cart.php?m=product_detail&p=36

Training Video:

http://www.713training.com/shop/cart.php?m=product_detail&p=94

DEAR VICTORIA

I have a web site up and running but I do not feel confident enough to start marketing yet (although I have all the materials and strategy set to go).  I know that first impressions are crucial and so I want to be a completely competent VBA before I solicit business from potential attorney clients.  Your suggestion of an internship/apprenticeship sounds like the perfect next step for me on my way to creating this business.  Do you think I should try to work with another more experienced VBA who needs some back-up help?  Or do you think I should contact an attorney like the gentleman you mentioned, Art Houseman?  Perhaps both?  How can I get in touch with them? Any advice that you can offer would be greatly appreciated.

ANSWER

First of all, if you wait until you feel completely confident, you will never grow your business.  Bankruptcy is like learning how to swim.  You will never learn how until you jump in the water.  I do not want to give you advice on what marketing methods to use because I have not performed an analysis on your goals and expectations.  Only you know that information.  Therefore, I suggest doing whatever you feel comfortable in doing.  Just jump in the water, try everything you can, and see what works.  Being in business is like playing the lottery.  Sometimes something will work and other times it will not.  An old saying that is still true today:  Failure is the only means to bring success.

DEAR VICTORIA

I read an article you wrote and you were talking about an “employee mindset.”  What does that mean?

ANSWER

Many employees do not understand what when a company spends money on them, that employee needs to generate that revenue back, plus make a profit in order for them to keep their job.  Employee minded people look at their employer the same way a child looks at its parent.  The employee centers their whole life and existence around their employer and they do not understand that they must create a profit for the company or they lose their job.  When it happens, the employee is devastated; especially when it comes through no fault of their own.

This is OLD SCHOOL methods that were implemented between 1920 and 1990 when employers wanted to build huge companies and expand outside the US.  Prior to 1920, most people owned their own business and provided products and services they developed from their minds and their bodies.  Today, this is the only way to survive but most people have been programmed to think with an “employee mindset.”  But there is hope; as it requires training to break out of this mold.

I strongly urge you to research methods you can use to break out of this mold and learn basic skills in building a business.  Below are a few links to help you get started:

Go to the video search engine of Google:
http://video.google.com/
Type in the search words:  start business
Also type in the search words:  service business marketing

Watch some videos and learn a wide variety of skills from different business owners.

DEAR VICTORIA

Thank you so much for your efforts to protect all from these scam artists. Although I find it hard to believe anyone could be so gullible as to send that information to ANYONE, the facts are that people fall for this type of thing all the time.  In fact, senior citizens are the most vulnerable, because they come from an era where people were more honest.

For those who do have credit cards, they should know that if they receive something like this, they should go to their credit card statement, get the customer service phone number, and call the company, who will quickly tell them its a scam, and also will inform the company that such a scam is being perpetrated on their customers in their name.

Thank you again for caring . . . And you are so smart to have never gone the “plastic” route . . . I am on my way to becoming debt free and once there, will never again go down that path.  Hard lessons to learn!

DO YOU HAVE A QUESTION?

Submit it at:
www.713training.com/contact.html

The following questions and answers were submitted to 713Training.Com 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 realize you are very busy and I thank you for everything you are doing to advance the Virtual Bankruptcy Assistant field. So, if you are not available, who else can I contact for help?

ANSWER:

The 713 Training.Com Team Members are:

Deborah Shaffer, Certified Paralegal and Chapter 7 Expert
Phone: 610-698-6977
Email: legallydeb@verizon.net

Clayton Holland, Chapter 13 Training Instructor
Email: clay@mybankruptcyassistant.com

Leanne Levett, Attorney specializing in foreclosures
Email: lalevett9@gmail.com

Robin Harvey, Vice President of the NAVBA
Email: fyrelitz2@yahoo.com

Michael Misenheimer, Creditor Bankruptcy Expert
Email: mmisenheimer@gmail.com

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.

713Training.Com is solely dedicated to John Q public which is why we 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.

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The following questions and comments were submitted through email to 713Training.Com. The answers are provided by Victoria Ring who is not an attorney.  Therefore, the information provided in this article is for training purposes only and no whole or part should not be regarded as legal advice.

DEAR VICTORIA:

I have a debtor that owns a home based business.  In addition to what her company grosses, she has paid herself a salary for the past 6 months from her business.  On the Means Test, do I have to average the amount she paid herself from the business (Line 3), and in addition, average the monthly net business income (Line 4)?  Or, do I fill in Line 4, only?  Please help!!! First time I’ve had this situation.   My attorney is waiting for Form.

RESPONSE FROM VICTORIA:

First of all you need to fill out the Business Income and Expense worksheet that is included in most of the bankruptcy software programs. If you are using Best Case software, scroll down to the VERY BOTTOM of the list of forms. There is a folder named SUPPLEMENTAL FORMS.  Inside that folder is a form named BUSINESS INCOME AND EXPENSES.

Fill this form out and make sure it is filed as an attachment to Schedule I when the petition is filed.

Take the AVERAGE NET INCOME (Line 23) and enter this figure into Line 3 of the Means Test.  If you refer to the form you will see that Line 3 states: Net Payroll Other Than Debtor.)  Therefore, you will NOT include the money the debtor pays herself from the business on this particular worksheet form.

Since we now understand this information, we can reasonably deduce that the money the debtor pays to herself needs to be listed on LINE 7 or LINE 13 of Schedule I.  Check with your attorney to be sure.

Also remember to remind the attorney that he or she needs to obtain 6 months of bank statements from the debtor’s business account as well as her personal account.  The attorney will need this to verify the debtors’ earnings reported within the bankruptcy schedules.

Note: In some states, the attorney will simply take the bank statements with them to the 341 Meeting and hand to the Trustee. In other states, when the bank statements are used as pay advices, they would need to be filed with the bankruptcy petition (sometimes the court even requires a cover sheet.)  Always check your local rules of procedure to address questions at this level.

DEAR VICTORIA:

The debtor is married but is filing as an individual.  I included the husbands’ income in the Means Test because they do not live in separate households.  My problem is that I am not sure how to complete the Statement of Affairs for the husband.  I put the wifes income for 2009, 2008, and 2007 but do I also need to include the husband income for the same years even though he is not filing bankruptcy?  I was told only put 2009 for the husband because its only this year that counts for CMI.  It just does not look right to me and I wanted to run it by you.

RESPONSE FROM VICTORIA:

They may do things different in California but in all the petitions I have done (if the husband is not filing) we would place the husband’s income under Item 2 of the Statement of Affairs.  It would be listed as Spousal Contribution.  The husbands income would also be listed under Schedule I as well as the Means Test.

However, you may want to call your local California Help Desk because I have found that California has many strange customs that is totally different from other states.  I learn so much when I visit California, so make sure you check out my response to make sure you are complying with the court rules.

DEAR VICTORIA:

This is my first bankruptcy petition and I need some help.  I am filing a petition for my client and I am in California.  As you know, this is a community property state.  If a husband and wife are divorced and living in separate residences, and the husband wants to file bankruptcy without his wife, will the wife be responsible for the debts that are discharged and the husband does not pay?

RESPONSE FROM VICTORIA:

I did a little online research and I found the following information at
http://bankruptcy-law.freeadvice.com/consumer_bankruptcy/spouse_bankruptcy.htm
which states (in part):

…. Community property and common law (also called “equitable distribution”) are the two types of martial property ownership. The vast majority of states apply the equitable distribution rules; nine states apply the community property rules. If you live in a common law property state, your spouse’s bankrupt estate will include his/her separate property and half of the jointly-held marital property. The non-bankrupt spouse will not have to worry about the effects of the bankruptcy on his or her separate property…..

UPDATE ON CHAPTER 13 SEMINARS

I would love to invite all of you to Denver for the Chapter 13 Training Seminar next Friday and Saturday.  This seminar is very special because it is the first time Matthew Williamson has offered such a low introductory price for his day of marketing training.  When Mr. Williamson does seminars in California, the attorneys pay as high as $1,000 to attend.  But Matthew and I have been working on other projects that have been beneficial to his law firm; and Matthew offered to provide this training to help attorneys and virtual bankruptcy assistants alike who attend this one particular seminar.

This marketing seminar will definitely put you ahead of the game.

In addition to attending the Denver seminar you will receive a FREE Chapter 13 Training Workbook. This is the BRAND NEW workbook that was recently introduced. However, those who attend the Denver seminar will get the first printed copies and Victoria Ring will personally autograph them for you at the seminar.

Denver is beautiful this time of year. The air is very clean and fresh. So, if you are living a life inside the rat race, take a breather and come to Denver. You can write the expenses off on your business taxes plus increase your income at the same time.

I hope to see you there. To sign up, visit:
http://www.713training.com/workshop/seminar_01.html

Issue 167

The following questions are from attorneys and virtual bankruptcy assistants that we received this past week. The answers are provided by Victoria Ring, a paralegal (not an attorney.)  If you have a question you would like answered by Victoria in a future issue, please email it to her at:
victoria@713training.com

Need immediate support with your bankruptcy petitions? See the Important Notice at the bottom of this issue.

QUESTION

I am trying to help another VBA.  She emailed and said she could not get Schedule I and J to balance. I sent her back the following reply and I wanted to know your feedback on my reply.  My reply to her was:

The purpose for the bankruptcy is to help a person that has had difficulty in paying their bills, to get a fresh start, so that they can pay their bills, and be a contributing member of society, rather than to just wipe a bunch of debt, and let them continue to not pay their bills.  So, if the debtor is $4,200 in the red every month, something will have to change or the trustee will dismiss the case, and the petition was filed for nothing.

ANSWER

You committed unauthorized practice of law when you stated:  [or the trustee will dismiss the case.]  When did you become an attorney?  You cannot predict when or if a case will be dismissed.

I am presenting this feedback to you in this forceful manner in order to help you realize the mistake you made can be CRUCIAL TO YOUR CAREER.  In fact, this statement could actually destroy your company if you continue to say things like this.  I strongly urge you to begin with the FREE online quiz I developed at:
http://www.quia.com/quiz/1790405.html
The next step is to enroll in an online Legal Ethics course through a paralegal organization such as http://www.paralegals.org
and advance your knowledge in this area.

An alternative to the statement you made would be something like: [there is a possibility that the trustee could dismiss the case.]  As a non-attorney, remember to use words that NEVER LOCK YOUR STATEMENT IN so that it is NEVER regarded as legal advice.  For example:  using the word [will] indicates that you are an attorney and have jurisdiction over the Trustee.  By using the words [there is a possibility] you are NOT putting your back against the wall.  You are simply saying that an event could or could not occur and your answer does not take a specific stand in any direction.  (Politicians use this age old tactic all the time.)

An attorney taught me these methods so that I would not commit unauthorized practice of law and cost him money in possible lawsuits.  (Attorneys take an oath to be responsible for the non-attorneys they employ.)  Below are a couple of references to help you get information on this topic:

http://www.bestwebbuys.com/9780735529045
http://www.abanet.org/cpr/mrpc/rule_5_5.html
http://www.training-classes.com/programs/00/07/757_ethics_and_the_law.php
http://www.theelearningcenter.com/detail/ethics_

QUESTION (actually a COMMENT)

This petition you sent me to do has been a really good learning experience.  The biggest lesson I have learned is to absolutely INSIST that the Client Intake Forms be filled out…ESPECIALLY the debt sheets.  Holy smokes!  It is ok that I have spun my wheels a ton on this one…because I have learned.

As I am sure you are well aware, when you do not have the needed information, it makes it a lot tougher to remember where you are at, what is missing; when you are going back and forth, back and forth, etc.  How many times can a person ask for the same data?  LOL

Next time I am going to say to the client: [OK, here are the debt sheets.  Fill them out completely for each and every debt, and get it back to me when you are done.  Then I will begin the work.]  When you learn the hard way, you do not typically make the same mistake twice!

ANSWER

I used to feel exactly the same way you do when I first started doing bankruptcy petitions. Unfortunately, you will learn that clients NEVER fill out the Client Intake Forms with the level of detail we need for preparing the bankruptcy petition.  Throughout my career and after being involved in the processing of thousands of bankruptcy petitions, I have only experienced TWO clients who filled out the Client Intake Forms accurately and completely.  Although my personal experience certainly does not count for all the bankruptcy petitions being processed, it does show you that the experience is rare.  Therefore, it would probably save you a lot of stress if you accept incomplete Client Intake Forms as a fact of life and rejoice if you ever come across a complete one.

Another way to look at the situation is to place yourself in the other person’s shoes.  The average individual or married consumer who files bankruptcy is normally not organized.  If they were, they probably would not be filing bankruptcy.  You cannot expect Chapter 7 and Chapter 13 debtors to suddenly acquire skills they never had before.  All you can do is coax them into developing organizational skills such as insisting they read the Instruction Page provided at the beginning of the Client Intake Forms and following the information.  If you need a free set, download them at:

http://www.713training.com/intake_forms/index.html

…. more questions and answers coming in the next issue

IMPORTANT NOTICE

Are you an attorney, paralegal, legal assistant or virtual bankruptcy assistant currently preparing bankruptcy petitions and you need some training and support?  713Training.Com offers two methods to help you:

Method No. 1: Join the NAVBA for as low as $19.99 and receive an immediate array of various training and support options; or

Method No. 2: Pay-as-you-Go with the Bankruptcy Petition Review service we offer. Links to both options are provided below:

Join the NAVBA
http://navba.org/JoinNAVBA

Purchase Bankruptcy Petition Review Service
http://www.713training.com/shop/cart.php?m=product_detail&p=86

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