Archives for 2010

Get your bankruptcy for $187.00!

While checking how my website was being ranked on Google, I noticed an ad for an outfit that said it would prepare and file your bankruptcy for $187. Well, that would be a heck of a deal. It certainly piqued my curiosity.

So I went and took a look at their site. For one thing, I was wondering who the lawyer was who was doing this. I quickly found that the site provides no way of figuring out who is running the company or whether there is a lawyer involved at all. There is no address and no phone number provided. No names of any real person.

So I tired a Google search. I typed in who is and the name of the web site at Google. The first item on the list was the web site itself. The second item listed was a page at ripoffreport.com about these guys.

You can see for yourself what they have to say. You do yourself a disservice if you use price as your only criteria.

Stopping Garnishment by filing a Bankruptcy

A lot of people have had their bank accounts garnished this week. My phone has been buzzing about it. I think the law firm of Messerli and Kramer must have been cleaning up their garnishment backlog over this past weekend or something.

So now I am having to explain that I can’t just create a bankruptcy filing to stop the garnishment inside of a few hours or even a few days. To be sure I am getting it right, I need somewhere around six weeks, maybe more, to put one of these bankruptcy cases together. A bankruptcy petition is a document that usually exceeds 50 pages. There are hundreds and hundreds of questions to be answered. The penalty for not answering correctly can include criminal felony charges. It just is not the sort of thing that should be slapped together in a rush.

There is a procedure for an emergency filing. It involves filing part of the bankruptcy petition, and then being allowed 14 days to get the rest done. I have done this in the past prior to the passage of the 2005 “reform” legislation, but since then I have been of the opinion that it’s too hazardous. It’s best to let them garnish away and get the bankruptcy done properly.

The filing of a bankruptcy does stop garnishment – immediately upon the filing of the case. It’s really nice that way. But if you may be vulnerable to a garnishment, don’t let it go. Get to a competent bankruptcy lawyer and get started now.

No, I’m not associated with "Legal Helpers"

I got a fax yesterday from someone who said he had been given my name by an outfit called “Legal Helpers.” He said they were not attorneys and that they were helping him prepare his own bankruptcy without an attorney. He seemed to think that somehow I was associated with them. Please let the record reflect that I am not.

I have nothing to do with them. In addition I want to say that anyone trying to file their own bankruptcy without a lawyer is taking a very serious risk. To anyone who is trying to do that: please don’t rely on anything I have posted on my web site or anywhere else. Nothing written or provided by me is intended for do-it-yourself use, and trying to use my material that way could lead you to disaster. My web pages are nothing but a few general comments, not intended to be any sort of an exhaustive treatise.

Lincoln said it: “He who represents himself has a fool for a lawyer.”

Median Incomes Drop – Judges Require New Checklist

Effective November 1st there are new median income numbers for prescribed by the US Trustee’s office. The only state I have looked at is Minnesota. I don’t know if median incomes rose anywhere else, but here they seem to have dropped significantly. I am now in the process of reviewing the cases I am working on to see if these new numbers will create a problem.

There are a few cases I was hoping to file before the end of this month. For most if not all of them there is still something I need my client to provide, such as a counseling certificate, before the case can be filed. I will be trying to contact all of those clients to emphasize how important it is to not delay. Even if you can get by with the new numbers, the cases will certainly look better if we can use the old pre-November median income table. I have already posted the new median numbers on my Chapter 7 page.

I mentioned in my last post that the judges of the district were unhappy with many of the younger new lawyers who are filing bankruptcies but making all sorts of mistakes. They are also displeased to learn that many clients feel abandoned by their lawyers after the case is filed. The judges and the clerk of court are getting calls from debtors who can’t seem to get their lawyers on the phone. In other cases the clients have never actually met with the person who is supposed to be their lawyer, but have only worked with other staff in that lawyer’s office. To try to remedy some of this the judges have provided a new checklist – one for Chapter 7 cases and one for Chapter 13 cases. It lists what the lawyer is supposed to be responsible for and what the debtors are responsible for. Each list runs about five pages. A copy of both lists can be found on my site under a link labeled “responsibility forms.” I guess I don’t mind the forms, although they do create more work. I just wish they weren’t needed.

Two Days at the Bankruptcy Institute

Just spent all day today and all day yesterday at the Minnesota Continuing Legal Education’s Bankruptcy Institute. For me the best part was this afternoon, a presentation about the preparation and amendment of Chapter 13 plans.

It was also just good to reconnect with some of my fellow bankruptcy lawyers. Things are getting really complicated out there. Some of the judges and trustees were expressing frustration with a number of younger and inexperienced recent law school graduates who have not been acclimated to the level of professionalism that’s required. Apparently there is some concern that clients are being abandoned by their lawyers.

To try to combat this the judges of the district are about to order a new procedure – from my point of view just another form that must be completed before filing. This one is going to be a long list of duties and responsibilities – one list for the lawyer and the other for the client. It’s going to be food for conversation to say the least.

I’ll have more to say about the new form once I have actually started working with it.

More later.

Fall Colors on the Road to St. Cloud

I had a hearing (meeting of creditors) in St. Cloud this past Thursday. I go there fairly regularly, because that’s where the initial bankruptcy hearings are for residents of Wright County – and quite a few of my clients are from Wright County. I’m really not that far from the Wright County border. Particularly since the most recent straightening of Highway 12, getting here from places like Delano, Montrose and Waverly isn’t that hard.

That hearing was fairly early in the morning, and I got to look at the fall colors along I-94 in the early morning sun. I think the low angle of the sun in back of me as I headed northwest contributed to the drama. If those colors weren’t at their peak, it had to be about as close as I’ll ever see. Every time I came around a curve to a fresh view of reds and oranges, I was thankful that I had an excuse to be making that drive.

The hearings in St. Cloud are at the Red Cross Building on St. Germain St. It does not at all look like a court house. In fact I would say it’s a strange place to be having hearings like that. I had my camera in the car and I was thinking of taking some pictures of the place for my web site. By the time I was done with the hearing, however, I had forgotten about taking pictures. I was concentrating on the case to the point that I didn’t remember anything about the picture idea until I was half way back.

The drive southeast from St. Cloud allows one to contemplate the railroad which runs parallel to the freeway. Burlington Northern Santa Fe I think. Until a few years ago there were the remnants of some sort of railroad-related telephone or telegraph lines along that railroad. Every now and then as one drove along an old pole could be seen in the trees or bushes along the railroad with a few wires draped over it and hanging to the ground. Those seem to have all been removed now, because I don’t see them anymore. One time I spent a few minutes on Google trying to see if anyone had posted anything about the history of those old poles and wires, but I found nothing.

As a kid I remember that all railroads had lots of telegraph or telephone wires running alongside. It was explained to me, I no longer remember by who, that those were private railroad communication lines so they could keep track of where the trains were and keep them from running into each other. Obviously they’ve found a better way to communicate and don’t need the wires anymore. I’m curious about it, but I can’t seem to find a write up on this topic anywhere. If anybody knows of a good place to look for such info, please let me know.

Well, that was a good ramble. More later.

Real Clients and Fake Clients, Real Friends and Fake Friends

Earlier this week I was meeting with a client who was in the process of hiring me to represent her in the Chapter 7 bankruptcy process. As we were both signing the retainer agreement, I explained as I usually do at that point that now I was her lawyer. This means she has my permission to use my name if she needs to in the event that creditors manage to reach her by telephone.

These days most of my clients are pretty good at avoiding the calls from creditors by just watching their caller ID. It’s not unusual to be receiving between twenty to fifty calls a day from bill collectors by the time someone finally decides to come see me. I’ve carried on before about how people tend to wait too long and most should have come in sooner. Some of the creditor calls are hard to avoid, however, because they are tricky and disguise their caller ID. One who called me recently had a caller ID that said “Swiss Miss.”

So I tell my clients when they hire me that when one of those creditors gets though on the phone for whatever reason, my advice is to say something like this: “I’ve hired a lawyer to represent me in Chapter 7 bankruptcy. He’s instructed me to not speak with you, to not say anything, except that his name is David Kelly and his number is 952-544-6356. If you have questions you should call him. Goodbye.”

Once they hear this and confirm that it’s true – by calling me – many of the creditors will stop calling. As far as I know there is no legal requirement that they do so until we actually file the case, but as a practical matter they know that they might as well focus their energy elsewhere.

When I went over this with the client who I referred to above, she made a remark to the effect that she wasn’t necessarily very happy about being able to say I was her lawyer. She wished she had not needed to hire me. I replied that, if this was any comfort, there seemed to be quite a few people out there who were happy to claim I was their lawyer even though they had never met me.

Yes that’s right, I have real clients like the woman who just hired me, and I also have fake clients. Besides the calls from creditors to confirm that I’ve been hired by my real clients, I am also receiving calls from creditors who have been given my name by people I have never heard of. There tend to be about two calls a week like that. I guess they must think I’m good if they want to take my name in vain like that.

So I said to my new client that I had real clients and fake clients, and at least she was a real client. To that she replied, “well I have real friends and fake friends.”

I thought my new client’s remark was quite profound. At least it seemed profound to me. I asked her permission to quote her here, anonymously of course.

Guess that Facebook Page is shaping up.

There’s a lull in my phone calls and appointments today – day after Labor Day. Something to do with the first day of school I would guess. As usual my schedule is very busy starting tomorrow and going about two weeks out, but not today.

So I was able to spend part of the morning working on a “Welcome” tab for my facebook page. There’s a free utility for that, which Kim Komando recently recommended. I trust her recommendations, and this one was as described. It consists of a template, actually a choice of templates, where one can fill in graphics and text with a link to one’s web site. I’m pretty satisfied with mine, which you can find by clicking on this bit of text.

I guess I’m a bit shy when it comes to facebook. To me the whole concept is hard to wrap my brain around. That probably has something to do with my core belief about computers, which is that they are nothing but glorified typewriters. It’s not right for a typewriter to do what facebook does.

What to Bring to a Bankruptcy Hearing

At the outset let me say that this post is about the practices that I encounter here in Minnesota, mostly for cases right here in the Twin Cities. If you are from somewhere else, please consult an attorney in your own jurisdiction. Even though bankruptcy is based on federal law and should be about the same everywhere in the country, there are in fact tremendous variations from one locale to another.

Usually the only hearing there is in a Chapter 7 or Chapter 13 bankruptcy is a little proceeding they call the “Meeting of Creditors.” Sometimes it’s also called the “341” or “341 Meeting,” after the section of the bankruptcy code that sets up the hearing process. In this post when I say “hearing,” I mean this meeting of creditors.

This week I have had a hearing nearly every day, except for Friday when I had two. It is usually simple and short, possibly just five minutes, if the lawyer and the clients are properly prepared. But there’s nothing that can delay it worse or mess it up more than not coming to the hearing with all the required documents.

For most of these the required doucments fall into four categories, sometimes five. Here they are:

1. Driver’s license or goverment photo ID for each debtor.

2. Social security card. It’s surprising how many people can’t find this or have lost it a long time ago. If you absolutely can’t find your card, there are some substitutes that are acceptable. In general you can use anything that you have that has your social security number on it, AS LONG AS IT WAS CREATED BY A THIRD PARTY.

So a pay stub would work, since that is created by your employer. So would a W-2. Trouble is that most pay stubs don’t have the social security number on them anymore. It’s getting harder and harder to find a document that has it. Health insurance cards used to have them, but now most don’t. In this day of identity theft, the items that have a social security number on them are disappearing. About the only thing that I can use reliably is a W-2 or 1099. I usully can’t use a tax return, because that’s considered a self generated document – it’s not from a third party.

3. Most recent paystub from employment for each debtor. That is the pay stub that is most recent as of the date of the hearing, not the most recent stub from before the date of filing. The handout from the court which I have posted on my site says to bring “evidence of current income,” but I’ve never seen a trustee ask for anything other than a pay stub. I’ve never seen a person who gets a pension or unemployment be asked to produce evidence of that at the hearing. My experience also is that self-employed people don’t have to produce anything in this category – not at the hearing at least.

4. Bank statements for all open accounts which show what the balance was on the day the case was filed. If the account is open, you have to produce a statement for it. However, unlike the pay stub, this is not necessarily the most recent statement as of the date of the hearing. Usually the statement that comes in the mail at the beginning of the month following the filing of the case will do the trick. You have to be sure, however, that the date of filing is covered in the period included in the statement. In cases where my clients are unable to get a statment that came in the mail, I tell them to go on line or actually go to the bank and get a statement that includes about two weeks before the date of filing and two weeks after that date. Some of the trustees like to snoop through these statements, and I’m concerned that they would be disappointed if we just came in with one page that gave the balance on date of filing.

5. Additional information if the trustee requests it. The above four items or categories of items are all that’s required for more than 90% of the cases I handle. However, every now and then there will be a case where the trustee sends us a letter asking for more information. This could be almost anything, but the rule I follow is that if the trustee wants it, I tell my clients that we better provide it. Often these letters ask that the material be emailed to the trustee several days before the hearing.

Still the questions about jail time for being in debt

I’ve been trying to reassure people that in most cases winding up in jail because of a debt is unlikely. Here’s what I said about it recently on youtube:

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