Bankruptcy Success: Trustee's Office Duties & Debtor's Responsibilities

1. Welcome

2. Overview of the Morning • How to Succeed at your Bankruptcy • Financial Management and using the tools Bankruptcy provides

3. Duties of the Trustee’s Office • Administer your bankruptcy Review your plan Insure your plan provides for all your creditors Determine whether your plan is feasible Act as a mediator between you and your attorney

4. What the Trustee’s Office Can’t Do • Give Legal Advice • The Trustee’s staff is familiar with the guidelines and policies for Chapter 13 and is well qualified to assist you with your non-legal questions • Recommend an attorney

5. Your Attorney’s Role in the Bankruptcy • To communicate with you • To appear in hearings • To advocate for you, the client, within the rules of the court

6. Your responsibilities as a Debtor • To comply with the Bankruptcy Court orders • To provide documents requested by your attorney and the Trustee • To make your payments every month • To let your attorney know of payment changes

7. Schedules • Accuracy of your schedules • Did you list everyone that you can sue including Social Security Disability, Workers Comp, personal injury? • Did you list all your vehicles including kid’s cars your name is on the title for? • Did you list all bank accounts, IRA’s 401k’s and Roth IRA’s? • Did you list everyone you paid more than $500 total to in the 90 days before you filed? • Did you list all friends and family you paid back in the last year?

8. Creditors • Accuracy of your creditors • Did you list EVERYONE you owed money to- gas cards, Target, Mom, Dad or friends? • Did you include complete addresses for everybody you owe money to? • Did you list student loans, child support obligations, taxes owed?

9. Income • Accuracy of your income • Did you list all income including second jobs, side jobs, bonuses, rent, tips and child support? • Did you get a raise or demotion since you filed? • Did your income change with overtime or loss of overtime? • Did you list income from all others that live in the same household with you- husbands, wives, boyfriend, girlfriend, housemates?

10. Expenses • They must be accurate and reasonable • Motorcycles • Lake Property • Boats • 401k Loan Repayments • Private Schools • These expenses may not reasonable

11. In a Nutshell… • What do you have to do to move your bankruptcy forward? • Be accurate on your schedules • Make your payments • Provide the documents and items needed by the Trustee • Meet the disposable income test • Meet the best interests of creditors test • If you are a 100% pay plan, these tests do not apply

12. Guideline on Payments to Trustee Miller’s Office • Payments • First due 30 days after filing your voluntary petition • Send to PO Box in Memphis-use the stickers provided • Money order or cashier’s check • Put case name and number on all correspondence and payments • If you can’t make a full payment- call your attorney. • If a payment is missed for any reason, the Trustee or one of your creditors may file a motion to dismiss your case

13. Wage Orders • Your plan payment is deducted directly from your paycheck and sent to the Trustee • 98% of those who succeed in bankruptcy are on wage orders • If your wage order has not started and your first payment is due, it is your responsibility to send in your payment • If you are on a wage order and your hours at work make it impossible for your employer to send in the full payment, you are responsible for the difference • If you change jobs, the wage order will not follow you

14. CYA

15. Reasons your plan payment may go up or your plan is extended • If your plan fails to pass the Disposable Income Test or the Best Interest of Creditors Test • Mortgages – If your payment goes up, if there is a shortage in your escrow account, or if you have a variable interest rate that increases the payment • If your income increases substantially • If there are more claims filed than provided for

16. Forced Place Insurance • If you fail to retain insurance on your home, the mortgage company will place forced place insurance on it • The cost is twice as much as regular insurance • Only covers the lender’s interest in the house

17. Tax Returns and Refunds • Tax returns and refunds • Refunds are ASSETS of your bankruptcy. • You are REQURIED to turn over your tax refunds each year as outlined in your plan. • You are REQUIRED to turn over copies of federal and state returns each year as outlined in your plan. • If you choose not to follow the terms of your plan and fail to turn over your tax refunds AND returns- we will ask the court to dismiss your bankruptcy

18. No Debt You CAN’T incur debt. That means… • No student loans • No car loans • No 401k loans • No refinancing house • No credit cards – either existing cards or new ones

19. If you think you need to incur debt C Y A – you will need permission from the Trustee or the Court Medical Emergency

20. Possible Roadblocks • Bumps and Hiccups • Lay offs • Job change • No overtime • Lots of overtime • Bonuses • Accidents • Car accidents • House fires • Illness • Divorce

21. Communicate Difficulties • Don’t be an ostrich and stick you head in the sand. • CALL YOUR ATTORNEY • Let the Trustee’s office know there are issues.

22. Call Your Attorney • Make sure you C Y A if you see • Motions for Relief- that is a creditor trying to get permission from the court to repossess your car OR foreclose on your house. • Motion to Dismiss or Convert- this document means you have not followed the terms of your plan and your bankruptcy could be dismissed

23. Notify your Attorney and the Trustee’s office if you move – it is essential that we have your current address Read your confirmed plan – This is how your debts will be paid in the next 3-5 years Save all paperwork –Schedules, plan, copies of all money orders and especially your discharge papers

24. Dismissed vs. Discharged • Dismissed – The terms of your bankruptcy were not fulfilled. It is as if you never were in bankruptcy. All late fees are again due and the stay that protected you from creditors has been lifted. They can repossess your car and foreclose on your house • Discharged – The terms of your bankruptcy have successfully been completed

25. Some Debts You Will Still Owe Even After You Have Been Discharged • Primary Home Mortgages • Child support and child support arrearages not completely paid in your bankruptcy • Government funded or guaranteed educational loans or benefit overpayments

26. Additional Learning Tools • Our office will offer periodic seminars. • Information to help you work with the credit bureau to improve your credit near the end of your bankruptcy. • On budgeting by experts. • On resources for small businesses from SCORE, SBA, Chamber of Commerce and taxing authorities.

27. Opening the Door to Financial Freedom • Realize you have the power to shape your financial future • Identify what is important to you • Create a spending plan that reflects your values and goals • Re-evaluate your plan regularly

28. Myth Buster • Financial Success IS NOT WEALTH!! • It is living within your means or better yet below your means

29. How to Become Financially Successful • Assess Your Needs • Identify Goals • Make A Plan • Take Action

30. Needs vs. Wants • Needs –essential to survival • Wants – those things that reflect who we are and what we value in our lives

31. Setting Goals • Goal setting is an important tool you can use to create positive changes in your life • Allows you to see what changes you want to make • Provides you with a plan of Action

32. Goals • Makes it possible to measure your progress • Gives you a sense of accomplishment

33. Make Your Goal Measurable • Goals should be specific and measurable • Having a measurable goal makes it easier to achieve, easier to monitor, and….

34. Write Down Your Goals • Writing down your goals helps you focus and can provide you with a reminder of what you are trying to achieve • Put them someplace where you will see them often • Writing down goals creates a greater sense of commitment to accomplishing them.

35. Fun Fact • 95% of people who write down their goals are successful in accomplishing most of them.

36. Short Term and Long Term Goals • Write down clear goals for today, tomorrow, and the years ahead • Short terms goals – will give you a more immediate sense of satisfaction • Long term goals – Those goals that will require 2 or more years to complete • Detail the steps you need to take • Identify the obstacles you will have to overcome to reach your goal

37. SMART • S Specific – See your Goal • M Measurable - Allow sufficient time and money to make your goal achievable • A Attainable – Make sure your goal is reasonable and possible • R Relevant – Your goal must fit your needs • T Time Related – Set reasonable time limits

38. Six Week Financial Goal • In your folder, please remove the card that says “Financial Goal- Six weeks from now my goal is…..” • Please take a moment to write a SMART goal and insert it in the envelope provided. • We will return the envelope to you in 6 weeks- to let you see how you are doing!

39. Create a Spending Plan • This is unique to each individual • Your plan should reflect what is important to you • It should be achievable and measurable • Write it down

40. Top Ten Benefits of a Spending Plan • Lets you know where your money is going • Helps you decide how to use your money • Makes it easier to save for something specific • Takes the guilt out of spending • Shows you where to cut spending if necessary

41. Helps you live within your income • Provides a financial record • Makes it easier to talk about spending with your significant other • Lets you assess your financial progress

42. #1 benefit of a spending plan • Gives you more control

43. Schedule J • Schedule J is a listing of your expenses. • This is your spending plan while you are in bankruptcy • This will not be easy, but if choose to live by the expenses listed on Schedule J you will succeed in Bankruptcy

44. Your Spending Plan • These expenses fall into 3 different categories; • Fixed • Variable • Periodic

45. Fixed Expenses • Fixed expenses occur regularly and do not change much. These include expenses like mortgage payments and rent. • Fixed expenses are difficult to reduce

46. Fixed Expenses • Fixed expenses are easily planned for because they are so predictable; therefore they should form the core of your spending plan.

47. Fixed Expenses and Schedule J • Some of the expenses listed on schedule J fall into the fixed category • They will not change month to month • Internet, cable – property taxes and insurance

48. Variable Expenses • Variable expenses are less predictable • Variable expenses fluctuate month to month • Generally, you can exercise more control over variable expenses • Thus this is the best place for making changes in your spending plan

49. Variable Expenses and Schedule J • Some of your expenses on schedule J are considered variable • These can include; electric, gas, food, recreation • This is the area where you can, in part, control what the monthly expense is • If you need extra money during a month this is the easiest place to find it

50. Spending Plan and Variable Expenses • You will not spend the same amount of money at the grocery store each week • Some months will be more, some will be less • If you do not spend it – Save It! • This will give you extra money in case of an emergency