New Bankruptcy forms

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The bankruptcy court has published some new bankruptcy forms. Below is an article published by the bankruptcy court about the revised bankruptcy forms that have been published for comment by the public. You may also view the article by clicking on the link below.

bank-forms

The Judicial Conference Committee on Rules of Practice and Procedure is asking for comment on the first proposed modernization of bankruptcy forms in two decades. The revised forms, published for comment, are all used by individual debtors and include the fee waiver and installment fee forms, income and expense forms, and the means test forms, replacing previous forms. The comments, submitted by the public, will be reviewed in coming months and will be used to fine-tune the forms.

The public comment period closes February 15, 2013.

There were over 1.2 million non-business bankruptcies filed in federal courts in the 12-month period ending September 30, 2012, where the debts were predominantly personal or consumer in nature.

“We recognized that the debtors filing as individuals may not have the assistance of a lawyer, and they may not be as sophisticated about finances as, for example, a large corporate debtor. Our goal was to make the official bankruptcy forms more user-friendly and less error-prone,” said Bankruptcy Judge Elizabeth Perris (D. Or.). Perris heads an ad hoc group of members drawn from the Judicial Conference Advisory Committee on Bankruptcy Rules and representatives of bankruptcy-related groups. The Advisory Committee makes recommendations to the Committee on Rules of Practice and Procedure about bankruptcy rules and forms. As the ad hoc group looked at revising the forms, they solicited feedback from bankruptcy judges, attorneys, clerks of court, academics, and organizations representing a range of users.

An expert in forms design helped to reformat forms and rephrase questions in the filing package for individuals. An initial challenge was to create forms in ordinary, conversational English. Another challenge was to provide appropriate pointers to information a filer might need to complete the form, such as the median income of their home state, or information on means testing.

The revisions produced forms with a more intuitive layout and a uniform feel, with clearer instructions that explain the process, with prompts and checklists, and with separate, more extensive instruction sheets.

The forms also became longer, but with the additional explanations and instructions it is hoped the information submitted by filers will be more accurate and there will be less need for follow-up by the court to hand-enter omitted data or to correct errors. The more accurate the information electronically filed, the more accurate and flexible the generation of reports.

“In the twenty years since the last forms overhaul, we’ve moved from paper to electronic files,” said Perris. “We wanted to take advantage of available information technology, not only for online fillable forms but for the storage of data. Authorized users will be able to produce customized reports and display information in multiple formats.”

Also, because the new forms make clear at the outset what information will be needed for completion, the complexities of filing for bankruptcy are underscored. As a consequence, more unrepresented debtors may seek representation rather than file pro se.

The ad hoc group is now in the process of finalizing for publication other forms used by individual filers and is drafting forms for non-individuals.

http://news.uscourts.gov/first-revamped-bankruptcy-forms-out-public-comment

 

Increased Use of Bankruptcy Petition Preparers Raises Concerns

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For those who are filing bankruptcy pro se and are using a bankruptcy petition preparer please read below.Below is an article from the federal court’s website regarding bankruptcy petition preparers and pro se bankruptcy filers. You can read it here or click on the link ‘bankruptcy news’ on the right side of the page.

U.S. bankruptcy courts increasingly are concerned with abuses committed by some non-lawyers in the business of helping prepare bankruptcy filing documents for a fee.

A growing number of people who seek bankruptcy protection navigate that challenging process without a lawyer’s help, as so-called “pro se” filers. But federal bankruptcy law also allows them to pay non-lawyers to prepare petitions for them. The law defines a “bankruptcy petition preparer” (BPP) as “a person other than an attorney for the debtor or an employee of such attorney . . . who prepares for compensation a document for filing.”

Many preparers operate within the strict limits the law imposes on them, but some do not.

“We have seen an increase in abuse,” said U.S. Bankruptcy Judge Maureen Tighe in the Central District of California. “The increase in ‘foreclosure rescue’ and ‘loan modification’ services seems to be the source in the past three years. The homeowners are desperate and take advice from the most questionable sources. There is a wide range of BPPs, from those who are well-meaning but still are giving legal advice, to out-and-out fraud perpetrators—and the down-and-out consumer debtor doesn’t know the difference most of the time.”

In Tighe’s district, several petition preparers have been fined for, among other infractions, the unauthorized practice of law and collecting higher petition-preparation fees than the $200 allowed by the bankruptcy court. (Petition-preparation fee limits vary in the 91 bankruptcy courts.)

“I have had debtors who have paid thousands of dollars for assistance that was useless or non-existent,” Tighe said.

A locally focused report recently presented by Tighe’s court includes a troubling finding: “While self-represented debtors receive discharges at a lower rate than represented debtors, the group that did not personally file the cases at the courthouse had their cases dismissed at double the already high rate.”

That finding suggests that reliance on inadequate “representation” by BPPs may be the reason. Earlier studies have shown that the vast majority of debtors referred to as “pro se” filers are, in fact, assisted by BPPs. “A 2003 study by the U.S. Trustees Program reported that only 3 percent of debtors filing were truly pro se . . . At the time of the study, 23 percent of all debtors used a BPP to file,” the bankruptcy court report said. “This may have changed recently due to the presence of self-help desks in every division. Court forms and rules require BPPs to disclose their involvement, but the court has reason to believe that approximately half of them fail to do so.”

In Maryland, a BPP was sentenced to two years in prison to be followed by three years of supervised release for contempt of court for continuing to offer his services after being barred from doing so.

In New Mexico, a BPP was permanently banned from helping debtors after being cited with violations in nine separate cases.

In Colorado, the bankruptcy court imposed more than $42,000 in sanctions against a bankruptcy petition preparer.

And in the Eastern District of Wisconsin, bankruptcy judges have cited four preparers with contempt and referred the cases to the U.S. District Court to determine whether criminal charges should be filed against them. “Unethical preparers who are serial filers are a problem for us,” said Bankruptcy Judge Margaret Dee McGarity in Milwaukee. “We have a pro se help desk staffed by volunteer attorneys, and a designated person in the clerks office to help get all the right papers filed. But we need to provide even more assistance.”

Over the past five years, McGarity’s bankruptcy court, which limits the fee a BPP can charge to $75, has barred seven individuals from preparing petitions. But some preparers do not sign the petitions as required by law, and tell their clients not to tell the court about the help they received.

Eastern District of Wisconsin Chief Bankruptcy Judge Pamela Pepper noted in a memorandum, prepared for a meeting on pro se debtors, that anyone filing papers now must produce a driver’s license, a copy of which is placed in the court file—an effort “to identify people who are filing petitions for someone else.”

It can be a difficult task. “We’ve discovered networks of people—in one, a preparer was barred, then was replaced by her boyfriend, who eventually was barred, only to be replaced by her brother, who was using her formerly incarcerated father’s name and a false Social Security number on the petitions,” Pepper said. “All of these people accept money that the most destitute debtors have to beg or borrow to provide paperwork that is deficient at best and damaging at worst.”

In its fiscal year 2011 report, the U.S. Trustee Program said bankruptcy trustees nationwide had filed 504 actions against BPPs, with a success rate of 98.8 percent. More than $1.9 million in fines were imposed and some $419,000 in fees recovered during that year, the report said.

The U.S. Trustee Program, part of the Department of Justice, features a warning on its website (Justice.gov) for those who might seek help filing for bankruptcy protection.

“Non-attorney bankruptcy petition preparers may type bankruptcy documents with information supplied by the debtor. They may not provide legal services, such as helping you choose whether to file under Chapter 7 or Chapter 13 or identifying your property that is exempt from the reach of creditors,” it states. “Bankruptcy petition preparers may advertise their services under ‘document preparation services’ and similar categories of services, but not under ‘legal services.’ If a bankruptcy petition preparer offers to provide legal services to you or fails to disclose that he or she is not an attorney and may not provide legal services, please report this to a U.S. Trustee Program field office.”

Efforts to thwart fraud by BPPs are hampered in some districts by cultural differences. “Our challenge is exacerbated by the large Latino population who confuses notaries with ‘notarios’ because ‘notarios’ actually can carry out simple legal functions in Central America,” Tighe said. “Some of our BPPs just advertise as ‘notarios’ and reel them in.”

In Arizona, the state Supreme Court certifies document preparers—including BPPs—but such state regulation is not available in all states.

Divorce and Division of Property

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Division of Assets / Massachusetts

A client of mine asked me how assets are divided in a divorce so I referred him to the relevant law. Here it is for anyone else that has the same question.

The equitable division of assets and the award of spousal support or alimony are determined by G.L. c. 208, § 34.

Chapter 208: Section 34. Alimony or assignment of estate; determination of amount; health insurance

[ Text of section as amended by 2011, 124, Secs. 1 and 2 effective March 1, 2012. See 2011, 124, Sec. 7.]

Section 34. Upon divorce or upon a complaint in an action brought at any time after a divorce, whether such a divorce has been adjudged in this commonwealth or another jurisdiction, the court of the commonwealth, provided there is personal jurisdiction over both parties, may make a judgment for either of the parties to pay alimony to the other under sections 48 to 55, inclusive. In addition to or in lieu of a judgment to pay alimony, the court may assign to either husband or wife all or any part of the estate of the other, including but not limited to, all vested and nonvested benefits, rights and funds accrued during the marriage and which shall include, but not be limited to, retirement benefits, military retirement benefits if qualified under and to the extent provided by federal law, pension, profit-sharing, annuity, deferred compensation and insurance. In fixing the nature and value of the property, if any, to be so assigned, the court, after hearing the witnesses, if any, of each of the parties, shall consider the length of the marriage, the conduct of the parties during the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties, the opportunity of each for future acquisition of capital assets and income, and the amount and duration of alimony, if any, awarded under sections 48 to 55, inclusive. In fixing the nature and value of the property to be so assigned, the court shall also consider the present and future needs of the dependent children of the marriage. The court may also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates and the contribution of each of the parties as a homemaker to the family unit. When the court makes an order for alimony on behalf of a spouse, said court shall determine whether the obligor under such order has health insurance or other health coverage available to him through an employer or organization or has health insurance or other health coverage available to him at reasonable cost that may be extended to cover the spouse for whom support is ordered. When said court has determined that the obligor has such insurance or coverage available to him, said court shall include in the support order a requirement that the obligor do one of the following: exercise the option of additional coverage in favor of the spouse, obtain coverage for the spouse, or reimburse the spouse for the cost of health insurance. In no event shall the order for alimony be reduced as a result of the obligor’s cost for health insurance coverage for the spouse.

Find me on avvo.com!!!!!!!!!!

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Avvo.com is a good site to search for attorneys and to ask attorneys questions for free.  I’m on Avvo and I answer peoples questions when I can. I think its a good resource for people looking for an attorney or with legal questions. For attorneys Avvo provides an online profile and, for me, I just like answering legal questions.

The site is www.Avvo.com. I like it. Here is my profile and questions that I’ve answered.

Avvo - Rate your Lawyer. Get Free Legal Advice.

Basic bankruptcy Information

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Here is some basic bankruptcy information for consumers.

The purpose of bankruptcy is to give the person facing overwhelming financial hardship and debt, the debtor, a “fresh start.” When a person is discharged in bankruptcy, he or she is relieved from liability for most debts incurred before the bankruptcy was filed and protected from future collection of those debts

TYPES OF BANKRUPTCY

The Bankruptcy Code is divided into chapters. The chapters that usually apply to consumers are Chapter 7, also known as a liquidation, and Chapter 13, which involves a repayment plan.

In most cases, once the case is filed, the “Automatic Stay” immediately goes into effect. The Automatic Stay means that a bankruptcy filing automatically stops, or stays, and brings to a halt most lawsuits, repossessions, foreclosures, evictions, garnishments, attachments, utility shut-offs, and debt collection harassment. Generally, creditors cannot take any further action against the debtor or the debtor’s property without permission from the Bankruptcy Court while the Automatic Stay is in effect.

CHAPTER 7, Filing Fee $306

Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts.  Debtors whose debts are primarily consumer debts are subject to a “means test” designed to determine whether the case should be permitted to proceed under chapter 7.  If your income is greater than the median income for your state of residence and family size, in some cases, creditors have the right to file a motion requesting that the court dismiss your case under section 707(b) of the Code.  It is up to the court to decide whether the case should be dismissed.

Under chapter 7, you may claim certain of your property as exempt under governing law.  A trustee may have the right to take possession of and sell the remaining property that is not exempt and use the sale proceeds to pay your creditors.

The purpose of filing a chapter 7 case is to obtain a discharge of your existing debts.  If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, the court may deny your discharge and, if it does, the purpose for which you filed the bankruptcy petition will be defeated.

Even if you receive a general discharge, some particular debts are not discharged under the law.  Therefore, you may still be responsible for most taxes and student loans; debts incurred to pay nondischargeable taxes; domestic support and property settlement obligations; most fines, penalties, forfeitures, and criminal restitution obligations; certain debts which are not properly listed in your bankruptcy papers; and debts for death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicated from alcohol or drugs.  Also, if a creditor can prove that a debt arose from fraud, breach of fiduciary duty, or theft, or from a willful and malicious injury, the bankruptcy court may determine that the debt is not discharged.

CHAPTER 13, Filing Fee $281

Chapter 13 is designed for individuals with regular income who would like to pay all or part of their debts in installments over a period of time.  You are only eligible for chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.

Under chapter 13, you must file with the court a plan to repay your creditors all or part of the money that you owe them, using your future earnings.  The period allowed by the court to repay your debts may be three years or five years, depending upon your income and other factors.  The court must approve your plan before it can take effect.

After completing the payments under your plan, your debts are generally discharged except for domestic support obligations; most student loans; certain taxes; most criminal fines and restitution obligations; certain debts which are not properly listed in your bankruptcy papers; certain debts for acts that caused death or personal injury; and certain long term secured obligations.

CHAPTER 11, Filing Fee $1,046.00

Chapter 11 is designed for the reorganization of a business but is also available to consumer debtors.  Its provisions are quite complicated, and any decision by an individual to file a chapter 11 petition should be reviewed with an attorney.

CHAPTER 12, Filing Fee $246.00

Chapter 12 is designed to permit family farmers and fishermen to repay their debts over a period of time from future earnings and is similar to chapter 13.  The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family-owned farm or commercial fishing operation.

CREDIT COUNSELING REQUIREMENTS

Reputable credit counselors can advise you on managing your money and your debts. They may also be able to develop a plan to repay your debts.  Under the changes to the Bankruptcy Code that took effect October 17, 2005, you are required to take two short credit counseling courses, one before you file bankruptcy, and one after you have filed.

Getting our Legal Documents in Order

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A client recently asked me to draft a new will for her. She currently has a will that another attorney put together for her years and years ago. I reviewed it and in form her will is fine. However, the circumstances of her life have changed and her will no longer expresses her wishes.  We decided to draft a new will.

After talking to my client we found that she needs more than just a will. She needs a few legal documents. We discussed the need for a will, a health care proxy (what most people refer to as a “living will”), and a durable power of attorney.  These are all documents that everyone should have on file and should keep up to date. Another document that I think is important to have is a letter of instruction.

The letter of instruction is a very simple idea that I came across in a law guide that I uploaded to my computer when I bought some sample form from U.S. Legal Forms, Inc. They put together a “Legal Life Organizer” which I found to be a helpful guide for anyone that wants to get their legal documents in order.  U.S. Legal Forms, Inc. is a good resource. It is helpful in getting yourself organized for sure, but it is my recommendation that anyone putting together a will, health care proxy, power of attorney, trust, or any legal document that you should always consult an attorney. These are all documents that will have a serious effect on your life, a serious effect on what will happen if you become incapacitated, and your end of life planning.

In preparing these documents for my client I realized that I do not have my own will. I don’t have a health care proxy, a power of attorney, a trust, or letter of instruction. As an attorney you would think that I would have already put these documents together for myself, but I never have. I’m young and if I do die any time soon there will not be much left behind. So why bother?

Well, what if I die in an accident and there is a wrongful death suit that recovers a large amount of money? I need a will so that the money recovered goes where and to who I want it to go to. I may, for example, want any money recovered to go into a trust to benefit my nieces and nephews.

In a similar scenario, what if I am in an accident and I become incapacitated?  I need someone who can act as my “attorney” and handle my affairs while I’m incapacitated. So I also need to create a durable power of attorney and appoint someone to act on my behalf.

The health care proxy is something I have been meaning to create since the Terri Schiavo case made headlines across the country around 2005. Through a health care proxy I can express my wishes if I become unable to speak and I can put someone in charge of making the final decision.

As far as a letter of instruction, I think it is simply helpful to those who you leave behind. Death is not a matter of if, but a matter of when. When you do die, you want to make the process of dealing with your death as easy as possible for those that you leave behind. A letter of instruction is not a legal document. It is something that you can update whenever you want. It is a good way of saving people the time of digging through your documents and files.  When you write it you can identify where all your important documents, titles, financial papers, insurance policies, investments, and tax paperwork are kept. You can leave a contact list of your doctor, lawyer, accountant, stock broker. You can add any other instructions as well as burial instructions.

I’m glad my client came to me to put together these documents for her. I enjoyed helping her get her legal documents in order and I know it gave her some comfort and quieted her anxiety about these issues. I’m also glad that in putting everything together for her I remembered that I need to do this too! So as I create a simple will, health care proxy, power of attorney, and letter of instruction for myself, I feel comforted as well. I’ll have my legal documents in order!