Due Diligence

There are certain questions on the Statement of Financial Affairs that have never applied to cases on which I have worked, so I realize I have sort of “tuned them out.” Ask me which questions have to do with garnishments, attorney fees, income, court cases, business info, etc. and I can tell you the question number in an instant.

But when I saw the title of a blog post titled “Statement of Financial Affairs: Question 6,” my mind drew a blank. What is question number 6?

Well, it’s actually two questions: 6a is about assignment of property for the benefit of creditors (“ABC”) and 6b is about receiverships. Okay, for extra credit I’m going to give the official form instructions:

6a: Describe any assignment of property for the benefit of creditors made within 120 days immediately preceding the commencement of this case.

6b: List all property which has been in the hands of a custodian, receiver, or court-appointed official within one year immediately preceding the commencement of this case.

On the Bankruptcy Law Network, Attorney Brett Weiss gives an explanation of ABCs and receiverships. As a matter of fact, his post is part of a series of blogs about the Statement of Financial Affairs.

As Attorney Weiss states at the closing of his blog post:

In the vast majority of individual cases, ABCs and receiverships will not be present.

So good to know, but will likely never have to enter info for SOFA #6.

My aim is to prepare a mistake-free bankruptcy petition. As a virtual bankruptcy paralegal, I spend hours fine tuning the petition and schedules … asking questions of the attorney and clarifying details with the client.I don’t believe a “perfect” petition is possible (we’re all human after all), but I do have my routine topics that I always double-check with the client:

• Social Security Number — Nothing will irk me more than having to amend the SSN. How can the client sign the Statement of Social Security Number and not proofread the SSN? I might have misread their handwriting, I might have a typo, or they might have entered it incorrectly into Rapid Import. I have had married clients both sign the Statement and neither one checked the social security numbers (I know this because I later had to prepare the amendment).
• Complete list of creditors — There are quite a few ways to gather and enter creditors into the bankruptcy software: import a credit report; use the free annual credit report; clients list creditors on intake questionnaire; and/or copies of statements and invoices. I have found that a combination of these methods is necessary because not all creditors will be on credit reports, not all creditors send statements, and clients never list every creditor (they have certain credit cards they want to ‘keep’ or they intend to pay back Aunt Martha ‘outside’ of the BK proceedings).
• Overall completeness (and the possible typo) — Most people do not maintain good financial records. I have discovered that many people throw away their paystubs when they deposit the check in the bank. I’ve been surprised by how many people have to go back to tax preparers to request copies of the tax returns because they didn’t keep a copy (or can’t find it). Then, during the stress of preparing for bankruptcy, they have to gather and provide an incredible amount of their financial information and history. I know that it’s a rare person who actually remembers everything asked for in the bankruptcy forms.

Because I work virtually, I am not present at the document signing appointment when the attorney will ask the client to review the documents and make sure the information is accurate and complete. It is a time-saver for my attorneys if I cover these content specific topics with the client prior the signing appointment. So I speak with the client by phone about what they should be looking for as they review the documents and I repeat it in the email message to which a draft of the petition is attached.

What do I ask them to do specifically? I ask them to please double-check their social security numbers. I ask this very emphatically.

I will tell them that there are several pages in the draft that will list creditors and ask the client to please make sure every creditor they can think of is listed. On this topic I’ll also interject that this means family, friends, neighbors, and every credit card. You’d be surprised how, even at this stage of the petition preparation, a client will say that they mentioned to the attorney that they were going to keep certain credit cards and the attorney said it was okay. (Note to self: alert the attorney that the client likely misunderstood a conversation.)

Finally, I suggest that the client(s) get a cup of coffee and read through every page of the draft looking for typos and checking for anything that needs to be added, deleted, or corrected.  Most clients have never seen bankruptcy forms before and this will be their opportunity to (hopefully) read every word at their own pace. (This is where the memory seems to kick in — it’s amazing what clients remember when they read the actual forms.) I ask the client to send me any corrections, but I also let them know that I cannot answer legal questions that might come up and suggest they make a list of these questions to ask the attorney at their signing appointment.

At the signing appointment the attorney will ask again if the documents are complete and accurate and the client should be able answer pretty quickly because they will have already read the docs and worked through clerical corrections with me. The attorney’s time can be better spent on answering the legal questions about the case and, if the client prepared a list of questions, the client will know that all their questions were answered. Overall, the attorney should spend less time in this appointment because of the clerical review I have already completed with the client. (Of course, some corrections may result from the legal questions and issues raised at the signing appointment.)

Mistakes are bound to happen; it’s the avoidable or careless ones that I work hard to prevent. On the Bankruptcy Law Network, Attorney Däna Wilkinson recently posted: When Preparing for Bankruptcy, You Can’t Be Too Careful. It’s an interesting observation of how an avoidable mistake incurred the ire of the trustee. Fortunately, none of my attorneys have ever told me that they took a tongue-lashing from a bankruptcy trustee due to mistakes in our paperwork. Whew.

I don’t think I heard the term ’short sale’ used much by the general public before 2007 or 2008, but now it seems to be used as commonly as ‘foreclosure.’ More and more clients mention ’short sale’ when I am speaking with them to clarify information on their intake questionnaire. Somehow they got the idea that a short sale would be good for them based on advice from radio programs, commercials, and even well-meaning friends and relatives.

As a bankruptcy paralegal, I cannot give advice about short sales (or anything to do with handling of assets), but I do want to understand the effect a short sale would have on a bankruptcy case. California Bankruptcy Attorney Michael G. Doan authored an article on this topic on the Bankruptcy Law Network, “Bankruptcy and Short Sales: California,” which provides a good explanation of short sales and bankruptcy.

On Blog for Profit, Grant Griffiths posted “Sometimes You Just Can’t Help But Smile…” It’s a fabulous the-whole-world-breaks-into-song-and-dance video. When you need a smile break, set aside a few minutes to watch it!

If you need a double-smile, go back to my earlier post: Rockin ‘Guerilla Marketing. In that post, I linked to another of these fun videos that I originally saw on Larry Bodine’s Law Marketing Blog.

New Hope Software, Inc. announces its VBA version of Bankruptcy2009

A press release was issued last Friday by New Hope Software, Inc., publishers of Bankruptcy2009, announcing the Virtual Bankruptcy Assistant version of their bankruptcy software. As stated in the press release:

Bankruptcy2009, the most user friendly and feature rich piece of bankruptcy software in the industry, will immediately be available to all virtual bankruptcy assistants at no cost.

The first bankruptcy software company to recognize the value of Virtual Assistants

In my opinion, it’s a positive step (and a very big deal) to have a software publisher of New Hope’s stature recognize and support the benefit of the virtual assistant to bankruptcy attorneys. Their website calls it a “win-win situation.”

Benefits to VBAs and Virtual Paralegals

I can sing the praises of Bankruptcy2009’s VBA version as I have been using the “beta” version for a couple months and have found it to be time-saving and intuitive to my needs. Because I work with multiple bankruptcy software programs I believe I can offer some insights to how this version differs from the competition and the benefits for virtual paralegals.

Installing the different bankruptcy software programs.

One of the most obvious benefits shows up right at installation:

• Bankrupty2009 – new VBA version: Only one installation of the program on my computer is required no matter how many of my attorneys use it.
• Best Case: requires me to create partitions on my hard drive for each attorney that uses Best Case and install the program on the partitions. So, four attorneys use Best Case? Four partitions with four separate installations of the software. (Do you know how to partition your hard drive?)
• EZ-Filing: similar issue in that it has to be installed once for each attorney using it, but does not require partitions; separate Windows folders will do.
• BankruptcyPro: I haven’t used this software for awhile so I can’t remember if installation requires partitions or if folders are okay. I do recall that it requires one installation per attorney.

Software Maintenance issues.

Now consider the maintenance: every time a software publisher updates or upgrades their software, I have to make sure I run the update/upgrade on every installation of that publisher’s software.

Or this scenario: the Census bureau figures are adjusted or bankruptcy forms are modified and all software publishers issue updates. Now every installation of every program has to be updated. I have to actually stop my work on bankruptcy cases and set aside time to do maintenance on bankruptcy software.

The exception is the new VBA version of Bankruptcy2009. Since there is only one installation on my computer, any update or upgrade has to be run just once. I’m assured that my software is now current for all my BK2009 attorneys and I get on with my work.

Bankruptcy2009 makes day-to-day use easier.

As much as I appreciate the maintenance time saved with Bankruptcy2009, it is in the day-to-day use where I feel this version excels.

Other software requires shut-down, open, shut-down, open, etc.

Here’s an example of my typical day:  I’m working on a case (#A) for attorney Joe when attorney Jane calls about one of her cases (#B). If attorneys Joe and Jane both use Best Case, I have to shut down Best Case and re-open the version on attorney Jane’s partition (similar for EZ-Filing). If Joe uses Best Case and Jane uses EZ-Filing, I can run both programs, but added to other programs I have running (Acrobat, Outlook, Word, Norton, etc.) they can use up resources and slow down my computer.

Bankruptcy2009 allows you to quickly switch to another attorney’s cases.

Bankruptcy2009’s new VBA version hit it right on the mark when it comes to making it easier for a virtual paralegal to move around from case to case. In the example above where attorney Jane has phoned, I simply click the icon to close case #A, select attorney Jane from a drop down list of my BK2009 attorneys, then open case #B. All done within the software program; no shutting down and restarting software programs or running more than one program.

Bankruptcy2009 helps me keep attorneys and jurisdictions correctly assigned.

Because of how set up files are created for each attorney, Bankruptcy2009 knows which cases are attorney Jane’s and which are attorney Joe’s. When I click to open a case file for attorney Jane, only her cases will be listed.

The friendly tech support folks at New Hope also taught me how to create and use separate set up files when an attorney practices in multiple districts. Say an attorney practices in both NY and NJ. Some of that attorney’s info will be the same for both districts, but much will be different, especially to comply with local rules.

For these situations, I now have unique set up files for this attorney for each district in which he practices. The result being, for example, that only the NY cases will appear on the case list when my BK2009 is set to NY jurisdiction. When I change it to NJ, the case list will change accordingly. Also, the forms prepared for ECF will always show the correct district without requiring me to remember to double-check.

Designed specifically to make me more productive.

As a virtual paralegal, I pay absolutely nothing to use Bankruptcy2009; nor do my attorneys pay extra for me to use the VBA version of the software. Simply put, New Hope Software designed and distributed a version of software that enhances the ability of bankruptcy attorneys to work with virtual assistants and they don’t charge for it. Why?

Because it has become economically feasible and technologically possible for bankruptcy attorneys and virtual paralegals to work together. With the launch of its VBA version, Bankruptcy2009 has become the best choice of bankruptcy software for such a working relationship and will likely capture a large market share as a result.

Okay. So I already did a very lengthy post on Reasons Not to Use a Paralegal for Your Bankruptcy Case. But this “money-saving” idea of hiring a paralegal instead of an attorney to prepare bankruptcy documents has reared its ugly head once again. So I want to be very clear about my opinion: the only people who should hire paralegals to work on bankruptcy cases are attorneys who are going to oversee and direct the paralegal’s work.

Need more convincing? Read an excellent article on this topic by Oklahoma Bankruptcy Attorney, Dan Nunley: Can I Just Use a Paralegal to Prepare My Bankruptcy Case Documents in Oklahoma?

It’s been more than 6 months since I addressed the question, “Have you considered Online Client Questionnaires?” Since then I have spoken with quite a few attorneys who have wanted more information about this topic. It came up again yesterday when I received this question from a virtual bankruptcy assistant (VBA) inquiring about Bankruptcy2009™ software:

“… have you tried their ‘Rapid Import™’ feature where the clients log in and fill out info online?  I worry that they’ll make a mess of it and you spend even more time fixing the input.”

In my original post last August, I compared the features of MyCaseInfo and Rapid Import, but did not really discuss whether or not I felt an online questionnaire “saved time.” I think you need to look at saving time from the perspective of the client and the perspective of the paralegal.

For the Client: Is the client going to do a better job completing an online questionnaire than they would with a paper questionnaire?

• Will the client be comfortable completing an online questionnaire? For some, yes; but not for all. If I was filing bankruptcy myself, I’d rather fill out online forms. I prefer my computer keyboard over a pen. But not everyone is comfortable using the internet and the client may not know how to move back and forth in the various screens of the questionnaire.
• Is it convenient for the client to get online to complete the questionnaire? If you live is a place like Seattle, it’s unheard of for a house to be ‘internet-less.’ But I have worked with clients who don’t have internet in their homes (anymore). You don’t want to force a client to use a public computer or go to a family/friend’s house to complete their questionnaire.
• Will you get complete answers from the client? First off, some clients don’t give complete answers on paper questionnaires, so paper or online will not be a factor with those clients. The most common response I get from clients when they have given the wrong or incomplete information for a question is that they did not understand what the question was asking. In my opinion, better answers will be given if more time is spent re-wording the questions on the paper or online questionnaires (Rapid Import will allow you to reword questions, MyCaseInfo will not).

For the Paralegal or VBA: I’ve had attorneys ask if I would lower my fee for cases where the client has completed an online questionnaire. The theory is, of course, that the client has done the largest portion of work by ‘typing’ in all the information. In my opinion, working a case from an online questionnaire is generally no faster than entering it myself from a paper questionnaire. Here are some reasons why:

• Wording or phrasing of Answers. There is no way that a client will enter their answers in the format that the attorney wants to use on cases that are filed with the Court. I work for lawyers around the country and no two use the same language for their cases, even if they’re in the same district. So I take the all answers provided by the client and “re-word” them correctly for the schedules.
• Content or completeness of Answers. Similar to wording or phrasing, a client will never know how much or how little information to give in response to a question. For example, in one of my districts we list household goods on Schedule B this way: Household goods and furnishings. That’s it. One entry for everything in that category. In another district all items are separated and it can take 2 pages to list them all. A client will never complete it the way it needs to be done. I’ve had clients do an item by item inventory of their home (seriously) and then I’ve had to simply add it up and make it one entry. On the other hand, many clients are overwhelmed at the idea of pricing their belongings and they leave it blank altogether (necessitating follow-up).
• Accuracy of Answers. Not everyone can ramble off the differences between secured, unsecured, and priority debts. Try saying the word “arrearage” to a client and see if they know what you’re talking about. Even the most diligent client will not understand everything that is being asked of them and they will enter answers in the wrong places (like ¶3b instead of ¶3a on SOFA).

In the above examples, one thing is common: time spent editing. If I’m working from a paper questionnaire, I type the information from scratch. If the client completed an online questionnaire, I edit or delete what the client entered and enter any info that the client omitted. And, whether it’s paper or online, I have to review every answer given by the client. In this regard I prefer Rapid Import over MyCaseInfo as it provides a PDF version of the client’s answers … almost like you’re getting both the online questionnaire and its paper counterpart.

I don’t believe an attorney should limit their client intake to online questionnaires only. You will attract some clients because they can complete the info online, but you will likely lose other clients. Offer the option of a paper version for those who are more inclined to paper and pencil (but please tell the clients to use ink!).

As the paralegal working on the case I allot the same amount of time to complete a petition whether it is generated from an online questionnaire or paper questionnaire.

Online Best Colleges.com posted a list of recommended Twitter feeds from a variety of legal professionals. From law students, to law librarians, and, of course, lawyers, their list includes a wide sampling of some of the most popular legal tweeples … many of whom I follow already. (I am honored and grateful that they included my Twitter feed in their paralegals category.)

If you’ve been thinking about trying Twitter but are not sure how to start, check out Online Best Colleges.com’s list of the Top 100 Twitter Feeds for Law Students. Follow anyone on the list who seems interesting or follow them all! The best way to learn Twitter is to listen to what others are twittering.

PS: I twitter at @Lrantz

New means test figures become effective on March 15th. Be sure to update your bankruptcy software.

I’ve already updated all of my software because some cases are scheduled to file after 3/15, so I need to be working with the new figures now.

Recently I posted “Reasons Not to Use a Paralegal for Your Bankruptcy Case.” Now comes the question, “Can Software Be a Bankruptcy Petition Preparer?” (This was posted by St. John’s Law Student Thomas Szaniawski on the Bankruptcy Case Blog.)

We live in a Turbo Tax-mentality world. We’re used to having websites and software programs that allow DIY for almost any task. (Even our new Treasury Secretary uses Turbo Tax.) And if we have choices of tax software to prepare our tax returns without consulting CPAs or tax attorneys, then why shouldn’t there be software that gives us the ability to prepare our bankruptcy documents and bypass bankruptcy attorneys?

If I worked in tax law, I might be able to answer why Turbo Tax and other tax software programs are not considered legal advice when they tell you what forms to use and how to get the best deductions. What I do know about bankruptcy law is that the bankruptcy courts are very strict about unauthorized practice of law (UPL) and what might be a typical feature in Turbo Tax can be a big taboo in bankruptcy law.

For example, besides the 1040, can you give the form names or numbers that Turbo Tax used for your return this year or last? Could you have gone to the IRS website and chosen and downloaded all those forms on your own without Turbo Tax? Likely not … that is why we pay for Turbo Tax, H&R Block, or other tax software every year.

When it comes to bankruptcy, telling you which forms you need (even without telling you what to put on those forms) is considered giving legal advice and the only people who can do that are licensed attorneys. The case presented in Thomas Szaniawski’s blog article refers to a software provider who sold bankruptcy software. The Ninth Circuit Bankruptcy Court found this provider to be a bankruptcy petition preparer and that the features of the software constituted UPL because it did more than just “typesetting.”

It may not be an easy concept for the lay person to understand, but it’s the way it is in bankruptcy courts. DIY really means DIY. Don’t look to any para-professional or software program to “help” because help beyond typing will likely be considered legal advice.