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
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
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

51. 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

52. 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

53. Your Spending Plan
If you have $ 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 $ on transportation each month

54. Spending Plan The same goes for home maintenance
If you have $ 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

55. 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

56. 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

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

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

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

60. 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

61. 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

62. 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

63. 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

64. 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, cost?

65. Or

66. 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

67. 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

68. ..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

69. 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 $ for that TV at $16.00 a week
Or you can buy one from them for $ cash
Etc

70. 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

71. 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…..

72. 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

73. 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

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

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

76. 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

77. 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

78. 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

79. 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

80. 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

81. Take Charge of your Financial Future