Filing Bankruptcy Under The New Laws
You need WHAT to file my Bankruptcy? But I thought I paid you $3,000.00? The new bankruptcy laws enacted in 2005 have created substantial new requirements for attorneys representing debtors in bankruptcy. The biggest requirement imposed on attorneys now is the duty of due diligence with respect to the schedules and documents filed in each case. Sorry, we can no longer take your word for it; we must actually verify that what you are telling us is true, accurate, and reflective of your financial situation. Because of this new heightened duty, the amount of time to prepare a simple bankruptcy case has greatly increased.Before the bankruptcy laws were overhauled in 2005 the average case would take between 1-2 weeks to research, prepare, and file. Today, due to all the documents and inquiries which must be made, the average case takes about 4-6 weeks to research, prepare, and file.So what are all these documents and inquires that must be considered before your case can be file? Think of them as additional hoops and hurdles requiring careful and skillful navigation, put there by powerful lobbyist in the credit card industry, to do none other but delay your filing and afford them one last stab at your finances.In my opinion the biggest hurdle to filing bankruptcy before the law changed was coming up with the attorney fees and filing fee. Not any longer. Despite the doubling to tripling of attorney fees now required to file under the 2005 amendments, the attorney fees are no longer the biggest obstacle in getting your case filed. You either have it or you don’t; if you don’t you go out and save it, borrow it, or beg for it. Problem solved.The biggest obstacle now in filing for bankruptcy relief is gathering all the documents required AND providing them to your attorney before either the documents go stale or your filing itself goes stale! For instance, have all your tax returns been filed? Do you have copies of every pay advice for the last 7 months? How about proof of every pension payment over the last 7 months, or social security deposit? Better yet, is the tax withholding on your pay advice correct? Is it taking into consideration the fact that the house you are surrendering is no longer going to provide a mortgage interest deduction? Once we get through your income, how about documenting all your assets?We’ll need statements for the last 6 months on all bank accounts, stock accounts, retirement accounts and any and all other financial institutions. It’s best you reconcile the random deposits and withdrawals ahead of time such that we aren’t scratching our heads wondering why you are seeing us in the first place. Don’t forget about providing us with pay offs on all secured debts (such as cars, boats, rv’s etc) as well as written evidence that the creditors security interest is not only perfected but fully insured.Valuation will need to be documented and provided as well. Kelly Blue Book, Nada Guides, Zillow, The MLS (Multiple Listing Service), Doc Edge, San Diego Sales Recorder, and Realist are only a few of the vendors that have become our best friends in recent years. There are countless other we consult with on a daily basis, all in the name of due diligence.The above is only a glimpse of what is now required to file for bankruptcy relief. In addition we’ll research and confirm whether you have filed a bankruptcy case in the past, we’ll calculate and list what your contractual obligations to secured creditors are for the next five years despite variable financing rates, and we’ll determine whether you can exempt all your personal property despite the fact you may have lived in Texas 2 years ago.You see, if you take each individual document and inquiry required to satisfy the new due diligence requirement by itself it really doesn’t appear at first glance to be a big deal, right? You just gather them up and turn them in to your attorney, no? Well not exactly. The real task is gathering all of the required documents simultaneously and then surgically assembling them to substantiate a “real time” snap shot of your bankruptcy case on the date it is actually filed. Unfortunately the process requires much more than bringing us a shoe box of documents and requesting your case be filed the next day.These types of documents are perishable. But don’t worry; you came to the right place. You came to Doan Law Firm, southern California’s largest family of attorneys. Your case will be perfect when it is filed; you may even have a few passer bys at the hearing inquiring as to whom your attorney was when they see how smooth your case went.Don’t be afraid to pat yourself on the back as well, after all you made it through all the hoops and hurdles of the new bankruptcy laws!Written by Shawn A. Doan