Disclosure/Disclaimer Statement, Make sure you have it!

            As a bankruptcy petition preparer you must have a disclosure statement.  This disclosure statement is to state that you as a bankruptcy petition preparer are not an attorney. That as a non-attorney you cannot give legal advice or practice law.  This statement may also contain descriptions of different examples of legal advice a bankruptcy petition preparer are not authorized to give. Also it will have the maximum fee amount allowed by the district court in which you are filing in as per 11 U.S.C. § 110. Both the debtor and the bankruptcy petition preparer will then sign this statement.

Creditor list, What's that?

Creditor list, do you know what it is?

First off, lets’ talk about what a creditor is. A creditor is someone that you owe money too. A creditor list is simply a list of all those creditors you owe and their mailing addresses. A creditor list will sometimes also be referenced as creditor mailing matrix, creditor matrix, or list of creditors. When you file a bankruptcy it is your responsibility to make sure you list all of your creditors and their correct mailing address. This is because the Bankruptcy Court relies on your creditor list to send out all the notices regarding your case to those creditors. For example a notice the creditors will get is the meeting of creditors, also known as a 341 Hearing.

If you fail to list a debt in your bankruptcy, it will not be discharge. Now if you do list the debts on your bankruptcy and incorrectly identify the creditor on your mailing list, that creditor might have grounds to object your discharge, due to their lack of notice on your bankruptcy.

Another big important situations to remember, is if a creditor does not receive notice of your bankruptcy they may continue to garnish your wages and/or collect on your debts.   

Even if you do manage to make sure everything is correct on your creditor matrix you still have to file with the court. Now I, myself cannot give you a step by step directions on how to file with the court. This is because each bankruptcy court has its own rules and procedures on how a creditor matrix is properly prepared and filed. You need to follow the court’s specific formatting instructions when preparing the creditor matrix. This is to ensure your bankruptcy will be processed properly.

Remember if you fail to prepare or file your creditor matrix it could cause delays in your bankruptcy. 

Maximum allowable charge!

Bankruptcy Code 11 U.S.C § 110 regulates bankruptcy petition preparers who are not attorneys and assists debtors in filing a voluntary bankruptcy petition or helps in preparing any forms filed in connection with such cases. These guidelines and regulations are the rules of conduct for bankruptcy petition preparers.

11 U.S.C. 110 does not however specifically suggest the maximum amount Bankruptcy Petition Preparers can charge per each petition they prepare. Each Bankruptcy Court usually designates a max amount that a preparer in that district can charge to prepare a bankruptcy petitions. However, some Bankruptcy courts DO NOT designate a maximum amount that a preparer can charge. If that Bankruptcy Court does not designate a maximum amount that a preparer can charge, NABPP recommends that   charging $200.00 is usually a safe amount.  Additionally, the fee amount that the bankruptcy petition preparer can charge is separate from the filing fee that the client must pay the Bankruptcy Court to file their petition. Remember, the preparer can only get paid to prepare the bankruptcy; the preparer cannot file the petition for the debtor. The preparer cannot accept any other fees for the preparer dealing directly with the preparation of the debtor’s bankruptcy petition. The filing fee for the debtor’s bankruptcy is to be paid directly to the district court at the time of the filing.

Below are some examples of what different Bankruptcy Courts allow to be charged.

-          The Northern District of California maximum allowable charge for a bankruptcy petition preparer to charge is $150.

-          The Eastern District of Michigan maximum allowable charge for a bankruptcy petition preparer to charge is $100.

-          The Northern District Ohio maximum allowable charge for a bankruptcy petition preparer to charge is $125.

As you can see each District has a different maximum allowable amount to be charged. Remember, if the Bankruptcy Court in your area does not designate a max amount a preparer can charge, then $200.00 is usually a safe amount allowable by the court. However, to be sure that the Bankruptcy Court in your area does not give a max amount you can charge, make sure you do you research so you do not have problems and are forced to give a certain amount of your hard earned money back to the debtor. 

Assets Assets Assets!

Assets.

First let’s look at the definition of asset, which is an item of value that is owned by a person, company, etc.

Now let us look at how the definition changes when it is involved with a bankruptcy. It is still an item of value owned by a person, company, etc. but is now something that will be liquidated to pay off creditors before all the debts are wiped clean.

It is now time to look at why assets are so important in a bankruptcy. In order to get a discharge you must be honest and open when it is time to list everything on your bankruptcy papers, from assets and all of your debts. And again, this is because if you do have assets that can be liquidated and dispersed amongst your creditors then the Trustee needs to know this.

There are bigger problems than not getting a discharge when you don’t disclose your assets in a bankruptcy. You will have to turn over the property by law, so the Trustee can sell them and pay creditors. If your Trustee finds the assets after the fact of being granted a discharge, the Trustee then can ask the court to revoke your discharge. This can happen even after one year after the date your debts were discharged. Also if you do not disclose assets then any debts that were listed in your bankruptcy when  your discharge was denied or even revoked will still be owed.

Last but not least and certainly worse, is you could be criminally charged for not disclosing assets. (see section 11 USC 512)  When you sign your bankruptcy schedules listing your assets under penalty of perjury this is a serious matter. When stating that those papers are true and accurate, the penalty for making a false statement or concealing property (assets) is a fine of up to $500,000 or imprisonment for up to five years, or both.

With this being said, think twice before you decide to not disclose/hide assets when filing for a bankruptcy.  

This is not intended as legal advice, if seeking legal advice please consult your legal advisor.

Bankruptcy, Cars, Reaffirmations.... OH MY!!

Over the years we have had many questions on how to go about vehicles in a bankruptcy. So we have done some research on the best place to send you, that breaks it all down. With this website you can send your clients to. Remember this is not legal advice coming from you. AS a Preparer YOU may NOT give legal advice. But this website you can use as a tool. http://www.nolo.com/legal-encyclopedia/car-chapter-7-bankruptcy-29608.html

Check it out! It will be worth your time!

"Skeleton Filing" the Basics

There is some information on a certain type of filing called a "skeleton filing" or emergency filing that we feel you should know.  To start off a "skeleton filing" is the minimum documents necessary to file a bankruptcy.  The minimum documents needed are as follows:

1. the petition, 

2. credit counseling, 

3. and the creditor matrix.

With this being said we have seen preparers who have filed given their clients blank documents to file. We would not do not file  blank documents, for example the schedule F and the statement of intention.  If they  do file the blank documents along with the minimum documents you will have to file amended forms for each of the blank forms.

Instead just filing the three basic forms and the filing the other documents within the 15 days allowed by the Court when you are finished with them.

The plus side of filing a skeleton bankruptcy is you are able to get the case number, notice of stay to send to the creditors on the matrix, and your name and address on the file. 

Where on the forms should a secured item be placed?

Secured property such as motor bikes and 4 wheeler or automobiles can be placed on schedule B as the property of the debtor. Keep in mind that if there are moneys owed on the property those creditors should appear on schedule D.