Top Ten Wastes of Time After BAPCPA

09 Oct Top Ten Wastes of Time After BAPCPA

When I sat down to write about the top ten changes in my practice attributable to BAPCPA, I realized (to my surprise) that some of those changes were positive. A fellow blogger suggested that I write about the top ten wastes of my time as a result of the bankruptcy amendments which took effect not quite two years ago. So here goes:

1. Explaining credit counseling to clients whose property is in foreclosure. Credit counselors have nothing to offer those whose property is being foreclosed, yet there is no way to waive the requirement. It makes no sense, it wastes my time, my clients’ time, and frankly, the credit counselor’s time.

2. Tracking down credit counseling certificates. When you do your credit counseling, the agency will issue a certificate. If you do the counseling in person, they will probably give you a paper certificate. If you do it online or by telephone, the certificate may be e-mailed or snail-mailed to you or your attorney. Whatever the mechanism, they get lost. A lot. My spam filter gets a lot of them that are e-mailed to me. I try to remind clients that if the certificate is to be sent directly to me, call me to confirm receipt. That way we aren’t delaying a finding because we need a certificate.

3. Getting my clients to attend credit counseling again because their credit counseling certificates have expired. This happens because the credit counseling certificates are valid for six months. Certificates expire because it takes time to gather information, find an attorney, and put together the paperwork necessary to file. Sometimes clients decide to wait, exploring other options. Sometimes my advice is to wait to file for any of a number of reasons. Many of my clients have done the credit counseling before they come to see me. It’s not a big deal to do it again if necessary, but it’s probably better to talk to an experienced bankrutpcy lawyer about the timing before you do it. (Some attorneys also have strong preferences about where you go for counseling, as well.)

4. Reminding clients to do the financial education class after filing. Credit counseling comes before your case is filed; this one is after your case is filed. If it is not done on time, the court will close your case without issuing a discharge, so you will lose the protection of the bankruptcy. This requirement is confusing, because it is so similar to credit counseling, many people consider they’ve already done it. And I think there’s also just a natural reaction to filing bankruptcy–people have been so keyed up for such a long time with worry and stress, and it’s natural to sort of let your guard down. This is one ball you don’t want to drop, though.

5. Gathering pay stubs and payment advices for all income for the seven months before the bankruptcy petition. The “means test” is based on the six calendar months prior to the month in which the case is filed, and pay advices for the 60 days prior to filing must be filed with the court. And that’s not just for your job (or jobs)–that’s tax refunds, IRA or 401k withdrawals, unemployment, worker’s compensation, or insurance payments. That paper chase yields very few different results where I practice. The trustees and U.S. Trustee in my district have always focused on confirming income when there was some point in doing so. Frankly, chasing around after paycheck stubs for someone who is earning $7 per hour (and always has) is a collossal waste of time.

6. Explaining the confusing and misleading portions of the disclosures BAPCPA says I have to give my clients, including advising those who have consulted with me (an attorney) that they have the right to consult an attorney. ‘Nuff said.

7. Revising my business cards, yellow pages ad, web page, and e-mail signature to advise all and sundry that I am a “debt relief agency” as that term is defined by the bankruptcy code, and that I help people file bankrutpcy. I had thought for some years that the designation “Certified Bankruptcy Specialist” on my letterhead, business cards, etc., got that message across, but maybe I was wrong.

8. Counting days, months, and years. Not in the abstract, but to determine what portion of the new law applies to what I’m trying to do. There are new limitations on when successive bankruptcies can be filed, and they differ depending on which kind of bankrutpcy follows which. My personal favorite is the “910” provisions, which primarily affect car loans. The idea is that you count 910 days from the purchase of the automobile to determine how the debt is treated in Chapter 13.

9. Figuring out how to refer to specific provisions of the new law, which its drafters neglected to divide up into sentences and paragraphs. The 910 provision mentioned above is one of the culprits here, too. That language is just appended to the end of an existing section, which is neatly divided into sections and subsections (which are dear to the heart of any bankruptcy geek–we love to refer to section 523(a)(2)(B)(iii) and suchlike) but it doesn’t even have a section number, much less subsections. It’s just hanging there–hence it’s most prevalent nickname, the “hanging paragraph.” A judge in my district refers to it as the “flush language,” which I first thought referred to what he wanted to do with it. Sadly, he explains in a footnote that the language is “flush” with the margins–hence “flush language.” I won’t bother you with other instances, too numerous to mention, that require extensive explanation and quotation anytime they are mentioned in a motion or brief.

10. Trying to figure out which state’s exemption scheme applies to anyone who hasn’t lived in South Carolina for the last 730 days (see, another place to count). That’s right, the exemption scheme (property you are entitled to keep) can change depending on how long you’ve stayed in one place. Suffice it to say, it’s complicated and fertile ground for argument.

So, there are my ten biggest wastes of time. They are also good reasons to let an experienced bankruptcy attorney help you through the maze created by BAPCPA.

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