I came across this article that I thought lots of people would be interested it.

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TaxMasters Bankruptcy Proves You Shouldn’t Always Believe What You See On TV

Here is a trend I notice every year but I hope people will listen to me and avoid.  Bankruptcy filings, at least new clients signing up decrease in December.  This is understandable because people don’t want to deal with the stress of bills over Christmas and the holidays.  It is pretty much people putting their head in the sand and waiting to deal with the problems in January.  It isn’t a good plan but it always happens and I understand it.

Then in January the new resolution everyone sets is to get out of financial trouble.  One tool that people look to is their income tax refund.  For most of us that couple of thousand dollars will buy us a month of catching up on minimum payments and stop the phone calls for a month or so.  The stopped calls makes us feel so much better.  The problem is, if that tax return isn’t enough to get your bills completely paid off or to get everything back to where your regular paycheck is enough to pay your bills and give you breathing room then you are just throwing away money to feel better for one month.

A better plan for most people is to meet with you attorney about bankruptcy at the start of January.  You and your attorney can evaluate your situation and determine if using the tax return will save you by paying some bills or if it will just buy some time.  If it just buys time then you send the tax return money to your creditors, they leave you alone for a month and then they start calling again.  Then you need to come up with the money again to file for bankruptcy.  A better plan might be to use that tax return to pay for filing bankruptcy now.

Use that money to pay for a bankruptcy attorney and get out of your financial troubles once and for all.  You might even be able to do so and still have money left over to spend on something you will enjoy instead of giving it all to creditors.

A key point with me is always find out all of your options and plan as much as you can.  To do that you need to stop ignoring your bills.  Make it your new years resolution to meet with a bankruptcy attorney and talk about your options.  We might not be able to help but the advice can’t really hurt can it?  We can help guide you with financial planning so that if you do need to file for bankruptcy in the near future that you can keep as much of that money as possible.  There are certain items that are exempt and those that aren’t.  There are payments you can use your money for and then there are payments that would be considered fraud if you made them.

Find an attorney that is there to help you.  I offer and so do many others a free consultation under most circumstances to potential clients in my area.  Take the time with the start of the new year to get your finances back on track and take advantage or our experience with these issues.

So you did all that work to prepare your case and file for Chapter 7 Bankruptcy.  Likewise, your attorney charged you a fee to help you get all the forms correct and represent you in the matter.  So after about 20 to 30 hours later, there are now about 30 to 45 pages of documents filed with the Bankruptcy Court and an another 50 to 200 pages of additional supporting documentation sent to the Chapter 7 Bankruptcy Trustee.  That Trustee must get big bucks to review all your paperwork, hold the 341 hearing, analyze for abuse, look for preferences, look for bankruptcy fraud, respond to you and your creditors, and monitor your case for the next 4 months, right?  NOPE!With the new bankruptcy laws under BAPCPA, the Trustee’s may actually be getting the short end of the stick.  Actually, they get $60 per case.  So how does an attorney billing out at $450 per hour who is also serving as a trustee process and monitor your case for $60?

Heck if I know?  That’s why I would never be a trustee.  At $450 per hour, a trustee would only spend 7.5 minutes per case.  Heck, they cant even conduct the trustee hearing in that amount of time, let alone review all the documents.  And to make matters worse, if you qualify for a fee waiver, wherein you get your $[306] court filing fee waived, the trustee gets $0.00!

For a break down of how they can make a profit, please view the full article via Fees for Bankruptcy Trustees.

This was on Yahoo News.  The simple (but of course talk to an attorney to make sure it is right for you answer) thing to do is file bankruptcy and get rid of your debts.  Bankruptcy has got to be better then jail if you live in one of these states.  Bankruptcy is much better then feeling like you are in jail because you have no money to do anything and debt collectors keep calling trying to make you feel like a criminal.

Here is the article as on the Yahoo site.  They also had a video news report you can watch.

As if life wasn’t already tense enough for Americans who can’t pay their debts, collection agencies are now taking advantage of archaic state laws to have some debtors arrested and sent to jail.

More than one-third of US states allow debtors to be arrested and jailed, says Jessica Silver-Greenberg in the Wall Street Journal.

Judges typically grant arrest warrants when the debtors have failed to show up for court dates or failed to make court-ordered payments.

Of course, the reason debtors have failed to make court-ordered payments is often the same reason they didn’t pay their debts in the first place: They don’t have any money.

In September, a 53 year-old woman named Vivian Joy was stopped for a broken tail-light in Champaign, Illinois. And then, because the cops discovered that she still hadn’t paid $2,200 to a collection agency, she was cuffed and carted off to jail.

Joy’s excuse?

She doesn’t have any money.

Jailing debtors for not paying their debts is apparently especially popular in Illinois.

(This practice, needless to say, is preposterous. If people can’t pay their debts and have no prospect of being able to pay their debts, they should declare bankruptcy. And the debts should be written off. Companies don’t go to jail when they default. Neither should people.)

So maybe I need a twitter account but then I worry someone might connect a comment I make to something private of a client of mine.  I guess I would just really need to be careful.  Oh well, here is what happened that I wanted to talk to people about.

As I finished my cases today a few couples stopped me and asked if I was there attorney.  Why would they be asking me this?  We are at the meeting of creditors and they don’t have any idea who their attorney is?????  Of course I started asking questions and they all had the same story.  The attorney had 5 or 6 cases on the calendar, each person had hired him over the phone and internet.  They sent him their money and filled out some forms.  The attorney filed the case without ever meeting with them.  They said the attorney told them to go to the 341 and an attorney would be there to help them.  Looks like the “attorney” didn’t make it to the 341 and neither did the replacement attorney if there really was one.  I was wondering if they were expecting some random attorney to step in or if the debtors were going to do the 341 by themselves?  Was this a one time thing or is this how this attorney operates?  With 5 cases on this calendar I would think that this firm was either very inexpensive or did a ton of advertising.  I would also expect that if this was a common thing the trustees would start to complain or somehow it would get addressed.

So what do we do about this?  Maybe the attorney was charging a very small fee because they don’t include going to the 341 as part of their service.  Is the attorney required to be there in a chapter 7?  I saw this same problem a lot a few years ago and then the courts in my area added a new form that is required in all chapter 13 cases that sets out the debtor and attorney duties.  One of the attorney’s duties is to appear at the 341 hearing.

What kind of service to people really want?  These debtors that were coming to me at the 341 clearly wanted an attorney there to be with them.  Attorneys say very little at a 341 in most cases but I know most debtors feel more comfortable just having the attorney with them.  The courthouse or whatever location you are at can be intimidating for someone that isn’t there every day.  At least if your attorney is there you know one other person that you can turn to for support.  I also know that I’m answering question for clients both before and after every hearing.  It also isn’t unusual for the trustee to ask for additional documentation, clarification on an issue or for something to be amended.  If the attorney isn’t there are the relying on the debtor communicating those needs back to them?

Okay I know that I start going off on other topics but I’m new at writing these issues.  As an attorney I have 6 page contracts on how to change a light bulb so this really is brief.  Do people really want to pay an attorney to just put their name on a paper and never meet with them?  What are they paying for?  The forms are free on the court’s website?  If the attorney isn’t talking to you then they aren’t getting the forms completed.  I find out new and sometimes very important information almost every time I talk with my clients.  There are some emergency cases where we complete lots of the paperwork electronically by phone, email and fax but in a normal case I meet with the clients 1 or 2 times before the hire me, we meet to review and sign the forms and schedules before they are filed, we go to the 341, confirmation hearing and other meetings together.  Each client has my cell phone number and I answer it if I’m not in court or with another client.  I even take calls in the middle of the night (especially for my criminal clients.)  If you leave a message I try to return it quickly.  So are you getting what you pay for?

After all of this I guess I just have a few reminders for people when looking for an attorney.  Talk to a few attorneys and find one that you communicate well with.  Make sure your attorney is willing and able to set aside the time to help you with both getting the case filed but also with being available to answer your questions.  Make sure your attorney is going to be there in court with you.

For attorneys that are handling bankruptcy cases.  Bankruptcy work is a lot more then just filling out the forms.  If you are going to be in this field you should be keeping current with issues that seem to change every week.  There are lots of active chat rooms or blogs that are restricted to debtor attorneys only and I think you should participate in some of those to stay current and to help other attorneys with their questions.  As an attorney we usually have to be adversarial in the courtroom or when dealing with a case but it is also part of our responsibilities to help guide new attorneys.

I’ve written a few comments on bankruptcy fees lately.  Tonight I came across an article that I think explains both the reasons why you need to hire an attorney and what the approximate fees are.  Take a look at   http://bankruptcyattorneyfees.org/  and then feel free to come back to   http://aaronnielsonlaw.com/news/   for other bankruptcy help.