Client Name: Date of Initial Interview: CHAPTER 7 BANKRUPTCY PROCEDURAL CHECKLIST (April, 2012)

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1 Client Name: Date of Initial Interview: CHAPTER 7 BANKRUPTCY PROCEDURAL CHECKLIST (April, 2012) Following is a list of the steps from start to finish in handling a typical Chapter 7 bankruptcy case. The listed tasks are in the typical order of sequence. Circumstances may necessitate completing certain tasks out of sequence, which is generally not a problem provided that you keep the case moving forward. 1. Prior to the appointment, complete a conflict check on the potential client. 2. If the client decides to file bankruptcy after considering your advice, and you accept the client s case, before the client leaves: Give the client an Information Worksheet (Questionnaire) to take home and complete, unless the client has already provided the Worksheets. Give the client copies of the two Debt Relief Notices (527(a) and (b) to read, sign and return. These are to be kept in your file. Set a date for the client to return the completed Worksheets and review the Worksheets with you or a trained member of your staff accurately completing the Worksheets. Advise the client that you need a copy of the client s most recent filed federal and state tax returns, together with copies of their W-2s and any 1099s to ascertain the source(s) of their income. Confirm when you will receive the copies of the tax returns from the client, or determine that the client does not have copies of the returns. (a) If necessary, have the client sign and date the Internal Revenue Service (Form 2848) and Oregon Department of Revenue authorization forms so that you can obtain relevant tax information. 04/01/12 1

2 If the client is employed or has been employed within the last six months, advise the client you need copies of the client s pay stubs or other evidence of wages for the six month period immediately prior to the month in which you file the petition; and copies of pay stubs or other evidence of payment for the 60 day period immediately prior to the date the petition is filed. Advise client to access annualcreditreport.com and print copies of client s credit report from each of the three national consumer reporting agencies (Equifax, Experian, and TransUnion). Access Kelly Blue Book (kbb.com) and determine the trade-in and private party values for the client s cars. Print a copy of the results for the file. Discuss with the client the necessity of completing the required credit counseling courses, and give the client a copy of the applicable information for the credit counseling course. Determine if a post-interview conflict check needs to be done. For instance, are there any other persons involved with the client s situation, such as roommates, fiancé, former spouses, fathers of children, relatives (if involved in any manner with debtor s financial affairs), co-obligors on debts, co-owners of any property, including bank accounts. If so, run a new conflict check and review results. Determine if client has right to federal or state tax refunds and/or non-dischargeable tax liabilities. 3. Arrange appointment with client to review the completed Worksheets with you or a trained member of your staff. Review the completed Bankruptcy Worksheets with the client to confirm all information is complete and all the questions have been answered. Confirm no preferential transfers. Confirm no fraudulent transfers. Confirm that client s annual gross income is below the means testing threshhold. 04/01/12 2

3 Confirm whether or not client has any non-exempt assets. Determine if client has right to receive tax refunds. Determine if client has any non-dischargeable tax liabilities. If the Worksheets are not complete, or the information is confusing or facially inaccurate, instruct the client to obtain the missing information or clarify the confusing information. 4. Begin drafting the bankruptcy petition. It is rare that the petition is able to be fully completed based on the information in the Client Information Worksheets. Complete the petition with the available information, and instruct client to supply the additional information needed. 5. The client must complete a credit counseling course and provide you with the certificate of completion. 6. Schedule an appointment for the client to sign the petition. The appointment will typically last at least 1 ½ hours. Remind the client that on the date the client signs the petition, we will need to know the (1) amount of cash on hand; (2) the exact balance of each bank account - not considering outstanding checks; and (3) if the client is employed, the amount of accrued but unpaid net wages owing to the client by the employer. Remind the client that you need exact figures, and the client may not guess or estimate. Remind the client that you need copies of all pay stubs or other evidence of payment of wages for the six month period preceding the month during which the petition will be filed, and for the 60 day period immediately prior to the date the petition is filed. Remind the client that you need copies of the most recent filed state and federal tax returns, as well as copies of the applicable pay stubs. Based on the information that you have, calculate the client s gross income for the six month period ending on the last day of the 04/01/12 3

4 month before the month in which the petition will be filed. You will also want to calculate the withholdings for the last six months to insert that information in the Means Test where applicable. 7. The client comes to the office to sign the petition. All of the information in the petition must be accurate as of the date the petition is signed. Current amount of cash on hand. Bank account balances. Accrued but unpaid net wages (this information is not always known at the time - will obtain information from employer after petition is filed). Gross income for six month period ending on the last day of the month preceding the date the petition is filed. Confirm that you have the following: Copy of most recent filed federal tax return, or a transcript thereof from the IRS. If client does not have the document, confirm date that the client will provide the document. Copies of pay stubs or other evidence of payment for the immediately preceding 60 days. Certificate of course completion from credit counseling agency. Confirm with the client that before the client s 341(a) hearing you will need copies of any bank account statements covering the date that the petition is filed. Confirm that the client has reviewed the petition and does not have any changes. (Very important to verify Social Security number with client before filing petition.) Have the client sign the petition. 8. File the petition with the Bankruptcy Court. [**see instructions below] 04/01/12 4

5 File the petition as soon as possible after it is signed by the client. Typically, the petition should be filed the same day or the next day after signing. 9. As soon as reasonable possible after the petition is filed: Determine the identity of the trustee, the date of the 341(a) hearing, and the filing fee installment due dates and amounts (if client applied to pay filing fee in installments). Calendar the date of the 341(a) hearing. Send a letter to the client confirming the date and location of the 341(a), the documents that the client must bring to the hearing, and filing fee installment due dates and amounts. Either with, or within 15 days following the date of filing, send or to the US Trustee copies of all payment advices received by the client within the 60 day period immediately preceding the filing of the petition. Send or to the trustee a copy of the most recent filed federal tax return or a tax transcript thereof, and all attachments. [Trustees usually want to receive copies of the state tax return as well.] This must be provided no later than 7 days prior to the 341(a) meeting. 10. If client applied for a waiver of the filing fee, periodically check PACER to determine if the application was granted. Print the Order for the file, and send letter to the client confirming that the application was granted. 11. Prior to the 341(a) hearing, confirm that you have the following: Copy of the debtor s bank statements covering date the petition was filed. Copy of the debtor s pay stub covering the date the petition was filed. Copy of vehicle registrations and titles to any automobiles owned by the debtor. 12. Attend the 341(a) hearing. 04/01/12 5

6 Attend the 341(a) hearing. Eugene hearings are usually held on Mondays at the Wayne L. Morse U.S. Courthouse, 405 East 8 th Ave., Eugene, Oregon. A typical hearing lasts about 5-10 minutes, although waiting time may be considerably longer. In most cases we will meet the client at the hearing. Confirm with the client the requirement to complete course on personal financial management within 45 days of the hearing, and provide you with a copy of the certificate of completion. 13. The client must complete a personal financial management course within 45 days following the date of the 341(a) hearing. Calendar the date which is 45 days following the date of the 341(a) hearing. Call or send letter to client reminding client to complete the personal financial management course and provide you with the certificate of completion. 14. Electronically file the certificate of completion of personal financial management course. [***see instructions below] Received the certificate of completion for personal financial management course. Electronically (or paper) filed certificate of completion for personal financial management course. 15. Approximately 60 days after the 341(a) hearing, the court electronically files the Order of Discharge and closes the client s case. You will receive the Order of Discharge through the ECF system. Received copy of Order of Discharge Letter sent to the client closing file, terminating representation, and returning any documents which belong to the client. Thomas Huntsberger, author of this Checklist, gratefully acknowledges use of a similar Procedural Checklist prepared by Richard Slottee for the March 3, 2010 Pro Bono Bankruptcy Clinic Seminar presented by the Oregon State Bar Debtor-Creditor Section /01/12 6

7 - **INSTRUCTION FOR ELECTRONIC FILING OF PETITION AND MISC. DOCUMENTS: [make sure you have a folder on your desktop for Short-Cut to Out - Collier Top Form tech will help set this up.] 1. NOTE: do not file Form 21 Statement of Social Security # - Ban Court gets this info from the debtor.txt filed at the same time the Petition is filed. [we retain the signed Form 21 in our file] 2. In TopForm prepare case for E-Filing - do not Matrix - upload Creditor.txt instead 3. You will need to do this two times: once for Petition packet; once for Means Test [rename the first electronic file or this will write over the Petition packet] 4. Scan the Debt Counseling Certificate in and save as pdf in the Short Cut to Out folder on the desktop 5. when preparing for electronic filing of petition packet: make sure documents are in this order: Petition 3 pages; Exhibit D (file Certificate of Counseling as a separate event and by itself-if codebtor, file both certificates together); [Court no longer wants Exhibit C] Disclosure of Attorney Compensation Debtor s Statement of Intent two pages Summary of Schedules (two pages Statistical Summary is page 2) Schedules A-J Debtor s Declaration of Schedules Statement of Financial Affairs ALL electronic documents go to short cut to out folder 6. Log into ECF site for Court BAN - CASE UPLOAD [this is easier than using open a bk case There will be Browse boxes for the following: Debtor.txt Petition.pdf Creditor.txt Certificate of Counseling.pdf [this is the pre-filing counseling) Then go to: BAN - MISC - Chapter 7 Means Test - Browse to Shortcut to Out ALWAYS - go back to Bankruptcy and appoint Judge and Trustee and 341(a) hearing date NOTE: to get a copy of Notice with Court seal - log into regular Pacer - Query - Run Query - (right click on) Notice of Ban Case Filing - left click on Open... Notice with Seal 04/01/12 7

8 appears - print this for file. You would also use this Notice to advise any party in a lawsuit or foreclosure of the bankruptcy filing. Copies can be faxed or ed to any party. Since Sep. 2011, the Court has a new format - to get the receipt for the Case Upload, Query, Docket Report, click on Petition, click on Receipt and print. ***INSTRUCTIONS FOR FILING CERTIFICATION OF COMPLETION OF FINANCIAL MANAGEMENT COURSE: 1. As soon as clients have completed the financial management education course, and you have been provided with the actual Certificate, prepare the Form 23 out of TopForm - client will need to sign the Form 23, Debtor s Certification. Court just wants the Form 23 filed, not the Certificate. Be sure and tickle date for 30 days from 341(a) meeting of creditors to make sure client follows through. **** Form 23 Debtor s Certification of Completion of Instructional Course Concerning Personal Financial Management is to be filed within 60 days of the first meeting of creditors (we recommend 45 days.) Create electronic Form 23, which will be saved to Shortcut to Out - and file with court - miscellaneous event and locate form. 04/01/12 8