Due to the decline in incomes of families living in 25 states and the District Of Columbia, the income limit used for the “first cut” Bankruptcy Means Test is being reduced for filers living in those states, effective, November 1, 2009.  For example, in Florida, the new limits are reduced by $1,242 for a single earner and by $2,115 for a family of four.

The Chapter 7 income limit is the income, below which, bankruptcy filers pass the all important Means Test.  While passing this test does not guarantee a discharge of debts, it is the first test qualifying a debtor to petition the bankruptcy court for discharge.

The income limit is set at a different level in each state and is based on the median income level in the state in which the debtor resides and the number of family members.

The following link will take you to the official U.S. Justice Department web listing of the new income limits.

http://www.justice.gov/ust/eo/bapcpa/20091101/bci_data/median_income_table.htm

At The Beach Paralegal Services does not provide legal advice.  We work only under the supervision of licensed attorneys.  This blog is only for informational purposes and does not construe legal advice.  Please consult your attorney directly for all legal advice in this or any other bankruptcy matter.

At The Beach Paralegal Services provides bankruptcy attorneys expert and cost effective petition preparation and court filing assistance.  Visit us on the web to learn how we save our attorneys time and money.

Filing for bankruptcy is a very serious undertaking.  The laws are complex and the penalties for knowingly misrepresenting required information are very severe and unforgiving.  Fines of up to $250,000 and prison sentences of up to 5 years are possible.

Your bankruptcy attorney will advise you of your responsibility and guide you in providing answers to the detailed personal and financial data that must be disclosed in your bankruptcy petition.  Your attorney will ask you to fill out a long questionnaire and to make copies of numerous personal documents.  Without your complete cooperation in collecting this data, he (she) cannot complete the petition in a manner satisfactory to the Bankruptcy Trustee and the Court.

The following tips from the files of the FBI, will help you understand your legal responsibility in providing information to your bankruptcy attorney.

1. All creditors must be listed, even the ones you intend to pay after the case is filed.

2. Many assets are protected from being seized by the bankruptcy court, but only if they are listed. It is a crime not to list all property.

3. Part, or all, of any tax refund due for the tax year a bankruptcy case is filed may be required to be turned over to a bankruptcy trustee. Any refunds that are due for previous years may be required to be turned over.

4. You must list all business information if you are self-employed. If you are in business you must list all personal and business debts, assets and income.

5. All income must be reported, including Social Security benefits, family support, alimony, unemployment, and pensions.

6. Intentionally incurring debts with the intent not to pay may be a crime.

7. You should maintain payments on all secured property that you wish to keep that could be repossessed before the case is filed. This includes house payments, car payments, furniture payments, equipment, and other items used as collateral.

8. The court may disallow a bankruptcy if you misrepresent any facts or otherwise lie on the papers filed in court for the bankruptcy.

9. Bankruptcy stops all bill collectors. Creditors, including tax collectors, are barred from attempting to collect any debt from you the instant the petition is filed. This protection is permanent for all discharged debts. Bankruptcy does not stop any criminal proceeding or government regulatory proceeding.

10. Bankruptcy does not clear up a credit report. It may be reported on credit reports for 10 years.

11. You cannot dismiss a Chapter 7 case without court approval. You can voluntarily dismiss a Chapter 13 case anytime.

12. A secured creditor may add the attorney fees they incurred to the balance owed on the property. This may happen even if you are not behind on payments at the time the bankruptcy is filed. Most mortgages and other loan documents provide that reasonable attorney fees are allowed and will be added to the balance due on a loan.

13. Bankruptcy crimes carry a punishment by, among other things, imprisonment up to five years. It is a bankruptcy crime to: conceal property from the court or bankruptcy trustee; knowingly and fraudulently make a false oath or account; knowingly transfer or conceal property to defraud creditors; conceal, destroy, mutilate, or falsify records or documents; and file a bankruptcy petition to deceive or defraud.

(13 Tips From The FBI written by Rachel Lynn Foley, Kansas City Missouri Bankruptcy Attorney)

At The Beach Paralegal Services does not provide legal advice.  We work only under the supervision of licensed attorneys.  This blog is only for informational purposes and does not construe legal advice.  Please consult your attorney directly for all legal advice in this or any other bankruptcy matter.

At The Beach Paralegal Services provides bankruptcy attorneys expert and cost effective petition preparation and court filing assistance.  Visit us on the web to learn how we save our attorneys time and money.

If I file bankruptcy, can I eliminate all of my credit card debt?  That question is on the mind of hundreds of thousands of Americans swamped by heavy credit card debt.  Most of these people never intended to end up this way.

Often some unplanned event came along like a job loss or a medical emergency. In order to survive, they often used credit cards to bridge the gap.  Suddenly they find themselves in trouble with rising interest rates, rising living costs and decreasing earnings.  Looking for a solution, they ask, “is bankruptcy the answer?  Can I wipe out those credit cards and get a fresh start?”

The answer is yes, no, and maybe.  Great! That didn’t help much.  Since the bankruptcy laws were revamped in 2005, the subject is much more complicated.  Many times, a bankruptcy will eliminate all or most of that debt.  There are exceptions, however, that must be evaluated by a bankruptcy attorney who will look at your entire financial situation in light of the extremely complicated U.S. bankruptcy code and the specific requirements of the state in which you live.

Important factors include how long you have lived at your present address, when and for what purposes you obtained your debt and factors relating to your other expenses and income.  Does this mean that you should forget the whole idea?  No way!  The law provides for relief for those who are underwater financially.

If you are in that position, see a bankruptcy attorney for an expert evaluation.  Understand your options and then make the choice that is best for you and your family.

At The Beach Paralegal Services does not provide legal advice.  We work only under the supervision of licensed attorneys.  This blog is only for informational purposes and does not construe legal advice.  Please consult your attorney directly for all legal advice in this or any other bankruptcy matter.

At The Beach Paralegal Services provides bankruptcy attorneys expert and cost effective petition preparation and court filing assistance.  Visit us on the web to learn how we save our attorneys time and money.

126,434 bankruptcy cases were filed in July, 2009.  That’s the highest number in 5 years.  For the year so far, new filings are running about 37% ahead of last year.  More  on this story

At The Beach Paralegal Services provides bankruptcy attorneys cost effective petition preparation and court filing assistance.  Visit us on the web to learn how we save our attorneys time and money.

Cross-collateralization is a term used when the collateral for one loan is also used as collateral for another loan.  This issue can be important to a debtor filing for protection under U.S. bankruptcy law.

Cross-collateralization is often used by credit unions to secure debt that is usually presumed to be unsecured debt.  If a person has a home mortgage or an automobile loan with a credit union and a credit card with the same credit union, there may be cross collateralization language in the contracts

If this is the case, then it may not be possible, in a bankruptcy case, to retain and reaffirm the home mortgage or auto loan and have the credit card debt discharged.  The credit card debt may be viewed as secured debt.

The debtor’s loan contracts should be reviewed by his (her) bankruptcy attorney to determine if this is an issue or not.

At The Beach Paralegal Services does not provide legal advice.  We work only under the supervision of  licensed attorneys.  This blog is only for informational purposes and does not construe legal advice.  Please consult your attorney directly for all legal advice in this or any other bankruptcy matter.

Don’t wait until the last minute to speak to your bankruptcy attorney about the timely filing of your bankruptcy petition. Careful planning on your part can eliminate major headaches. Read more…

A friend of mine recently lamented that she did not know the status of her bankruptcy case and had problems getting callbacks or answers from her attorney or the staff. There were, however, no problems in receiving calls from the creditors.

As you know, there are deadlines to be managed from the moment the client enters your office until the bankruptcy is officially discharged by the court. Is your current staff up to the task?

Are each of your bankruptcy cases moving along as expected? Do you have a method for tracking each case’s progress? Do you currently rely on your legal assistants or paralegals to monitor each case as to deadlines and regular communication with your client? If so, how do you know this work is being performed properly?

The solution to mediocre staff performance can be found by the utilization of a Virtual Bankruptcy Assistant (“VBAs”). VBAs are highly trained, off-site bankruptcy assistants. Many VBAs have worked as legal assistants or paralegals and have taken their legal knowledge to the next level by training as a VBA.

When a client enlists your services to prepare a bankruptcy petition for them, they expect their case to move along efficiently and expeditiously. They are, after all, anxious for the creditor calls to stop.

Are you assisting them properly in this regard?

If not, take a moment to think about how a VBA can reduce not only your workload but your stress level as well. And, oh yes, your client will be served by a professional assistant who understands the meaning of “excellent customer service”.

In these tough economic times, it is important to understand how to grow your bankruptcy law practice without the usual staff expenses of health insurance, sick leave, 401ks, vacation pay, and on and on.

With the advent of computers, it is possible now to work with debtor bankruptcy assistants (or “Virtual Bankruptcy Assistants”) offsite.

Just how does this work?

After your first meeting with a potential bankruptcy client and after you have collected your fee, your client will begin to gather information for the Client Intake Sheets you have provided. (Please visit our website and click the “Resources” tab to download a free set of Client Intake Sheets.)

After your client has returned the completed Client Intake Sheets (along with the required attachments), you will fax or e-mail the documents to your Virtual Bankruptcy Assistant who will begin drafting the bankruptcy petition.

A Virtual Bankruptcy Assistant works quickly and efficiently in inputting the client’s information into the bankruptcy schedules. Instead of working in the firm’s office, the assistant works from the privacy of his or her home. Few interruptions. Faster turnaround.

A good Virtual Bankruptcy Assistant will prepare a summary for the attorney as she prepares the petition. The summary will outline for the attorney the additional information that is required from the client in order to complete the petition.

Once the petition is complete, a draft copy will be forwarded to the attorney for review. Any changes will then be reflected in the petition and a final will be forwarded to the attorney for filing with the court.

Consider utilizing a Virtual Bankruptcy Assistant to prepare your bankruptcy petitions. Your clients will be better served and you could realize a positive impact on your firm’s bottom line.

Career buster? Very possibly.

While working as a paralegal in the area of Professional Regulation, I was well aware of how the Florida Bar views an attorney’s mismanagement of a client’s trust account (whether intentional or not). During my tenure in this practice area, my attorney and I worked with several attorneys whose license to practice was on the line. Some were just plain ignorant of bar rules and others blatantly utilized the clients’ funds for varying purposes.

In Florida, when an attorney fills out his CLE statement and forwards the same to the bar in Tallahassee, he is attesting to the fact that his or her trust accounts are in order. Very few attorneys that I have spoken to regarding this understood clearly what they were executing. The Florida Bar, however, takes this attestation very seriously and expects each and every attorney to understand and abide by the rules.

Please understand that all it takes for the bar to demand an audit of your law firm is a single complaint from a client. Seriously. If you have been co-mingling trust account funds with the funds of your Operating Account, your bar license could be revoked - permanently. In Florida, the bar enlists the aid of a professional management firm (LOMAS) who has years of experience in auditing law firms. They know what to look for.

LOMAS is quite adept at spotting not only trust account issues but whether or not your files are opened and closed properly and much, much more.

Now, a word of warning to all legal office personnel:

Are you currently responsible for managing your law firm’s trust accounts? Perhaps you work for a sole practitioner who requires this of you. Have you attended trust account management classes through your local bar? If not, why not?

If you’re currently managing your law firm’s trust accounts and the funds have been mismanaged somehow or co-mingled with the operating account, do you feel protected because you are under the supervision of your attorney?

Think again.

In a recent issue of the ABA Journal, it was reported that a Florida attorney had not only mismanaged her clients’ funds, but had neglected to set up trust accounts to manage the same. She has already lost her Florida bar license and is also facing felony charges which would amount to her serving approximately 40 years in prison.

What’s even more surprising is that her paralegal is facing the same charges.

At the moment, the attorney and the paralegal are playing the “blame game” and all the facts of the case are still coming to light.

As a legal staffer, it is important that you understand the responsibility you are undertaking in managing your law firm’s trust accounts and/or operating accounts. Before you consider accepting this responsibility, your attorney should agree to and paying for your attendance at one of your state bar’s seminars on trust accounting.

There is no excuse for ignorance. Simply “do your homework” before agreeing to perform tasks that might place a big black mark on your career.

I received an e-mail in early September from a very nice lady who happened to be the Director of Marketing for an organization in one of my niche markets. She saw one of my blog posts on one of the search engines entitled, “Whaddya Mean You Missed the Deadline?” and asked me if she could use it in her newsletter. Of course I said, “Yes!” This particular newsletter reaches approximately 14,000 readers.

Well, the newsletter went out and my traffic tripled overnight! The opt-in form on the front page of my niche website was filled out by almost everyone who visited. The freebie offered as a “thank you” for filling out the form was a sample chart I’ve used in the past to organize case information.

The point to this blog post is (how to build traffic to your website quickly):

1. Set up a blog and start writing.

2. Be sure to use relevant keywords in each of your blog post’s titles and within the body of each blog post.

3. Google indexes blogs much faster than regular ‘ol websites, so blog 3-4 times per week.

4. If you utilize WordPress for your blogs, download the All in One SEO Pack plug-in so that you can properly set up your titles and keywords for each and every blog. It’s important for Google indexing purposes.

5. Offer lots of value in free content on your website and blogs so that you build a high level of trust with your readers. Your readers will bookmark your site and will return again and again.

6. Keep your content fresh, relevant to your niche and updated frequently.

7. Now, find blogs in your particular niche (high and low page rank) and place comments on several of them.

There’s so much more to building traffic, however, these are great starts. Implement them today!