713Bankruptcy.Com's Blog

by Victoria Ring, 713Training.Com
July 30, 2007

Because most debtors do not think about a 401K being an asset, they will normally only record the deduction for the 401K on their Income Page.

As soon as you discover there is a 401K deduction being deducted from a debtor’s paycheck, you need to find out the following:

1. Is there a loan against the 401K? You will find that many debtors will get a loan on their 401K before filing bankruptcy so always make it a habit to look for this.

If there is a loan against the 401K, be sure to separate the payments for the loan and the payment into the actual 401K savings. You will find the debtors either cashed in the entire 401K and they are only making payments on the loan, or they are still paying into the 401K Plan as well as paying back a loan. In this scenario, the 401K is listed on Schedule B with a lienholder attached to it.

2. What is the market value of the 401K? Every debtor should know this information because they periodically receive a statement from their employer telling them the value of their 401K Plan. If the debtor does not know the amount, they will need to contact their employer and obtain the value because it is very important.

Tip: Sometimes you can determine an approximate market value of the 401K by asking the debtor: (1) How long have you participated in the 401K? and (2) What is the total amount of the deduction? Therefore, if you find out a debtor has been participating in a 401K Plan for 15 months and they pay $250 per month, the market value will be approximately $3,750. However, it is best to always get the actual amount provided on the statement from the employer if you can.

However, in circumstances where the debtor makes it impossible to obtain this information, do not argue with them. Instead, use the calculation above and make a note on the Attorney Cover Sheet that states something like:

The market value of the 401K is estimated by calculating the length of time in the 401K Plan and the normal monthly payments. This was done in lieu of obtaining documentation that the debtor was unable (or unwilling) to provide. You may need to require debtor to obtain actual figure from employer before filing petition.

In summary, a 401K is listed on Schedule B as an asset and Schedule I as a deduction from the debtor’s earnings. It doesn’t matter if the 401K is worth $1.00 or $1,000,000.00. A 401K is an asset and Schedule B should include all assets the debtors have an interest in.

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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.

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AUTHOR BIO:

Victoria Ring is a Certified Paralegal and Bankruptcy Specialist and was the first paralegal to develop the Virtual Bankruptcy Assistant field in 1999. She has also 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, NFPA and the Supreme Court of Ohio for CLE credits. Additionally, Victoria Ring provides speaking and in-house training services for bankruptcy law firms. Visit her website at http://www.713training.com

by Victoria Ring, 713Training.Com
written July 30, 2007

If a debtor has a cell phone, it is normally not listed under “Household Goods and Furnishings” on Schedule B. Unless there is no lien against it or the cell phone has a market value of $199 or less, the cell phone itself is normally not listed at all. However, there will probably be a cell phone contract that goes with the cell phone.

Therefore, when you encounter a debtor who has a cell phone (which is almost everyone); you should find out the following information:

1. What is the market value of the cell phone? If over $200 it should be listed as an asset either as a separate item or under “Household Goods and Furnishings” on Schedule B. There is one exception to this rule though. If the cell phone is used for business it would NOT go under “Household Goods and Furnishings.” Instead, it would be listed as a separate item on Schedule B and designated as “used for business purposes” in the description area.

Additionally, if the debtor has a cell phone that he or she uses for business, there will be some “business income” to report on Schedule I.

2. Does the debtor owe a debt on the cell phone? Not the cell phone service, but the actual cell phone itself? If so, you will add a lienholder to this asset on Schedule B.

3. Does the debtor have a cell phone contract on this phone? Normally the answer will be “yes” unless the debtor is using a prepaid phone card. (Note: People who have really bad credit will normally have a prepaid phone card.)

Also, if there is a cell phone contract, you will need to get all the information for Schedule G. And if the debtor’s wanted to continue paying the cell phone contract, the monthly payment needs to be recorded on Schedule I. (Note: The monthly payment is the contract amount – not charges for additional minutes or other fringe benefits such as text messaging and GPS navigation service.)

4. If the debtors no longer have cell phone service, you can bet that 99% of the time, they will have a debt for an unpaid cell phone bill. Watch for this on the debt sheets that the debtors fill out. If they don’t list the debt, make sure you get all the information anyway.

As a virtual bankruptcy assistant, it is your job to go “above and beyond” the call of duty for the attorneys as well as the debtors who file bankruptcy and keep you in business. In the legal world, it is easy to get “full of pride” when people you help look up to you and appreciate your quality of work. But it is very important for you to remember to be humble, caring, and sensitive to the needs of others and willing to do whatever it takes to get the job done.

If all virtual bankruptcy assistants followed this guideline, our industry would grow much more rapidly. Why? Because if an attorney tries out a virtual bankruptcy assistant who produces poor work or costs them a great deal of extra time, they will judge the entire industry on this one experience. So EVERY ONE of you is extremely important and valuable. Please work together and you will reap the benefits of a more stable income stream as the industry grows.

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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 and was the first paralegal to develop the Virtual Bankruptcy Assistant field in 1999. She has also 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, NFPA and the Supreme Court of Ohio for CLE credits. Additionally, Victoria Ring provides speaking and in-house training services for bankruptcy law firms. Visit her website at http://www.713training.com

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SUBMITTED FOR PUBLICATION BY LYNN CARROLL
Lynn’s Website: http://www.Carrollegal.com

I recently signed with an estate planning attorney as her virtual assistant. She is completely sold on the virtual work concept and is moving her office to her home. She had done some research on virtual office solutions and I thought I’d pass along some information that might be useful to other virtual assistants.

A few things we’ve looked at are:

Onebox: http://www.Onebox.com
Onebox lets you receive all of your voice mails, faxes and emails in one place, accessible on the internet. You can set it up so people dial one number and the calls can be forwarded to the phone wherever you happen to be (home, cell, office). It also has calendar and contacts.

HyperOffice: http://www.HyperOffice.com
This website provides a system for calendar, contact and document management.

Solve360: http://www.Norada.com
This is another system for calendar, contact and document management.

My client is going with Solve360 because of the larger storage capacity. I may set up a HyperOffice account myself to use with other clients. I would pay for the service and just make sure my rate is high enough that it covers the added costs (in other words, I won’t bill clients separately for the service).

The virtual office solutions allow virtual assistants, virtual bankruptcy assistants and clients to collaborate on documents, create virtual client files, etc. You can assign your client tasks, your client can assign you tasks, and you can manage projects. For example, a virtual bankruptcy assistant could set up each client as a project or group and link all of the documents, contacts and to-dos (follow up calls, etc.) for that client. When petitions are completed, the virtual bankruptcy assistant could put the file on the shared space so the client could review it. That way, the file is not going back and forth via email.

Other virtual assistants have mentioned using OfficeZilla http://www.OfficeZilla.com There is free version and a paid version. I would be hesitant to use the free one until I found out whether it offered a level of security.

Lynn Carroll
http://www.Carrollegal.com
Virtual Legal Support
Digital Transcription
719.930.1405 (phone)
719.466.2050 (fax)
Contributing Expert: http://RatRaceRebellion.com

The answer could change the way you do business.

Columbus, Ohio has been suffering an incredibly hot summer with no rain this year. In fact, the grass around my house was turning brown and dying. So I drove down to Home Depot and purchased a lawn sprinkler so I could water my lawn two hours every night and bring it back to life.

The next day, the neighbor next door purchased a lawn sprinkler. Two days later, the other next door neighbor purchased a lawn sprinkler. I thought this was wonderful because now three of us would have beautiful green lawns. But it didn’t stop there. The neighbor across the street purchased an in-ground sprinkler system which must have cost around $2,000.00.

Although I was happy that the green grass that God made was no longer going without water, I also noticed a common human emotion that applies to business. Let me explain.

The people in my neighborhood were not purchasing lawn sprinklers because they cared about the green grass that God provided for our comfort. I know this is true because I have lived in my home for over 2 years and no one had purchased a lawn sprinkler before. Instead, the neighbors were more concerned about my grass looking greener than theirs because one of the neighbors came and told me about it. This is simple human pride and it will do nothing for you.

Are You a Leader or Follower in Business?

Most people will stand up real proud, stick their chest out and boldly say: “I am a leader.” but are they? You can only find the answer by examining the fruits of their labor. If someone tells you they are a leader, what have they done to prove this characteristic? If you cannot find any verification, it is doubtful the person is NOT a leader and they only lied to you because of their own selfish pride.

But why do people lie? There is nothing wrong in being a follower. Some people are made up that way and there is nothing wrong with it. So why do followers not like to admit they are followers? Because they have a lot of pride and believe that others look at followers as second best – which is totally untrue. Without followers there would be no leaders.

What Happens if You are a Follower?

Let us suppose you are a follower and you admit you are a follower. What kind of business can you operate? Followers make excellent business partners for leaders. Followers enjoy doing the work, but not obtaining the work. So if you put a leader and a follower together, one has what the other lacks and visa versa. If you are follower, my advice is to start looking for a leader so you can learn from or network with them to obtain ideas and follow their advice.

What Happens if You are a Leader?

Just because you are a leader this does not mean that you are all powerful and deserve to have followers bow down and worship you. Instead, leaders need followers to work with them. Don’t believe me? Put two leaders together and within a few minutes you will see the negative effect. It’s the same effect you get if you put two good cooks in the same kitchen. Each one will have a different method of cooking and within a short period of time, they both will find a way to compromise and get along, or they will bicker at each other and create a negative atmosphere which will hinder both.

Summary

Take a moment and analyze yourself. Be honest and decide if you are a leader or a follower. When you determine which personality trait you have, accept it and find compatible personalities to help you build your company.

On a final note, I had a customer email me the other day. He said that he contacted some people in the Nationwide Bankruptcy Directory who said they had not received any work from attorneys. He was curious as to if this business was legitimate. I asked him the names of the people he contacted and he provided them. I immediately recognized the people he contacted. Not one of them was serious about the business and they had done absolutely nothing to market their services.

When I realized the problem, I told the gentleman that he cannot judge a business fairly when he only contacts people who do nothing to build their business. So I provided him with the names and contact information of people who had worked hard and built their virtual bankruptcy service. In this manner, the gentleman had the ability to effectively evaluate the business itself. Remember folks: You must be able to look at both sides of the coin before you can make an intelligent decision. If not, you could end up looking like a fool.

I wish all of you the best of success in building your business with the right people. And I urge you to stop being selfish and lying to yourself. The truth may hurt sometimes, but it always wins at the final finishing line.

Victoria Ring, CEO
713Training.Com
http://www.713training.com