Can I get a fee waiver for my chapter 7 bankruptcy?

The short answer: it depends on your monthly income and how many dependents you claim.

One of the most difficult things for people planning to file for bankruptcy is finding enough money to pay an attorney to represent them. On top of attorney’s fees, you will have to pay the court a filing fee which is currently $306. That may not seem like a lot of money to some but if you are considering filing for bankruptcy chances are you are carefully watching where every dollar goes.

Fortunately, if you are below 150% of the poverty line you may be eligible for filing fee waiver. You’ll still have to pay your attorney’s fees but at least you can shave off a few hundred dollars off the cost of your bankruptcy.

The amount is determined by the U.S. Department of Health and Human Services (DHHS). Whether you qualify depends on how many people are in your household. The more people in your household, the higher that 150% of the poverty line climbs. The number also depends on which state you live in, although DHHS uses the same numbers for the 48 contiguous and D.C. while Hawaii and Alaska get their own numbers.

At the time of this writing this table shows the maximum monthly income you may have in order to qualify for a fee waiver.

Persons in family unit Monthly Income
1 $1,458.75
2 $1,966.25
3 $2,473.75
4 $2,981.25
5 $3,488.75
6 $3,996.25
7 $4,503.75
8 $5,011.25
Each Additional Person $507.50

Links:

How do I download my taxes from the IRS?

6355404323_ac5691e105_oAs a bankruptcy attorney I feel like I am always chasing down documents. There are a number of documents that need to be gathered and filed as part of your bankruptcy whether it is chapter 7 or chapter 13. Most documents that are needed to be filed with a bankruptcy, like taxes and pay stubs, are given to me in paper form.

When I get these documents from my clients I have to scan them to my computer and make sure they are in PDF format because everything that is filed now, whether it is with the federal bankruptcy court or the trustee’s office (in Utah at least) is filed electronically.

Often times clients know that they have filed their taxes but they just can’t remember where they put them or they have lost their taxes. I have good news for all my clients and for everyone filing for bankruptcy and for their attorneys. The IRS has a service called “Get Transcript” that allows you to download your IRS transcripts directly to your computer! This means that if you have a computer, or even probably a smartphone, you can log onto this website, download your IRS transcripts, and forward your transcripts on to your attorney without using a single piece of paper. And the best part about it is that it’s absolutely free.

Links:
“Get Transcript”, download your tax transcripts from the IRS

The Fromm Six

Dean Len FrommI use NetNewsWire to read my RSS feeds and I read a variety of different blogs, some of which include other attorneys’ blogs. One of my favorite blogs is Dan Harris’s China Law Blog. I read a recent post wherein he discusses a post from another blog which outlines “The Fromm Six”, six competencies that Leonard Fromm had boiled down that make a good lawyers. Fromm came up with these six competencies to becoming a good lawyer after decades of serving as the Dean of Indiana Law. Below I would like to discuss my short thoughts on each of these six competencies.

Active Listening – The ability to fully comprehend information presented by others through careful monitoring of words spoken, voice inflections, para‐linguistic statements, and non‐verbal cues. Although that seems obvious , the number of lawyers and law students who are poor listeners suggests the need for better development of this skill.  It requires intense concentration and discipline. Smart technology devices have developed a very quick mode of “listening” to others. Preoccupation with those devices makes it very challenging to give proper weight and attention to face‐to‐face interactions. Exhibiting weak listening skills with your colleagues/classmates/clients might also mean that they will not get to the point of telling you what they really want to say.  Thus, you miss the whole import of what the message was to be.

Active listening is more difficult than many people would suspect. Too often we get a thought in our head and we want to say it out loud but we don’t want to lose that thought so we concentrate on holding that thought and wait for the opportune time to say it rather than listening to the rest of what that person is saying.

Questioning – The art and skill of knowing when and how to ask for information. Questions can be of various types, each type having different goals. Inquiries can be broad or narrow, non‐leading to leading. They can follow a direct funnel or an inverted funnel approach.  A questioner can probe to follow up primary questions and to remedy inadequate responses.  Probes can range from encouraging more discussion, to asking for elaboration on a point, to even being silent. Developing this skill also requires controlling one’s own need to talk and control the conversation.

This skill is especially important not just when putting someone on the stand but also when deposing someone or asking questions at a judgment debtor’s exam. You really have to know how to ask the follow up questions because frequently witnesses will only give enough information as they have to in order to answer the question. That information is rarely enough for your own purposes.

Empathy– Sensing and perceiving what others are feeling, being able to see their perspective, and cultivating a rapport and connection. To do the latter effectively, you must communicate that understanding back to the other person by articulating accurately their feelings. They then will know that you have listened accurately, that you understand, and that you care. Basic trust and respect can then ensue.

Law is not Radiology. Lawyers do not sit behind a desk and just read all day long. We work with people! Trust is an essential element in the attorney/client relationship. Clients must get the sense that you understand and that you care.

Communicating/Presenting –The ability to assertively present compelling arguments respectfully and sell one’s ideas to others.  It also means knowing how to speak clearly and with a style that promotes accurate and complete listening.  As a professional, communicating means persuading and influencing effectively in a situation without damaging the potential relationship.  Being able to express strong feelings and emotions appropriately in a manner that does not derail the communication is also important.

Again, like Active Listening, this is more difficult than many would expect. Attorneys must take in large amounts of information, synthesize that information, fit that information into a legal framework, and then be able to communicate that information in that legal framework through writing and speaking. It’s not easy and attorneys are constantly tweaking and fine-tuning the way they present.

Resilience –The ability to deal with difficult situations calmly and cope effectively with stress; to be capable of bouncing back from or adjusting to challenges and change; to be able to learn from your failures, rejections, feedback and criticism, as well as disappointments beyond your control. Being resilient and stress hardy also implies an optimistic and positive outlook, one that enables you to absorb the impact of the event, recover within a reasonable amount of time, and to incorporate relevant lessons from the event.

None of these competencies are easy to acquire but in my opinion Resilience is the most difficult of the six. Why do I think that you may ask? There are many difficult and stressful jobs out there. Being an attorney is one of those. We deal with problems that greatly affect our clients’ lives. People lose sleep over their legal problems. So do their attorneys. Attorneys must manage our clients expectations because we “know” the legal system and they don’t. But I will tell you that the legal field is fraught with uncertainty and that includes lawyers. Dealing with clients, judges, and other attorneys is stressful. The ability to be Resilient and being able to pull yourself out of these situations and recover without being bogged down is an invaluable skill as an attorney.

Fisker sold for $149.2 million

1024px-Fisker_Karma_PHEVFisker has been sold for $149.2 million to Chinese carmaker Wanxiang. Fisker experienced financial troubles which eventually led to the company filing for chapter 11 bankruptcy. While the sale seems to be fairly certain it still needs to be approved by US Bankruptcy Judge Kevin Gross.

While Fisker has failed to gain traction in the market, Tesla has proven to be a viable competitor in the automotive world, paying off its Department of Energy loan of $465 million and watching its stock price rapidly.

Payday loan bill flies through House Committee

imgresThe Utah Legislative Session is up and running and the bills are passing. One of the bills of interest to me is HB127. This bill is designed to reform many of the practices of Payday loan companies. Today it sailed through the House Business and Labor Committee by a vote of 12-0.

Why is this of interest to bankruptcy attorneys you ask? Just the other day I was talking to an individual who was telling me about her debts and she proceeded to list off seven payday loan companies that she hadn’t repaid. What I see happening are people obtaining payday loans in desperation to pay off debt hoping to be able to pay off the payday loan in a couple of weeks only to realize that they don’t have the money. Seeing that big interest is going to hit (the average interest being 474% for payday loans) they decide to get another payday loan to pay off the previous loan which then cannot be repaid. The cycle repeats itself. Wash, rinse, repeat. Soon they find themselves in a financial avalanche that they will never recover from.

Here are some of the more important provisions of the bill:

-Payday loans, usually for two weeks, currently can be renewed or “rolled over” for up to 10 weeks, after which no more interest may be paid. The bill would then give borrowers 60 days to pay off the loan before lenders could take any action against them.

-The bill would require lenders to file any default lawsuits where borrowers live or obtained the loan. Many lenders now make borrowers waive that right, and lenders do such things as sue people living in St. George in an Orem court — making cases difficult to defend.

-The bill would require lenders to do at least minimal checking to see if borrowers can afford the loans and rollovers, including looking at pay stubs, doing a credit check or looking at repayment history of previous loans.

-The bill would require the industry to report to the state how many loans go the full 10 weeks, how many end up in default, and the amounts involved. Advocates now claim that default rates are high while the industry claims it is low, and the data should show what is true.

What do you think? Is more regulation of payday loans good policy?

Do I need to hire a bankruptcy attorney?

waterblaster-pressure-washer-gx390The short answer is ‘no’. Anyone can file his or her own bankruptcy. Perhaps the wiser question is ‘should I hire a bankruptcy attorney?’ The short answer is ‘yes’. Allow me to explain.

When I was in college I ran a mobile detailing business with a friend of mine. I borrowed my dad’s pressure washer, bought a truck, and bought the necessary equipment and I went out and found some clients. The business was successful while it lasted but in the end my friend and I ended up at different colleges and we gradually wound up the business.

A couple of years later my dad went to go use the pressure washer on our driveway. When he tried to use the washer, only a weak stream came out. Frustrated, he came to me since I had used the washer so much in the past.

Thinking I was up for the challenge, I decided to have a go at it. The engine seemed to be working just fine so I turned to the pump, a complex copper piece attached to the engine. I was a little nervous but I started taking the pump apart. Inside I found all kinds of pieces that somehow worked together. I tried my best to remember where everything went but there were just too many pieces and I started to forget how to reassemble the machine.

I sat there on the garage floor surrounded by various pieces. I couldn’t find the owner’s manual so I had to download a PDF from the Internet. I ran out of time that Saturday but I thought I had a pretty good idea of which piece needed to be replaced. I emailed the corporate headquarters of the company that made the actual pump and ordered a part from them.

A couple of Saturdays later I found sometime and I attempted to put the pump back together. Needless to say, it took much longer than I had expected. I ran into all kinds of weird mechanical hiccups. Finally, at the end of that Saturday, I was able to put everything back together and I decided to give the pressure washer a test run. I was really hoping the darn thing would work because I had just invested two Saturdays into fixing the washer and I had spent some of my dad’s money buying a new part. If it didn’t work, I was going to be ticked. The moment of truth was here. I fired up the engine and squeezed the trigger. A powerful stream came shooting out of the machine. I was relieved that I didn’t have to spend another Saturday troubleshooting that pressure washer.

Now you might be asking at this point, what does a pressure washer have to with the price of tea in China? More specifically, what does a pressure washer have to do with bankruptcy? I’ll tell you.

There are several repair shops near my house that know how to fix pressure washers. I could have easily taken the washer to one of those shops. It would have been easier. It would have saved me two Saturdays. True, it would have been more expensive. But most importantly, I would be more certain that the job would get done.

Sometimes people ask me if they need an attorney to file bankruptcy. Again, the answer is ‘no’. Generally you don’t need an attorney to represent yourself in legal matters. But I generally would not recommend going at it alone. When I was fixing that pressure washer, I decided to do it on my own because the risk was low. If I didn’t fix the washer, someone else could probably fix it. Even if I destroyed it, we could go buy another one for a couple hundred bucks.

You and your family’s economic well-being is a whole “nother” story. Can you really afford to lose your house or your car? Can you afford to have your wages garnished? Do you really want to roll the dice on these things? Of course you can always re-file should your case get dismissed but there are consequences to filing again. And if you have to file again, you have to pay the filing fee again. At this point, you aren’t really saving much money at all and you have to do all the work. The work takes you longer than it would an attorney because it is something you are new at and you don’t know if you are doing it right. The list goes on and on.

Do you have to hire a bankruptcy attorney? No. Should you hire a bankruptcy attorney? Yes.