We are reminded this Christmas to be thankful for attorneys who represent people in financial distress.  Wendell Sherk tells it eloquently in this reprise of his A Christmas Cheer for Consumer Lawyers.

Christmas is usually a slow time for consumer bankruptcy lawyers.  The phones go quiet, a few cards come in, a fruit cake from a grateful client now and then.  It gives us a chance to pause and consider what we do and why.

Consumer Advocates Are Often Pariahs

As a bankruptcy lawyer, I run a financial VD clinic.  Few people want to come see me, no one is happy about it, and they’ll never brag about it to anyone.  I am a regrettable necessity, not a pleasant choice.

And society often feels the same.  We often hear folks talking about how people with too much debt deserve to suffer or be punished.  In a country that cheers winners — and jeers losers in equal measure — we constantly defend the loser and the underdog.

Consumers Going Broke Can’t Pay Much

Becoming a debtor’s attorney often means taking a vow of poverty.  It’s possible to make a decent living (but rare to get rich) when you serve folks who are going bankrupt.  To be successful at all, we become masters of managing pools of risk, like insurance companies.  We must balance the cases that will eat up our days with labor that will never be paid for while searching for those that may pay well enough to make up the losses.

We face opponents who pay better, recruit our best and brightest, and have more resources or leverage to deploy against us.  And each year we watch as a few of our colleagues can’t get that balance right and file bankruptcy themselves.

The Work Is Complex

Bankruptcy law is hypertechnical.  If you do it exclusively, much of it can be done without deep thought after awhile.  But in our legal system it is among the more complex even in very routine cases, partly on purpose.  It is also not unusual that we must make bricks with no straw — miracles without money, in this case.  Using the law to accomplish things for those with wealth is easy, using it to defend those with nothing is always harder.

The Clients Are Often Unhelpful

Consumers under long-term stress from debt become depressed, disorganized, delusional, and sometimes downright hostile.  And then they have to get organized, answer hundreds of questions, produce all sorts of nonsensical paperwork for us, very quickly.  It’s hardly a surprise that they don’t seem to be helping themselves or are angry with us for being unsympathetic.  After all, we’re adding to the pressures, not lightening them during a process they dread, fear and regret.

The Clients Are Often Ungrateful

Being a lawyer usually means being unappreciated.  We’re in the business of picking fights and we’re rarely gracious souls to begin with (or we wouldn’t want to be lawyers, right?).  Sadly, bankruptcy debtors often feel more like disaster survivors than happy clients.  If you do your job well, they can feel like there was nothing to it — in which case, why did it cost so much?  If the going is rough, they may wonder what they got for their money.  In either case, their lawyer’s probably not being invited to the New Year’s Party.

So Why Do It?

Trauma surgeons are critical during a war.  And that’s kind of what is happening now.  Consumers are under siege.  The confluence of declining real wages and increasing real costs of living since the 1970s has emptied the consumer’s savings account and the budget gap has been filled with credit.  Credit is risk, dressed up as a currency.  And risk has been doled out to the public at unprecedented and unimaginable levels.

We go through the economic battlefield and treat the unhappy wounded.  We patch up the holes torn in their financial armor.  With our knives, saws, and bandages, we save those we can and mourn the ones we can’t.  But there’s always another dozen victims waiting.  In short, we’re desperately needed.

It can be a thankless but necessary job.  You have to take pride in the work itself, in achieving unusual victories even when your client doesn’t understand or care.  You have to know what you do is for a greater good.

You have to know these things in your heart.  It needs to be enough because there will often be little other reward.

Well, except the fruitcake.

Photo Credit: Salva Barbera

For your enjoyment this holiday season, here is a bankruptcy attorney’s riff on a Christmas carol, Do You Owe What I Owe?, by Wendell Sherk.

Last year St. Louis bankruptcy attorney Wendell Sherk published his riff on a popular Christmas song – Do You Owe What I Owe?  We thought it worthy of sharing it with you again this holiday season.

(To the tune of “Do You Hear What I Hear?”)

Said the neighbor to the young man,
“Do you owe what I owe?
Bills up to the sky, young man,
Do you see what I see?
A choice, a choice, waiting in the night
A new start to end the year alright,
A fresh start for a New Year’s Night.”

Said the collector to the young man,
“I know what you owe,
Bills up to the sky, little debtor man,
Do you hear what I say?
Pay what you can’t pay, little debtor man!
With a voice as big as the sea,
With a voice as big as the sea.

Said the young man to the lawyer kind,
“Do you know what I owe?
In your palace warm, lawyer man,
Do you know what I owe?
An arm, a leg, I’ll be out in the cold–
Help me save a little silver, or gold,
Help me save a little silver, or gold.”

Said the judge to the people everywhere,
“Listen to what I say!
Be at peace, people, everywhere,
Listen to what I say!
A fresh start, a new start, waiting in the night
To bring you peace and goodness,
To bring you quiet in the night.”

With apologies to Noel Regney & Gloria Shayne Baker

A sample of the original (better) song can be found here.

Image by Some rights reserved by brockvicky

There’s something about Halloween that makes children and adults alike feel good.  Maybe it’s the costumes, perhaps it’s the candy.  One thing’s for sure – there are few people who don’t smile when screaming, “Trick or treat!”

Of course, there’s always the errant egging or toilet papering of the trees in front of the house.  Even the theft of vandalization of a mailbox.  But those are few and far between, more the result of teenagers than those in it for the candy.

And who can forget poor Charlie Brown?  His friend sat out all night waiting for the Great Pumpkin, and all poor Chuck got was a rock for his trick-or-treat efforts.  We would expect nothing less (more?) of him, what with all the football snatching shenanigans that had come before.

Come November 1, 2011 – one day after Halloween – the American consumer will get a proverbial rock as well.  As if the economy wasn’t bad enough already, here comes more bad news from the U.S. Bankruptcy Court.

The cost to file your case goes up starting November 1, 2011.

The fee to file a bankruptcy case increases by $7.  The filing fee is actually a combination of fees that must be paid to initiate a bankruptcy case.  The $7 increase is a portion of the money required and it is one of those costs, the “administrative fee”, that is increasing.  Whatever fees or court costs are called, it means more money to get bankruptcy help for debtors.

The new total fees to start a new bankruptcy case are

• chapter 7            $306
• chapter 13          $281
• chapter 11        $1046

Debtors will have to pay $30 to amend Schedule D, E, F, G or H, up from $26.  Creditors will have to pay $176 to file a motion to lift the automatic stay, up from $150.

Other fee increases:

• Certification $11 from $9

• Exemplication $21 from $18

• Record Search $30 from $26

• Adversary Proceeding $293 from $250

• Document Filing / Indexing $46 from $39

• Title 11 Administrative Fee $46 from $39

• Record Retrieval $53 from $45

• Returned Check $53 from $45

• Notice of Appeal $293 from $250

Statutory authority for the bankruptcy court fees is 28 U.S.C. 1930.

If you have paid your bankruptcy lawyer for your filing fee and your case has not yet been filed, contact your lawyer about the $7 increase in filing fee.

PS Thanks to Bankruptcy Law Network founder Jay Fleischman for his creative genius in helping write this post.

Image credit:  Carol Browne

Miscellaneous fees in the U.S. Bankruptcy Courts increase again on November 1, 2011.  The filing fee to initiate a bankruptcy case is not technically changing, but the “administrative” fee is going up $7 so the total fees that must be paid to file a new bankruptcy case go up by $7.

The new total fees to start a new bankruptcy case starting November 1, 2011, are

• chapter 7            $306
• chapter 13          $281
• chapter 11        $1046

Debtors will have to pay $30 to amend schedule d, e, f, g, or h, up from $26.  Creditors will have to pay $176 to file a motion to lift the automatic stay, up from $150.

Other fee increases:

• Certification $11 from $9

• Exemplication $21 from $18

• Record Search $30 from $26

• Adversary Proceeding $293 from $250

• Document Filing / Indexing $46 from $39

• Title 11 Administrative Fee $46 from $39

• Record Retrieval $53 from $45

• Returned Check $53 from $45

• Notice of Appeal $293 from $250

Statutory authority for the bankruptcy court fees is 28 U.S.C. 1930.

Image Credit: Some rights reserved by RangerRick

The National Consumer Law Center has launched the Bankruptcy Mortgage Project, a treasure trove of legal resources about home mortgage issues in consumer bankruptcy cases.

The NCLC website collects local rules, forms, general orders and opinions about consumer mortgage issues from the 352 bankruptcy judges in 89 judicial districts in the United States.  It serves as a one-stop source of information for courts, consumers, trustees, mortgage servicers, attorneys, academics, and others in the bankruptcy community.

There are a myriad of issues and controversies about home mortgages that occur in consumer bankruptcy cases. Hundreds of court rulings have been issued since the current bankruptcy code was adopted in 1978.  Procedures and law differ from bankruptcy judge to judge and district to district.

Chapter 13 is a form of bankruptcy often used by consumers to save their homes from mortgage foreclosure.

Consumers in a Chapter 13 cases generally are not permitted to modify home mortgages, but they may submit a plan to the bankruptcy court in which they propose to cure a mortgage default. The typical “cure plan” provides that consumers will make payments to the mortgage creditor on both the amount they are behind before filing (the “arrearage” payments) and the regular, ongoing payments that come due after filing (the “maintenance” payments). If the plan is approved by the bankruptcy court and the consumer completes the plan, generally in a three to five year period, the consumer should emerge from bankruptcy with a fully current mortgage and the foreclosure will be avoided.  Source:  Bankruptcy Mortgage Project.

Many bankruptcy courts have responded to the increasing volume created by the current mortgage foreclosure crisis by facilitating voluntary loan modifications.  The courts also have adopted local rules and procedures to balance the interests of debtors, creditors and trustees, to address perceived mortgage servicing abuses, and to specify treatment of junior mortgages. The Bankruptcy Mortgage Project website collects these local rules, general orders, and rulings to aid the consumer bankruptcy community.

There are a number of reasons, however, why consumers may have difficulty keeping up with their plan payments. There may be some life-changing event during the plan, such as job loss or major sickness, or the consumer’s mortgage payments may simply not be affordable. Another problem which has been well documented over the years is that mortgage servicers may file inaccurate claims listing amounts owed, may not properly credit cure plan payments as they are made, and may not disclose to consumers payment changes and fees assessed during the plan. It is not uncommon for debtors who successfully complete their Chapter 13 plans to receive a bill for thousands of dollars of previously undisclosed fees once they come out of bankruptcy. Source:  Bankruptcy Mortgage Project.

Here are the categories of documents available for download on the Bankruptcy Mortgage Project site:

Loss Mitigation and Mediation

• Formal Loss Mitigation Program
• Orders Related to State Foreclosure Mediation Programs
• Loss Mitigation Requirement before Confirm./Stay Relief
• Creditor Contact with Debtor not Stay Violation
• Loan Modification and Forbearance Agreement Terms
• Loan Modification Approval
• General Mediation / ADR Programs

Chapter 13 Plan Mortgage Cure Requirements

• Proof of Claim Attachments/Requirements
• Notice of Payment Change and/or Periodic Statements
• Notice of Fees and Charges
• Payment Application Requirements
• Requirement for Trustee Disbursement of Mortgage Payments
• Fee Dispute Resolution Procedure
• Effect of Cure
• Sanction for NonCompliance

Stay Relief Requirements

• Itemization of Fees/Payments History
• Proof of Standing
• General Requirments including Worksheets, Declarations or Other Attachments

Lien Stripping

• Pleadings Requirements
• Service Requirements
• Proof/Valuation Requirements
• Timing and Content of Order
• Availability in No Discharge Cases

Chapter 13 Plans

Bankruptcy is not for liars, cheats and crooks. Debt discharge is reserved for honest, but unfortunate, debtors who need a fresh start in life.

If you do not want to come clean and make a full and honest disclosure of all your financial affairs, bankruptcy is not for you. Only people who tell all there is to tell about their money and property and answer all questions truthfully and completely, no matter how embarrassing it is, and disclose all their property are eligible for a discharge of their debts.  If you want to lie, hide and cheat, forget about it.

Or, if you have lied to your creditors in the past and your lenders have relied on your lies when loaning you money, you will not be rewarded with a discharge of your debts in bankruptcy. This is called fraud and fraud is not welcome in the bankruptcy system.

Criminals cannot commit bad acts and find a safe haven in bankruptcy. Fraud, theft, deception and other crimes are reasons to reject a debtor’s petition for relief.

If you have been cheating on your taxes and not reporting all your income, stay away from bankruptcy.  You have to report all your income on your schedules.  Were you lying on your tax returns then or are you lying now?  Either way you will get caught.

If you have given away your property or sold it cheap to a friend to hide it from your creditors, or want to omit assets on your paperwork, stay away from bankruptcy.  The trustee will get it back, ask the judge to deny your discharge, and report you to the Federal Bureau of Investigation. Fibbing about the value of your stuff doesn’t work either.  Your trustee will check and take it.

The scrutiny of the federal court proceeding will bring unwelcome spotlight on dishonest activities. Filing a bankruptcy petition is done under penalty of perjury, meaning it is a crime to lie. Lying, actively or by omission, hiding property or improperly transferring money or property, are federal crimes. Bankruptcy crimes are reported to the FBI and prosecuted by the U.S. Attorney.

Remember that Chicago mobster Al Capone went to Alcatraz penitentiary for tax evasion (not reporting income from illegal enterprises) not his gangland violence.

Liars, cheats and criminals: stay away. You make it difficult for the millions of honest people who have fallen on hard times and need the debt relief that bankruptcy brings. Your dishonesty makes creditors and trustees suspicious of everyone who has fallen on hard times and needs a fresh start. Because of you, there stern warnings. Because of you, there are audits of paperwork seeking out material misstatements. Because of you, there are investigations.

Fortunately, the bad applies are a tiny fraction of debtors. Denials of discharge and criminal prosecutions are rare. Most debtors are honest.

The vast majority of Americans who file bankruptcy are ordinary people in bad circumstances, many of whom had experienced health issues, job loss or divorce.  They cannot pay their bills through no fault of their own. They are good, honest folks who are granted the much needed relief they seek.

Photo Credit: Some rights reserved by SoulStealer.com

Planning is underway for the National Association of Consumer Bankruptcy Attorneys (NACBA) members only workshop on October 28 and 29, 2011, at the historical Broadmoor in Colorado Springs, CO, at the base of Pikes Peak.

The meeting in Colorado Springs will be the fifth NACBA workshop following prior meetings in San Juan, Tucson, Hilton Head and Las Vegas. The fall workshops feature in-depth sessions on bankruptcy law issues for NACBA members all of whom primarily represent consumer debtors.

The two-day educational program will feature sessions on case law and rules update, ethical responses to U.S. Supreme Court mandates, courses designed for new practitioners and paralegals and staff members of NACBA members, a more advanced track on standing, mortgage servicing, claims, adversary proceedings and contested matters, tax law and debt, fee applications, and a track on the business of practicing law and marketing. The program brochure will be released soon.

There are plenty of extracurricular activities in the Colorado Springs region.  The Broadmoor has three golf courses, tennis courts, fitness center and a spa at the 3000-acre resort.  Nearby is fly-fishing, horseback riding, rock climbing, ballooning, hiking, rafting and sightseeing.

The top 10 activities in Colorado Springs region:

1. Pikes Peak and the Pikes Peak Cog Railway
2. Garden of the Gods
3. Climb the stairs at Seven Falls
4. Air Force Academy Chapel
5. “Gold Rush” days, rafting and casinos at Cripple Creek, 18 miles away
6. Spelunking at Cave of the Winds
7. Drive across the Royal Gorge Bridge, the world’s highest suspension bridge, or ride the train through the gorge, 45 miles away.
8. See where future gold medalists train: Olympic Training Center
9. Cheyenne Mountain Zoo and Will Roger’s Shrine of the Sun
10. Shop, dine, and tour local galleries in Old Colorado City and Manitou Springs.

Attendees will drive to the workshop or fly into Colorado Springs Airport (COS) 15 minutes from The Broadmoor or into Denver International Airport (DIA) 90 minutes away on I-25.

Bankruptcy Law Network author Pamela L. Stewart of Houston, TX., was re-elected director of the National Association of Consumer Bankruptcy Attorneys (NACBA).

The results of the election for the NACBA Board of Directors was announced at the 19th annual convention in Washington, D.C., April 16, 2011. Stewart was elected to a second three-year term on the board.  Other newly elected directors are Mary Beth Ausbrooks of Nashville, TN, and Tara Twomey of Carmel, CA. Ausbrooks fills seat left by Carey Ebert of Fort Worth, TX, and Twomey fills left by Matt Mason of Detroit, MI.

Stewart is co-f0under of Bankruptcy Law Network and president of the Houston Association of Consumer Bankruptcy Attorneys.  In 2003, the Coalition for Consumer Bankruptcy Debtor Education certified Stewart as a Debtor Educator.  A frequent speaker, she has coordinated the educational program for thousands of bankruptcy attorneys at several recent NACBA conventions and workshops.

Twomey is currently Of Counsel to the National Consumer Law Center and served as NACBA’s Amicus Project Director until April 2011.  She has been a Lecturer in Law at Stanford, Harvard and Boston College Law Schools. Twomey is a former Clinical Instructor at the Hale and Dorr Legal Services Center of Harvard Law School. She is a contributing author of several books published by the National Consumer Law Center including, Foreclosures: Defenses, Workouts and Mortgage Servicing and Bankruptcy Basics.

Ausbrooks is a partner in the consumer debtor firm of Rothschild & Ausbrooks, PLLC.  She is a board certified Consumer Bankruptcy Specialist by the Tennessee Supreme Court and the American Board of Certification. She is a leader in the Middle Tennessee Association of Consumer Bankruptcy Attorneys and a speaker on best practices for consumer debtor attorneys.

Bankruptcy Law Network bloggers took the podium as speakers at the convention: Gene Melchionne of Waterbury, CT, Kent Anderson of Eugene, OR, Karen Oakes of Klamath Falls, OR, Susanne Robicsek of Charlotte, NC, Brett Weiss of Greenbelt, MD, Rachel Foley of Independence, MO, David Leibowitz of Waukegan, IL, and Stewart.

Other BLN members attending the NACBA convention were Doug Jacobs of Chico, CA, Cathy Moran of Mountain View, CA, Craig Andresen of Bloomington, MN,  Wendell Sherk of St. Louis, MO, Kurt O’Keefe of Detroit, MI, Dan Press of McLean, VA, Andy Miofsky of Southern Illinois, and Jill Michaux of Topeka, KS.

NACBA’s convention is the premier educational seminar for consumer bankruptcy attorneys. Formed in 1992, NACBA is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy.

Yes, you can file for bankruptcy relief even if the federal government shuts down.  The bankruptcy court will still be open for business and operate in a normal fashion.

Because members of Congress cannot agree on the budget to fund the federal government, there may be a lapse in funding on Friday, April 8, 2011, and the government will cease to provide non-essential services.  The last government shutdown was in 1995.

During a government shutdown, typically essential services such as police, fire fighting, armed forces, utilities, air traffic control and corrections continue.  The federal court system, including the bankruptcy courts, will continue to operate.  The Judiciary has monies from fees and other sources that will be used to fund the court.

Bankruptcy cases are filed 24 hours per day, seven days per week, all year through the Court’s case management electronic case filing system.

Photo Credit:  Flickr by Aaron Pruzaniec

For those of us who like to plan ahead, the National Association of Consumer Bankruptcy Attorneys (NACBA) has announced the dates and locations of the following educational programs:

2010:     19th Annual Convention: April 13-17, 2011, Ward Parkman Marriott, Washington, D.C.

2011:     Members-Only Workshop: October 28-29, 2011, The Broadmoor, Colorado Springs, CO

2012:     20^th Annual Convention: April 24-29, 2012: San Antonio, TX

2012:     Members-Only Workshop: November 2-3, 2012: Amelia Island, FL

2013:     21^st Annual Convention: April 25-28, 2013: San Diego, CA

2013:     Members-Only Workshop: October 25-26, 2013: New Orleans, LA

2014:     22^nd Annual Convention: April 9-13, 2014: New York, NY