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I can do that for $600.00!!!
About twice a day I get a call that starts the same way: How much do you charge for a Chapter 7?  The question is simple, but the answer is complicated.  What most individuals don’t understand is that a Chapter 7 isn’t a product that you pull down off the shelf and hand to a client.  Attorney’s offer a service.  In the case of a Chapter 7 that service involves filling out paperwork, attending court, and helping guide you through the process of getting a Chapter 7 discharge.  This service is very different from client to client.  For this reason I never quote a fee over the phone.
Once clients come to my office for a free initial consultation we sit down and go over the specifics of their case.  We go over their assets, their debts and any potential issues that may come up in the case.  The free initial consultation is meant to determine how complicated the case is meant to be and thus what services my firm will provide.  Until this is done no attorney can give you a realistic quote.
Once my quote is given to the client I often hear one of the following statements:  “another firm quoted me $500.00 over the phone” or “I met with an attorney yesterday that quoted me $600.00″.  The first question that I have is “why didn’t you hire them?”  The answer is usually either “I didn’t trust them” or “it didn’t feel right”.  These are powerful feelings that one should generally listen to.  The second question that I ask is “did they go over all the questions that we just covered?”  The answer is generally “no”.
The bottom line is that the fees that an attorney charges are representative in part on his experience and the amount of work he intends to put into your case.  Most attorneys charge between $150 and $250.00 an hour.  If an attorney is quoting you $600.00 that means he is assuming that he will put approximately three to four hours worth of work into your case.  For a Chapter 7 this just is not reasonable.  The average Chapter 7 involves preparing and filing approximately 50 pages worth of documents with the court. It involves providing to the trustee 6 months worth of bank statements, 60 days worth of bank statements, recorded mortgages, recorded deeds, car titles, 401k statements, divorce judgments and other documentation.  All of these documents should be reviewed by the attorney prior to filing the case to determine if their are any issues that could come up when the bankruptcy trustee reviews them.  Simply preparing and reviewing all the documents that must be prepared, filed and or provided should take an attorney 3-4 hours.  That does not include the time it takes to meet with the client or the time it takes to attend the 341 Meeting of Creditors with the client.
So what does this all mean?  It means that an attorney who is quoting you $600.00 for a Chapter 7 filing is planning on cutting corners.  They have to make up the time and money somewhere.  That is why they don’t take the time to ask you all the questions necessary for a proper intake.  They probably also don’t review the documents you provide them prior to sending them to the Trustee.  They also probably have a paralegal prepare all the documents rather than an attorney.
Cutting corners means the same thing in every profession….mistakes.  Mistakes in some professions are no big deal.  In bankruptcy they can be catastrophic.  Mistakes can cause a client to lose their home or car.  Mistakes can lead to a client’s mother being sued for a preferential payment, or their grandmother’s bank account being drained because the client’s name was on her account.  Mistakes can cost the client thousands of dollars all because they hired an attorney who told them they would “do it on the cheap” and save the client a couple hundred dollars off the cost of a qualified attorney.
 
Second Chance Legal Services is a bankruptcy law firm located in Madison Heights, MI.  While we are located in Oakland County, we service Wayne, Oakland and Macomb County residents.  As Detroit Bankruptcy Attorneys we specialize in helping individuals escape their burden of debt in order to get a fresh start on their bright future.
Because of our small size our clients get individual attention.  You will have the same bankruptcy attorney throughout your case whether you are in a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy.  Your attorney will help guide you through the bankruptcy process in order to help you get a successful discharge of your debt.
It is important to note that Macomb County Bankruptcy Attorneys, Oakland County Bankruptcy Attorneys and Wayne County Bankruptcy Attorneys all deal with the same judges and trustees.  This is because all Michigan Bankruptcies are filed with the federal bankruptcy court in Detroit, MI.  For this reason, it is important that you choose an attorney not by location but rather by how comfortable you feel with them when you meet.  If you don’t feel comfortable with their knowledge, their experience or their demeanor you should seek out an attorney that you do feel comfortable with.
If you are interested in speaking with a Detroit bankruptcy attorney from Second Chance Legal Services, please contact our office at 248-629-6367 for a free initial consultation.

Marriage binds us to one another. In sickness and in health, for richer and poorer, to honor and to cherish.
Married couples in community property states such as California find that one spouse’s bankruptcy protects the other.
How can it be?

Why Community Property In Action
California is one of a handful of states that follow the rules of community property, which means that all the assets and all of the debts incurred after the marriage are owned and owed by both spouses equally.
What’s yours is yours, and what’s mine is yours – or so the saying goes.
If you fall into debt once you’re married, your creditor can usually attach your spouse’s wages and bank account. Marital property – including the house, the car, and the household goods – can all be taken to repay a judgment.
The Community Discharge In Bankruptcy Gets Your Spouse Off The Hook – Even If They Don’t File
One spouse can file for bankruptcy without the other. In most states, the won’t impact the non-filing spouse’s liability for repayment of the debt.
Not so in community property states such as California. In community property states, the non-filing spouse no longer is held responsible for those debts either.
If you decide to do this, I highly recommend that you consider it an anniversary gift to your spouse.
Understand The Community Claim
The U.S. Bankruptcy Code, understanding the unique world of community property – and the fact that California, with over 12% of the U.S. population, is a community property state – defines a community claim as any debt that is owed by a married person. And the term creditor is defined by the bankruptcy laws as an entity that has a community claim.
This is a major point because the law specifically provides someone who is not filing for bankruptcy with the protection of the law.
All the benefit, none of the burden. And when the end of the bankruptcy case comes around, the true power is revealed.
The Non-Filing Spouse And The Community Discharge
The end of a bankruptcy case usually results in a discharge of debt – that is, a legal release from personal liability for repayment of most kinds of debts.
That discharge means creditors can no longer try to collect on any debt – including community claims “in a case concerning the debtor’s spouse commenced on the date of the filing of the petition in the case concerning the debtor, whether or not discharge of the debt based on such community claim is waived.”
You file for bankruptcy and your spouse is protected from collection.
End The Marriage, End The Community Discharge
The protection of the community property discharge lasts only as long as the marriage does.
Remember, “until death do you part.” One spouse dies, the marriage is over.
So, too, with divorce.
Either of these events will expose the nonfiling spouse to collection action.
File Separately, Or Together?
Married people in community property states should look carefully at a laundry list of factors when thinking about filing for bankruptcy.
For some, filing separately makes a lot of sense. And for others, it’s a better idea to file together.
It’s no simple decision to make, but one that has a long-lasting impact on your finances.

For some people, Chapter 7 bankruptcy is the best way to stop foreclosure in Virginia. Some people think the only way to stop a foreclosure is a Chapter 13 bankruptcy. Mark and Tina Allen (not their real names) got a Virginia bankruptcy lawyer who thought that.  When they told him they wanted to stop foreclosure […]The post Stop Foreclosure in Virginia with Chapter 7 Bankruptcy appeared first on Robert Weed.

By NATALIE KITROEFF Stacy Jorgensen fought her way through pancreatic cancer. But her struggle was just beginning.
Before she became ill, Ms. Jorgensen took out $43,000 in student loans. As her payments piled up along with medical bills, she took the unusual step of filing for bankruptcy, requiring legal proof of “undue hardship.”
The agency charged with monitoring such bankruptcy declarations, a nonprofit with an exclusive government agreement, argued that Ms. Jorgensen did not qualify and should pay in full, dismissing her concerns about the cancer’s return.
“The mere possibility of recurrence is not enough,” a lawyer representing the agency said. “Survival rates for younger patients tend to be higher,” another wrote, citing a study presented in court.
There is $1 trillion in federal student debt today, and the possibility of default on those taxpayer-backed loans poses an acute risk to the economy’s recovery. Congress, faced with troubling default rates in the past, has made it especially hard for borrowers to get bankruptcy relief for student loans, and so only some hundreds try every year. And while there has been attention to aggressive student debt collectors hired by the federal government, the organization pursuing Ms. Jorgensen does something else: it brings legal challenges to those few who are desperate enough to seek bankruptcy relief.
That organization is the Educational Credit Management Corporation, which, since its founding in Minnesota nearly two decades ago, has been the main private entity hired by the Department of Education to fight student debtors who file for bankruptcy on federal loans.
Founded in 1994, just after the largest agency backstopping federal student loans collapsed, Educational Credit is now facing concerns that its tactics have grown ruthless. A review of hundreds of pages of court documents as well as interviews with consumer advocates, experts and bankruptcy lawyers suggest that Educational Credit’s pursuit of student borrowers has veered more than occasionally into dubious terrain. A law professor and critic of Educational Credit, Rafael Pardo of Emory University, estimates that the agency oversteps in dozens of cases per year. Others have also been highly critical.
A panel of bankruptcy appeal judges in 2012 denounced what it called Educational Credit’s “waste of judicial resources,” and said that the agency’s collection activities “constituted an abuse of the bankruptcy process and defiance of the court’s authority.”
Representative Steve Cohen, a Tennessee Democrat who has introduced a bill to limit predatory tactics, said, “The government should hold its agents to the highest standards, and I don’t know that we’ve been doing that.”
He added that the government has a special responsibility to use “a standard that’s reasonable.”
The case that caused the bankruptcy judges to accuse the agency of abuse concerned Barbara Hann, who took a particularly drawn-out beating from Educational Credit. In 2004, when Ms. Hann filed for bankruptcy, Educational Credit claimed that she owed over $50,000 in outstanding debt. In a hearing that Educational Credit did not attend, Ms. Hann provided ample evidence that she had, in fact, already repaid her student loans in full.
But when her bankruptcy case ended in 2010, Educational Credit began hounding Ms. Hann anew, and, on behalf of the government, garnished her Social Security — all to repay a loan that she had long since paid off.
When Ms. Hann took the issue to a New Hampshire court, the judge sanctioned Educational Credit, citing the lawyers’ “violation of the Bankruptcy Code’s discharge injunction.”
Educational Credit went on to appeal the sanctions twice, earning a reprimand from Judge Norman H. Stahl of the United States Court of Appeals for the First Circuit, who agreed with the bankruptcy judges that the agency “had abused the bankruptcy process.”
Asked for comment, Educational Credit responded that the case was not related to undue hardship and that it was based on “complicated issues of legal procedure.”
Another case dating from 2012 involved Karen Lynn Schaffer, 54, who took out a loan for her son to attend college. Her husband, Ronney, had a steady job at the time.
But Mr. Schaffer’s hepatitis C began to flare up, and he was found to have diabetes and liver cancer. He became bedridden and could no longer work.
Ms. Schaffer said she did her best to cut expenses. She began charging her adult son rent, got loan modifications for her mortgages and cut back on watering the yard and washing clothes to save on utilities. She woke up at 4 every morning to take care of her husband before leaving for a full day at a security job.
But Educational Credit said Ms. Schaffer was spending too much on food by dining out. According to Ms. Schaffer, that was a reference to the $12 she spent at McDonald’s. She and Mr. Schaffer normally split a “value meal,” a small sandwich and fries.
“I was taking care of Ron and working a full-time job, so lots of times I didn’t have time to fix dinner, or I was just too darn tired,” Ms. Schaffer said in an interview. The lawyers also suggested she should charge her son for using their car, require him to pay more in rent and rent out the other room in their house.
Asked for comment, Educational Credit said that Ms. Schaffer “did not meet the legal standard for undue hardship,” and that she declined an income-based payment plan. Her lawyer argued that the plan would treat any forgiven loans as taxable income at the end of the repayment period so it was not a viable option.
Supporters of the agency’s tactics say they are necessary to hold borrowers accountable. “For every dollar that the aggressive debt-collection firm fails to recoup, that’s a dollar that someone else is going to have to pay,” said G. Marcus Cole, a law professor at Stanford University.
Professor Cole added that if it were easy to discharge student loans in bankruptcy, lenders would simply not lend money to students without clear assets or prospects. “We need a standard like that to be able to allow students who can’t afford an education to be able to borrow,” he said.
The Educational Credit Management Corporation is the product of a scandal that almost brought down the government’s student loan program two decades ago. In 1990, the Higher Education Assistance Foundation, the nation’s largest student loan guarantee agency for federal loans, announced that it had become insolvent, evidence that no one was paying very close attention to where student loans went, and whether they were ever paid off.
“The high default rates had a particularly high impact with the press,” said Frank Holleman, deputy secretary of education at the time.
Lawmakers began arming the Department of Education with a set of unprecedented collection tools, including the ability to garnish debtors’ wages and Social Security, and appropriate their tax rebates. The changes helped cut default rates from a high of 22 percent in 1990 to around 10 percent in the 2011 fiscal year.
But critics of Educational Credit said it had stepped over a line between legitimate efforts to collect on defaulted loans and legal harassment.
“We should be outraged when a student-loan creditor like E.C.M.C. can use bulldog tactics to scare away someone who has a legitimate claim for relief,” said Professor Pardo, who has analyzed hundreds of adversary proceedings involving the nonprofit. “Part of the outrage is that ultimately E.C.M.C. is defending the federal government’s interest.”
Professor Pardo called the agency’s tactics a “war of attrition, death by a thousand cuts.”
Asked to respond, Educational Credit issued a statement saying that its practices strictly follow federal law and that it strives to avoid lengthy court proceedings by working with borrowers to help them apply for income-based repayment plans. When appropriate, it said it “consents to a discharge as an undue hardship.” It acknowledged that some cases are “close calls.”
Chris Greene, a spokesman for the Department of Education, said that the department offers flexible repayment options and believes that Educational Credit complies with the law and government policies. He said that if there was evidence of wrongdoing, the department would investigate.
One of the places where Educational Credit has had the biggest impact has been to shape the meaning of the phrase “undue hardship,” the standard required since the 1970s for relief from student debt. In 2009, for example, the agency persuaded the United States Court of Appeals for the Eighth Circuit to adopt stricter standards. One argument it made was that if student borrowers seeking bankruptcy could qualify for a repayment plan tied to their incomes they were, by definition, ineligible for relief.
The dissenting judge, Kermit E. Bye, said the decision “improperly limits the inherent discretion afforded to bankruptcy judges when evaluating requests” for relief. He also said the new standards subjected debtors to a higher burden of proof than was actually required by law.
These and other changes have been regretted by others as well.
“We thought we were doing God’s work,” said David A. Longanecker, a former Department of Education official, referring to efforts to strengthen collection. “We didn’t realize the full extent to which our actions would lead to some activities that would be unfair to borrowers.”  Copyright 2014 The New York Times Company.  All rights reserved.