Several times in the last few weeks I have only gotten important phone calls because I happened to be home during the customary workday. Two of these calls were from health care providers. The third was from a heat and air contractor. Neither of the three would admit to having any contact number for either my Husband or I other than our home phone number.
That is a seriously bad business practice. Now, granted, I only get a basic contact number from someone when I am setting an initial appointment; but two of the three of these phone calls came from people with whom either my Husband or I had an existing business relationship.
Well, not anymore. Two of the three have just lost our business, and I am giving serious thought to how best to insure I maintain good contact information with all of my clients.
I get calls (or emails) regularly from people who want to know how much I charge for a bankruptcy.
Oh, somewhere between $1,000 and $25 million. Ok, so I don’t actually say that. It is, however, a reasonably good answer. Ok, ok, so I’ve never actually anything close to $25 million; but then, I’ve never represented Enron.
The price to file a bankruptcy is going to depend on a number of things, and how much money you owe really isn’t one of them. Basically, I try to figure out how much time I am gong to have to spend to get your case prepared, filed and finalized. I then quote a price based on that conclusion.
Frequently, these phone calls also include the comment that the caller has talked to another attorney; and that attorney has told the caller that he will have to file a Chapter 13 bankruptcy — because he makes too much money.
I haven’t figured out yet how other attorneys can do that. It takes me well over an hour to do even a rough run through of the full means test. There is no way I could even begin to figure out whether a caller could pass the means test or not over the phone. My guess is that this telephone pre-screening is being done either by attorneys who are using income as the almost exclusive factor in determining access to a Chapter 7 Bankruptcy or they think they make more money doing Chapter 13 filings and are looking for a way to herd people in that direction.
I find that most of the people who call me really want to file a Chapter 7 and virtually all of them are eligible for a Chapter 7 — if I put enough work into getting them through the Means Test. I do, of course, charge for that; but not nearly as much as spending 5 years in a Chapter 13 will wind up costing.
I get calls frequently from people whose income is well below the poverty level (in many cases is Social Security only) and think they need to file for bankruptcy, because somebody sued them.
Sure, in some cases they are right. However, you don’t want to file for Bankruptcy until you are through getting into trouble. If you are still incurring significant health care costs, if you are seriously underemployed (especially without health insurance), then, you may not be through getting into debt.
Any debt you incur after you file for Bankruptcy will not be included in your discharge. That means you will still have to pay it, and once you have filed a Bankruptcy, it will be at least several years before you can file another and get a discharge.
There are ways for very low income people to protect what they have even if they are sued. So, sometimes, I have to tell people that they are better off learning how to protect their assets from creditors and wait a while until they file.
Most people who have read much of anything about Bankruptcy law in the last few years have heard about the much vaunted Means Test. Personally, I don’t think it is all that big a bugaboo. It does, however, eat time and documentation, require significant amounts of attorney time and expertise; and, as a general matter, drive clients up the nearest wall.
So, my favorite Means Test sleaze is to not file one. Just don’t bother. Leave the blessed thing blank. You see, 707(b)(2) only applies to debtors whose debts are primarily consumer. So, if your debts are primarily NOT consumer — no Means Test. You check the little box and go on. The problem for most people is that their mortgage balance is sufficient to tilt them over to the consumer side of things, but occasionally, that doesn’t happen.
So, every once in a while I get to file a bankruptcy and just skip the Means Test. That is my kind of fun.
The centerpiece of the 2005 Bankruptcy reform act is something called the Means Test. It is a bit of an accounting nightmare, but it really doesn’t limit access to the Bankruptcy courts very often. It just chews up time and money. The great thing about the means test is that you only have to complete the whole thing if you are over median income. Congress chose to define high income filers as those who make more than the median income for their household and family size in their home State.
That means that if 50.1% of the households of your size in your State make less than you do, you are a high income filer for purposes of the Means Test. Except, if you are high income, why are you considering Bankruptcy?
Consider this little fact that I just found in a USAToday.com news story about recent Congressional action concerning school lunches. In Oklahoma 66% of all school children qualified for free or reduced price school lunches. That is right, 2/3 of all school children in Oklahoma come from households so poor that they qualify for subsidized lunches. Kind of shifts the parameters on high income a bit.
Several times a week I get phone calls that go a lot like this:
Caller: I need to file for Bankruptcy.
Caller: My house is in foreclosure, and I can’t afford to keep it.
Me: Ok. So, why do you need to file for Bankruptcy?
I’ll cut to the punch. Most foreclosures in Oklahoma end when the Sheriff’s Sale is confirmed. The lender takes either the property or the sales proceeds in full satisfaction of the debt. To go after the former homeowner for any more money would require that the lender take what is called a deficiency judgment. They have to file a request for that with the Court, and it must be filed within 90 days of the Sheriff’s Sale. (12 O.S. Section 686 if anyone is checking)
If the lender doesn’t do that, they cannot come after the homeowner for any additional payment on the note and mortgage. There is an exception to that if the mortgage lender has other claims (like for mortgage fraud) against the home owner.
So, if you have been sued in foreclosure AND you want to keep the house. Call a bankruptcy attorney ASAP. If you have been sued in foreclosure AND you don’t want to keep the house, only call an attorney if you have reason to defend the foreclosure.
If you are sued in foreclosure, you don’t want to keep the house and you don’t have significant defenses or counterclaims to the foreclosure; then, just keep an eye on your mailbox. If you receive a motion seeking a deficiency judgment, then call a bankruptcy attorney. Of course, if you need to file for other reasons, you might want to go ahead and get it done.
If you have an email account, you have probably already been targeted for some kind of Internet based check scam. I would have thought that every lawyer in the Country had heard about these by now, but I understand that yet another lawyer got soaked to the tune of $180,000 in Texas recently.
What I think is worse is that I have now heard of these scams targeting non-lawyers. At least we have bar associations and journals to warn us, and any of us with bank law experience really should know better.
Regardless, here is a great article on this subject. Check Scams that Target Lawyers, by Robert T. Luttrell, III.
Some time ago I was paying for something by check at Office Depot. The cashier began to convert my paper check into an electronic check. I stopped her. I then paid by credit card. The cashier asked me why. So, I asked her a question. If there is a mistake in the electronic check process, do you know what the account owner’s legal rights and liabilities are?
She just stared at me. The next two customers in line were listening to the conversation, and neither of them said anything — they just put their checkbooks up and pulled out credit cards.
USAToday.com has an article today on small and mid-sized businesses being hit by electronic banking fraud. According to this article more than half of businesses reported some kind of fraud in the last year, 58% of those involved online banking. In 87% of those cases the banks were unable to fully recover the lost funds. More than a quarter said they were not reimbursed at all by their banks. More than half said they were not reimbursed fully by their banks.
So, tell me, when you use a debit card, make a deposit electronically, or allow a paper check to be converted into an electronic check; do you know what your rights and liabilities are in the event of either error or fraud? If not, why are you doing it?