Bankruptcy Petition Drafting Tip 5

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 5

Our attorney had a client that was in the middle of filing a Chapter 7 when her employer promoted her to full-time pay. At the time she originally filed her petition she was only working part-time.

When we entered her new income information into Schedule I, the Means Test automatically recalculated and placed her into a Chapter 13. In fact, her increase in income placed her $3,008.00 over the median.

But thanks to the changes in the bankruptcy law, we were able to go into the Means Test and fill out the remaining tabs. Once we entered the debtor’s information for the taxes deducted from her check and the additional school expenses for her dependent children, the Means Test adjusted and qualified her for a Chapter 7.

The moral of the story is this: If you only fill out the first 2 tabs within the Means Test Form and the debtors do NOT qualify for a Chapter 7, you need to enter the data in the remaining tabs (such as: Living, Housing, Car, Necessary, Additional, etc.) The data you enter can be found in Schedule I and J. Normally, this will change a Chapter 13 to a Chapter 7 (depending on the circumstances of course.)

And do not be afraid to ask your attorney for help if you have trouble understanding where the figures go on the Means Test. The point is that you should give it your “best shot” and then send to the attorney to review with you over the phone.

If you are afraid to speak up and cause debtors to go into a Chapter 13 (who do not have the financial ability to do so), you will not only cost the attorney and court $1,000s of dollars, but you could be taking money out of the hands of poor people who need it to survive unless the attorney catches your error and recalculates the Means Test him or herself. Your job is to make life easier for your attorney, not cause him or her to spend more time than is necessary.

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