How to Start a New Bankruptcy Practice

How to Start a New Bankruptcy Practice - Page 6

DOWNLOAD AS PDF ... continued from Page 5 1. I began my analysis by reviewing Schedule A and B to understand how the debts were classified. Attorneys and their assistants often do not classify debts correctly and this will throw off the Chapter 13 calculation. 2. Next, I review Schedule I and J to see if any of the figures seemed out of line. (Note: If you are a beginner in this field, you will not be able to do this when you begin your career because it is a skill you need to learn over time.) For this particular petition, nothing was out of line so I had to dig a little deeper. 3. Next, I reduced the claim amount on the motor vehicles to the market value. This is called a CRAM DOWN. Because the claim amount was reduced, the monthly payment was reduced. However, this reduction still did not make any dent into lowering the Chapter 13 Plan payment from $3,750.16 to the $2,822.55 the debtors could afford. 4. Next, I double and triple checked every piece of information on Schedule A and B. When I was reviewing the motor vehicles on Schedule B and determining if they could be crammed down any further I decided to check the Kelly Blue Book value on a 2008 Lexus. The attorney had a market value of $27,450 but Kelly Blue Book showed only $16,200. I asked myself: Why was there an $11,000 difference on this one vehicle and the other vehicles matched their Kelly Blue Book values? I called the legal assistant at the law firm and asked her to get the client file and tell me what the year, make and model of the 2008 Lexus was. When she reviewed the car title she found that the model was different from the information the debtor provided on the Client Intake Forms. When the change to the market value on the 2008 Lexus was made on Schedule B, the Chapter 13 Plan balanced out perfectly with the $2,822.55 proposed monthly payment. Think about this for a moment; this one tiny, simple little error could have cost the debtor almost $1,000.00 per month. I was so thankful that a lady in our office helped me to discover the problem so that it could be fixed before it went to court. Not only did this simple change save the debtor $1,000 per month, it also saved the attorney money and time because eventually they will discover the problem and need to fix it. Or, in the worst case scenario, the debtor stops paying into the Chapter 13 Plan and the case is dismissed for non-payment. However, making this minor adjustment prior to filing the bankruptcy petition, problems like these are eliminated. Summary Although this article centers around a Chapter 13 scenario; the information is essential for any other bankruptcy chapters also. It is EXTREMELY important to make sure you have the correct market value of ALL assets as well as ALL motor vehicles. Whether you use Nada Guides or Kelly to obtain motor vehicle values, when you obtain the [trade in] value dollar amount, PRINT the webpage to a PDF or paper so the attorney has it with him or her when attending the 341 Meeting. This print out provides the verification the attorney needs to negotiate settlements with the lender or aide in allowing the Trustee to accept the cram down dollar amount for the motor vehicle debt. For a list of links specifically to help you when preparing bankruptcy petitions, visit: http://coloradobankruptcytraining.com/links_petitions.html Don’t Forget to Network with Other Attorneys Not long along it was considered highly unethical for an attorney to advertise his or her services. Advertising was considered to be something that cheapened the legal profession. Instead, attorneys were always taught to believe that the best representation was generated from good referrals, which is simply another form of marketing. As an attorney today, you are no longer restricted from advertising. In fact, legal advertising takes all types of forms including billboards, radio, television and thousands of other avenues. And also, as an attorney today, you no longer need to hold on to the stigma that it is “not okay” to contact other bankruptcy attorneys in your area. There is enough work in the Chapter 7 and Chapter 13 field, competition rarely exists, if at all. In fact, if you contact some other bankruptcy attorneys, you may be surprised to find that you end up with some work (generated from the heavy workload the attorney is under.) To network with attorneys that we personally know and have worked with, visit: http://www.coloradobankruptcytraining.com/references.html | Previous Page |

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