Welcome

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

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

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

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

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

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?

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?

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?

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

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

Guideline on Payments to Trustee Miller’s Office 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

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

CYA

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

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

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

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

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

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

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.

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

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

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

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

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.

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

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

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

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

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

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

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

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.

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

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

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

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!

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

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

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

#1 benefit of a spending plan Gives you more control

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

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

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

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

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

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

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

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

Periodic Expenses These expenses occur from time to time – Some months there won’t be any expenses in this category They are less predictable and harder to control than fixed or variable expenses Often these expenses are emergency ones

Periodic Expenses and Schedule J On Schedule J there are a number of periodic expenses. These include transportation, medical and dental and home maintenance These expenses will not occur every month, but the money needs to be put aside for when they do occur

Your Spending Plan If you have $275.00 budgeted for transportation costs this is how you will pay to have the oil changed, buy new tires and pay for your license plates Chances are good that you will not use the entire $275.00 on transportation each month

Spending Plan The same goes for home maintenance If you have $100.00 listed on schedule J to replace and repair things around the house and do not have to use it for that SAVE IT for when you need it! Water Heater

Fixed, Variable, and Periodic Expenses There is little that can be done with fixed expenses. They will likely be the same every month Variable expenses is where you have the most control of what you spend Periodic expenses do not happen regularly, but money must be put aside for when they do happen

Budgeting Add up all your expenses Variable and periodic expenses should be averaged over a 12 month period. Example – Dental Keep in mind that there are only 2 ways to have more money; Make more Spend less

Budgeting Pitfalls Unexpected expenses Bookkeeping Errors - ATM Impulse Buying – 24 hour rule Forgotten Bills – Quarterly Payments

Remember… Trimming expenses doesn’t necessarily mean doing without… but it may mean doing things differently

Fun Fact If you can save just $3.00 a day, you will have saved $1,095.00 in a year and that is before interest!

Be A Smart Consumer Develop habits now that will serve you well in the future Shop for the best price on the items you use the most Use coupons on items you would normally buy anyway Make a list and stick to it

Myth Buster Money can’t buy… Love – Many people try to fill this need by buying things Happiness – If money could take away sadness, rich people would never be sad

Money Also Can’t Buy… Security – If money could give you real safety, no one who is wealthy would ever be afraid Respect – People you recognize as having power or position in the community aren’t always those with the most possessions

Perception vs. Reality Have you ever sat down and considered how much credit actually costs you? How About… Rent to Own Check Cashing Stores Refund RAL’s and RAC’s

Credit Cards Consider the following scenario; The amount charged is $2,500.00 The interest rate is 21% Only the minimum payment is made each month How long will it take to pay off the balance? What will that $2,500.00 cost?

1-888-567-8688 Or www.optoutprescreen.com

Rent to Own Stores Rent to Own stores are not really credit, but are sometimes used instead of credit A rent to own purchase agreement allows you to use an item for a period of time and return it if you desire Payments are made on a weekly or monthly basis

Reasons to Avoid Rent to Own The cash prices are usually inflated far beyond the cost of a similar item at regular retail stores Often the item was previously rented – which means you are paying premium price for used merchandise Rent to Own stores charge extremely high interest rates

..And if that isn’t reason enough If you are late on a payment on an item from a Rent to Own, the store can repossess that item – No matter how much you have paid If you stop making payments, you will lose the item and have little to show for the cash you’ve already paid towards it

Let’s Compare Say you want to purchase a 24” TV The Rent to Own store offers one for $16.00 per week for a year You would pay $832.00 for that TV at $16.00 a week Or you can buy one from them for $540.00 cash Etc

Something to think about If you saved that $16.00 a week for 3 months you could purchase a brand new TV - with no strings attached

Check Cashing Loans Short term loans that you can take in between paychecks The lender gives you a “cash advance” and charges you a fee When you get paid, the lender cashes the check you wrote But…..

If you need the money from your paycheck when it arrives you have to renew the payday loan This is also called flipping Or you can take another loan on the next paycheck

Reasons to Avoid Check Cashing Loans Can create a “snowball” effect with disastrous results High interest rates – Often in excess of 200% Can be as high as 800% Only provides a short term fix to a serious problem Give me your money

Is it worth it? If you really need a pay day loan you cannot afford to pay up to 800% interest

Remember the old adage… It if seems too good to be true, it usually is

RAL’s and RAC’s Short for Refund Anticipation Loan or Refund Anticipation Check These are advances based on your Federal tax return An RAL is an advance on your electronically filed federal refund You will get your money a few days after your return is filed With an RAC, you get a check immediately

Reasons to Avoid RAL’s and RAC’s The interest rate is extremely high for getting your money a few days earlier There are also additional fees and costs Tax preparation Electronic filing Document preparation Licensing

While in Bankruptcy If you choose to pay to get your refund by a refund anticipation loan or a refund anticipation check The cost must be deducted from the $500 that is your portion of the refund

Succeeding in Bankruptcy Following your Spending Plan will help you successfully complete your bankruptcy You have been given the tools to develop good money management skills and you have the time and protection of bankruptcy to sharpen your skills

Your Spending Plan Money Management is a skill, and like any skill, it needs to be learned and practiced Continue to update your knowledge Teach your children good money management skills Regularly review your Spending Plan

Take Charge of your Financial Future