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The information contained in this article is solely intended to increase the skills of paralegals and other legal staff who are employed virtually or non-virtually by bankruptcy attorneys. This information is NOT taught in any law school or paralegal training course.

WARNING: This information is not to be used by non-attorneys to prepare bankruptcy petitions for the general public. The information is solely intended to train legal professionals working under the direction of licensed bankruptcy attorneys.

Bankruptcy Petition Drafting Tip 1

There are TWO things you should find out from the attorney (or ask the debtor in the client intake interview) before you start drafting a bankruptcy petition. These two questions are:

1. Have you completed the credit counseling requirement?
2. Have you ever filed bankruptcy? If so – when?

As a virtual bankruptcy assistant working for bankruptcy attorneys, we have encountered several problems when not asking these questions before drafting the petition. After the attorney has the client fill out the Client Intake Forms and sends them to us, we assume the attorney has already qualified these debtors. But as amazing as it sounds – we have spent many hours inputting information into the bankruptcy petition only to find out the client has not completed the credit counseling requirement.

At this stage we have no choice but to immediately stop drafting the bankruptcy petition and notify the attorney at once. Unless the debtor can go online and obtain his or her credit counseling certificate within a few days, the figures we entered into the bankruptcy software will need to be changed. Therefore, we will stop the process. Then, when the client obtains the credit counseling certificate, we will go back and update the Means Test as well as any additional income information on Schedules I and J and year-to-date totals under Item #1 or #2 of the Statement of Affairs.

But if you want to eliminate the possibility of this situation occurring altogether, do not input a bankruptcy petition until you have verified the debtor has completed the credit counseling requirement. This information should be provided by the attorney you are working for or a member of the law staff. But in our experience, we obtained this information from the debtor during the client intake interview.

The same thing holds true regarding prior bankruptcy filings. If you discover a debtor has filed bankruptcy within the past 2 years, you will want to use the information below to determine if the debtor’s are eligible to file.

Under the new bankruptcy law:

1. If someone files a Chapter 7, they cannot file another Chapter 7 for 8 years.

2. If someone files a Chapter 7, they cannot file a Chapter 13 for 4 years.

3. If someone files a Chapter 13, they cannot file a Chapter 7 for 6 years.

4. If someone files a Chapter 13, they cannot file another Chapter 13 for 2 years.

Completing this step before drafting the bankruptcy petition will save you, your attorney and the law firm a great deal of time and expense.

AUTHOR BIO:

Victoria Ring is a Certified Paralegal and Bankruptcy Specialist. She has developed an entire line of training products and holds several seminars per year in drafting bankruptcy petitions. Her training materials have been approved by NFPA for 11 CLE credits. Additionally, Victoria Ring provides speaking and in-house training services for bankruptcy law firms. Visit her website at http://www.713training.com

The other day, an interesting question came into the 713Training.Com office from a paralegal working on a Chapter 7 bankruptcy petition. The debtor was a widow who claimed most of the debts were only in her husbands name. The paralegal wanted to know if the debts of a dead person should be listed on the bankruptcy petition. She had asked her attorney and he told her to research the topic and get back to him for a discussion.

But there is no short and sweet answer to this question. Just like everything else in the legal field, there are exceptions to every rule. On the surface you would think that dead people cannot file bankruptcy. Although this is true, we need to first determine if the debts that are in the husbands name are connected to the widow who is filing bankruptcy.

First I asked the paralegal the age of the widow. She was born in 1949 and had been married to her husband for 34 years. Next, I asked how old the debts were. The paralegal said a large majority of them had been established as far back as the 1970s. Next, I asked if the widow had been employed throughout the marriage. She had worked as a housewife and was not employed outside the home.

With the answers to these questions it was easier to reconstruct the life and times this woman lived in. First of all, since the widow had not worked outside the home, it was very likely that any credit accounts she applied for had to have included the husbands income when the credit application had been filled out. Secondly, back in the 1970s it was rare to find a woman with credit in her name alone. Most credit card applications forced a woman to list her husbands income because it was assumed that a husband and wife was one person.

Therefore, I summarized that the debts the widow claimed were solely in her husbands name was not a factual statement. I told the paralegal to have her attorney pull a credit report and compare it with the debts listed on the Client Intake Forms. This way, any debts that were solely in the name of the husband would not show up on the widows credit report. Besides, a credit report would aide in making sure the widow had included all her debts and not just the debts that she could recall.

Next, I asked the paralegal when the husband died. The answer was 2005. Therefore, she needed to find out from the widow how much money she received after her husbands death. This information is then listed under Item 10b of the Statement of Affairs, which states: List all property transferred by the debtor within 10 years immediately preceding the commencement of this case to a self-settled trust or similar device of which the debtor is a beneficiary.

If the husband had died less than one year before the widow filed bankruptcy, a copy of the probate court documents would need to be provided. The information from these documents is then listed under Item 4a of the Statement of Affairs.

Reviewing the probate court documents will also enable the paralegal to find out exactly what the widow received as the beneficiary. If she has any of these items or money in her possession it is considered an asset and this information is listed under its proper item category on Schedule B.

So you can see that even though it may sound silly to ask if a dead person can file bankruptcy, as a professional working for a bankruptcy attorney, it is your job to do the research. Once you obtain all the facts you then present this information to your attorney so that he or she can make the decision how best to protect and represent the debtor in this case.

To receive more bankruptcy petition drafting tips join The Bankruptcy Club at the 713Training.Com website.

Disclosure: The information contained in this article is solely intended to increase the skills of paralegals and other legal staff who are employed virtually or non-virtually by bankruptcy attorneys. This information is not to be used by non-attorneys to prepare bankruptcy petitions for the general public. The information is solely intended to train legal professionals working under the direction of licensed bankruptcy attorneys.

AUTHOR BIO:

Victoria Ring is a Certified Paralegal and Bankruptcy Specialist. She has developed an entire line of training products and holds several seminars per year in drafting bankruptcy petitions. Her training materials have been approved by NALS for 7 CLE credits. Additionally, Victoria Ring provides speaking and in-house training services for bankruptcy law firms. Visit her website at http://www.713training.com