The Lack of Counseling in Credit Counseling

By Sam Turco on January 31, 2018 Posted in Chapter 13, Chapter 7, Credit Counseling

Before a person can file bankruptcy they must take an approved credit counseling class and their attorney must file a Certificate proving the class was taken with the court. The idea is to make sure that consumers are being educated about alternatives to bankruptcy, and when this new requirement was introduced in 2005 there was hope that such a class would significantly decrease the number of bankruptcy cases being filed each year in the United Sates.

Well, it’s been more than 12 years since these classes have been required, and I have yet to meet a single person who chose not to file bankruptcy because of it. I suppose there probably is a person out there somewhere who was persuaded to avoid bankruptcy, but I can’t name a single person in the thousands of people I have met since 2005 that actually

Borrowing Money to File Bankruptcy

By Sam Turco on December 17, 2017 Posted in Chapter 7

I meet lots of people who desperately need to file bankruptcy, but they lack the money to file. A typical Chapter 7 case costs $1,300, and paying the fee is probably the biggest stumbling block to filing a case.

A company called BK Billing provides an answer: borrow the money. Under the BK Billing model, bankruptcy attorneys divide the Chapter 7 case into two parts: Services rendered before the bankruptcy petition is filed with the court, and services provided after the petition is filed. In bankruptcy lingo we refer to this as pre-petition and post-petition services.

Attorneys using the BK Billing system charge clients a small amount for pre-petition services, typically from zero to $500, to get a case filed. They limit pre-petition services to filing an “emergency petition” that reports nothing more than a list of the creditors. Then, after the case is

Prosecutors Fear Use of Digital Signatures in Bankruptcy Cases

By Sam Turco on October 17, 2017 Posted in Chapter 13, Chapter 7, Digital Signatures, Fraud

Bankruptcy courts across the country have embraced the electronic filing of court pleadings since 2001. This system, known as Electronic Case Files or “ECF”, allows attorneys to sign and file documents with an electronic signature instead of using “wet ink” signatures on paper. The system is a great improvement over the older paper file system it replaced. Back in the old days we used to make five photocopies of a bankruptcy petition (one for our files, one for the Trustee, one for the US Trustee, one for the national archives, and one for the court) and then rush to the federal courthouse to file the case before a garnishment or foreclosure took place. ECF made it possible to file cases and motions 24 hours a day and almost every day of the year. It also made it possible for anyone to view court

Nebraska Appeals Court Issues Major Opinion on Vacating Default Judgments

By Sam Turco on October 8, 2017 Posted in Default Judgment, Statute of Limitation, Vacating Default Judgments

Most collection lawsuits result in judgments obtained by default. A Default Judgment is awarded when the defendant fails to file a written response to the lawsuit within the required time period, typically 30 days. Over 90% of collection lawsuits filed in Nebraska result in a default judgment.

The concept of allowing default judgments seems fair enough. If a debtor fails to respond to the lawsuit it is pretty clear they probably owe the money. The problem with default judgments, however, is that in a significant portion of these lawsuits the debtor never actually receives a copy of the complaint. There are a variety of reasons for this. Some debtors evade service of summons by refusing to answer the door when a sheriff comes to deliver the court summons. Many debtors are simply not home when summons are delivered because they are working. Most commonly, the

National Association of Consumer Bankruptcy Attorneys Become More Local

By Sam Turco on May 8, 2017 Posted in Chapter 13, Chapter 7

I belong to the National Association of Consumer Bankruptcy Attorneys (NACBA), the only national organization devoted exclusively to serving consumer bankruptcy attorneys and their clients. The NACBA has over 4,000 members located in all 50 states.

The NACBA is a resource I use every day in my practice. Their website is filled with useful information for attorneys and for people wanting to learn more about the bankruptcy process. Every single day I receive emails from the NACBA Listserv where attorneys ask questions and receive answers from member attorneys throughout the nation.

NACBA’s Listserv is a vital resource for me. It allows me to ask questions to the brightest consumer bankruptcy attorneys in the nation. Sometimes I ask technical questions and other times I just want an opinion about how others have approached

Closing the Business: A Step-By-Step Instruction

By Sam Turco on April 11, 2017 Posted in Business Bankruptcy, Chapter 13, Chapter 7, Lease Agreements

The writing is on the wall and your company must close. Despite throwing everything you had into making the business successful, it’s not working. The funding is depleted. You have drained all your personal resources, emptied the retirement nest egg, mortgaged the home and you are out of cash. You have talked to all the right people–the bankers, the accountants, other business owners–but no one can provide the miracle cure. Payroll is due again, and your not sure where the cash will come from. It’s time to cut your losses. It’s time to close the doors, and you know it.

Somehow you miscalculated the market and you committed yourself to large fixed expenses–rent, equipment purchases, marketing campaigns–that cannot be cut quickly enough. The business is generating cash, but not profits. If you could start all over you would do it

Student Loan Discharged Despite Zero Monthly Payment Option

By Sam Turco on February 20, 2017 Posted in Chapter 7, Student Loans

The Eight Circuit Bankruptcy Appellate Panel (8th BAP) affirmed the discharge of a $27,000 of federal student loan debt despite the fact that the debtor, Sara Fern, was eligible to pay nothing in an Income Based Repayment (IBR) plan. See In re Fern.

The debtor is a 35 year old single mom of three children, ages 3, 11 and 16. She originally sought a degree as an accounting clerk, but after being unable to complete the required coursework she changed studies and obtained a degree as a beautician. After graduating she attempted to start her own business and rented space in a tanning salon, but her efforts failed. For the past 6 years she has worked for the same employer earning $1,506.78 of take-home pay. She also receives food stamps and rental assistance but does not receive any child support. Her income has

Was your bankruptcy case prepared in India?

By Sam Turco on January 13, 2017 Posted in Chapter 13, Chapter 7

Here is the advertisement spam in today’s inbox:

Attorneys Get Started with Team India

Published by Actuit India on 20^th January 2008

Hire Bankruptcy Petition Preparation Services

Since 2008 Actuit has a disciplined team of paralegals to help your bankrutpcy practices. Our digital outsourcing process make sure that team is efficient with your time and you get the best of the outsourcing experience. We make sure that you get benefited from the highest quality system design we have to offer. So that each new client experiences the best that our offshore expert paralegal has to offer

We do limit the number of clients handled by each team.

Save time to manage your bankruptcy practice, spend less & watch your practice grow while we work as your paralegal back office form New Delhi, India.

Is that how you

Must a Debtor’s Attorney Personally Meet With The Client?

By Sam Turco on January 6, 2017 Posted in Uncategorized

UNLV law professor Nancy Rapoport asks a series of questions in her latest article published in www.ConsiderChapter 13.org.

To what extent must a debtor’s attorney personally meet with the client prior to filing the petition on behalf of the client, and how meaningful should the meeting be?

More specifically, how much can the attorney safely and ethically delegate to non-lawyer staff: Intake interview? Filling out forms? Obtaining and reviewing documents like mortgages and paystubs? Telling the client that s/he needs to file chapter 7 or 13? Telling the client what the attorney’s fee will be and getting the client to sign the retainer agreement? Going over the petition and schedules with the client and getting the client’s signature? If the attorney is reviewing the non-lawyer’s work along the way but does not personally meet or talk with the client, is that adequate

HAMP Program Expired: Now What?

By Sam Turco on January 2, 2017 Posted in Chapter 13, Foreclosure

The Home Affordable Modification Program (HAMP) expired December 31st. After eight years of assisting underwater homeowners save their homes from foreclosure, the program has now ended.

Approximately 10 million homes were lost to foreclosure in the past decade. HAMP helped lessen the mortgage meltdown, but its job is now complete. Foreclosure sales have diminished and home prices are now almost equal to the market prices just prior to the housing market bubble bursting in 2008.

So now what?

According to the folks I chat to in the foreclosure industry, expect mortgage service companies to tighten standards and foreclosures to gradually increase during 2017.

Without HAMP, homeowners seeking loan modification will be left at the mercy of lenders.” Dillon Graham, Florida foreclosure defense attorney.

The Consumer Financial Protection Bureau has issued lending guidelines to help reduce the number of foreclosures in the future, including an emphasis on