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By Katy Stech Ferek
WASHINGTON—The legal professionals who ensure people going through bankruptcy aren’t hiding assets are pushing lawmakers for their first pay raise since 1994, saying the robust oversight of the country’s personal-bankruptcy system is at stake.

In a House hearing on Wednesday, consumer-bankruptcy experts said the pay for the watchdogs, called bankruptcy trustees, should be doubled to $120 per case.

The experts said trustees play a vital role in the bankruptcy process by making sure people don’t hide valuable possessions and by returning recovered money to people and small businesses who are awaiting payment. Many are drawn to the work not for the pay, but for the prestige or public-service aspect. For most bankruptcy cases, they get only a flat fee, currently $60—far less than what they could earn for other legal work.

Roughly 1,100 trustees monitor chapter 7 cases, the most widely used form of bankruptcy for individuals. But during the hearing before a subcommittee of the House Judiciary Committee, experts testified they worried that the stagnant pay would lead to fewer competent, honest applicants. Last year, 20 candidates applied for every open chapter 7 trustee position, down from 58 in 2010, according to the Justice Department, which runs the program.

At the hearing, Rep. Tom Marino (R., Pa.) agreed with witnesses, calling trustees “vitally important” to the bankruptcy system. Mr. Marino is co-sponsor of a bipartisan bill that would raise trustees’ pay.

He said lawmakers agree the increase is necessary but they have “different paths to getting there,” referring to who should pay for it.

Trustees can uncover money and return it to pay off a bankrupt person’s debt to small businesses, credit-card companies and other individuals such as ex-spouses, Illinois trustee Neville Reid testified at the hearing. Taxpayers also benefit, he said, noting that chapter 7 trustees distributed roughly $170 million to state and federal tax authorities in 2016.

“Trustees frequently uncover schemes and wrongdoing that lead to prosecutions that prevent further injury or achieve justice for innocent people, even though the trustees frequently do not recover the value of their time investigating such matters,” Mr. Reid said.

The bill discussed at Wednesday’s hearing has support from two influential blocs, the American Bankers Association trade group and consumer-bankruptcy advocates. Several similar proposals have failed in the past.

The latest legislation would fund the pay increase by making bankrupt individuals pay higher fees.

Some lawyers and consumer-focused nonprofits are urging Congress to find another source of money to pay for the increase, such as a new fee for those filing requests for payment from someone going through bankruptcy.

Chapter 7 allows a financially troubled individual to sell property to repay certain bills before a judge cancels some unpaid debt, such as credit-card and medical bills. Last year, 472,190 individuals and couples filed for chapter 7 protection.

Trustees can also receive a second form of compensation beyond the flat fee: money from selling possessions and property valued above the limits of what a bankrupt person is allowed to keep. But cases with trustee sales are rare, occurring less than 10% of the time.

Under federal law, chapter 7 trustees review lists of individuals’ possessions and expenses and later question them in person. The compensation structure gives trustees incentives to look for hidden assets, but the model isn’t always successful. Jason Gold, a Washington, D.C., trustee, said that in at least 2,000 cases—nearly 8% of the total he has taken since 1989—he has spent a few hours to several days on a case only to realize there are no additional assets to sell.

Overall trustee compensation has fallen over the past six years, including an 18% drop in annual pay last year, Justice Department officials said. The decline comes as the number of people who file for bankruptcy each year has fallen since a 2010 peak.

Meanwhile, the number of bankrupt people who are so poor that they don’t have to pay the fee has increased in recent years. The number of chapter 7 cases with waived fees has grown to 4.7% in 2016 from 1.9% in 2007, testified Raymond Obuchowski, a Vermont-based trustee. Mr. Obuchowski has grown a long beard in protest of trustees’ pay, saying he won’t shave until Congress authorizes a raise.

Some consumer advocates say the low pay and drop in filings have driven trustees to be more aggressive in an attempt to boost their compensation.

Tara Twomey, executive director of the National Consumer Bankruptcy Rights Center, said trustees have gotten more creative in their recovery efforts since 2010, including by trying to sell property that bankrupt people would have historically been able to keep. Others have sued colleges to claw back tuition that bankrupt parents paid for their children.

Ms. Twomey supports the compensation increase but doesn’t want bankrupt people to pay for it. She and other consumer advocates said that a 2005 law already increased the costs of a system designed to help people who are financially struggling.

Rep. David Cicilline (D., R.I.) said he wouldn’t vote for the bill in its current form, saying the cost of bankruptcy is already “a great challenge for many people.”
 
Corrections & Amplifications

Jason Gold became a chapter 7 trustee in 1989. An earlier version of this article incorrectly said it was in 1998. (Sept. 26, 2018)

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The best ways handle Amending Bankruptcy Forms in Tacoma
Amending bankruptcy forms is usually necessary if you discover a mistake in your bankruptcy forms, petition, schedules, or other paperwork, you can fix it easily by filing an amended version of the form. The bankruptcy rules enable filers to amend their forms any time prior to they receive a final discharge.
Filing an Amended Bankruptcy Form in Tacoma
To remedy an error on a form, you’ll need a blank copy of the form. You will also need to find out if the Tacoma bankruptcy court has a local form you should utilize to file an amendment.
Some courts enable you to complete only the portion of the form that was inaccurate, leaving the rest blank (other than for your name, case number, and other identifying info). As soon as you’ve finished the amended form in the manner recommended by your court, you’ll check the “Check if this is an amended filing,” box in the upper right-hand corner or you may need to write the word “AMENDED” next to the form title.
Amending bankruptcy forms may require you to complete and file several forms, even if you made just one error. For instance, if you forgot to list the lender holding the note to your automobile, you might need to amend Schedule C: The Property You Claim as Exempt (if you plan to declare that the equity in the car is exempt), and Schedule D: Creditors Who Have Claims Secured by Property.
You Must Complete the Declaration About Individual Debtor’s Schedules
You state under penalty of perjury that all of the contents are appropriate and true by signing the Declaration About Individual Debtor’s Schedules when you submit your bankruptcy petition. Because your initial declaration will not cover the brand-new information you send to the court, you need to complete and file a brand-new declaration with your amended schedules.
Filing Your Completed Forms in Tacoma
As soon as you have completed amending bankruptcy forms, finished a brand-new declaration, and completed any local forms you need to file with your amended paperwork, you will need to file the amendments with the bankruptcy court and pay a fee.
File the amended forms and schedules with the bankruptcy court, following the court’s instructions regarding what order the forms need to be in, the number of copies is required, whether you have to consist of a cover sheet or letter describing the modifications, and so on. You should likewise serve a copy of the amended papers to the bankruptcy trustee and to any financial institution impacted by your amendment.
When You Should Speak to a Tacoma Bankruptcy Lawyer
The bankruptcy rules permit debtors to file modifications to their bankruptcy documents any time prior to they receive the final discharge. However, if you need to file an amended Schedule C, and the judge won’t allow it, you need to speak with an experienced bankruptcy attorney from our Tacoma bankruptcy law office.
The Best Way to Amend Bankruptcy Forms in Tacoma
Many things can go wrong in a bankruptcy when you try to do it yourself or with a non-attorney bankruptcy preparer. The best way to correct a mistake on your bankruptcy forms is to not make it in the first place. Amendments can be problematic and if you are unrepresented, it is up to you to figure out the rules and procedures. You can avoid most common mistakes and ensure your bankruptcy goes smoothly by hiring an experienced Tacoma bankruptcy attorney from Northwest Debt Relief Law Firm. Give us a call. We’re here to help.
The post Amending Bankruptcy Forms appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.

The basic concept of the Life Sucks Budget is that for many of us there is just not enough money to pay the claims of bill collectors AND to pay the really important things of life, like retirement savings, emergency cash accounts, mortgage payments and modest family vacations. Something has to give, and too many of us put ourselves last and pay nothing towards our future needs and dreams so that we can just get by another month without receiving embarrassing phone calls or letters. The Life Sucks Budget is a call to rebalance this relationship and to put our legitimate financial and family needs first.
The fact is, many of you are already on the Life Sucks Budget but you don’t realize it or perhaps you are reluctant to confess that is what you are doing.
Spending 25 years interviewing clients about their financial habits reveals that at least half of the people I meet have no hope of being financially successful. They just want to get through the week and find a little peace in their day. They do not believe that they can win financially, and that mindset has a radical affect on their behavior.
This should come as no surprise. If you were running a 100 meter sprint against Usain Bolt would you train very hard? You already know that no matter how much you train you will never be able to keep up with the world’s fastest man, so why even try?
The evidence of people who think they will ultimately lose in the game of finance is found in their bank statements. The spending pattern is clear, and we review six months of bank statements for every bankruptcy case we prepare.
When you think that the game is rigged and that an average person has no chance of winning, you spend more on restaurants. You enjoy the day. You buy really nice clothes because they feel good and boost your self-esteem. Your cable and cell phone bills are high since you place a premium on being connected. Chances are you lease a car or have a large car payment since you work hard and have “earned” a nice ride. Often your house payment is disproportionate to your income and it drains every last drop of your take-home pay, but it makes you happy to provide a nice place for the family.  This is one form of the Life Sucks Budget since you put yourself first and prioritize your current happiness.  And, it is also a sign of defeat since, like Thelma & Louise, you are headed over a cliff but you can’t bring yourself to be honest about it.
But something interesting happens when you ask a 25-year-old if they know how much they must save every week over 40 years to become a millionaire.
Do you want to become a millionaire? Yes? Well, do you know how much you have to save every week to get there? No. Guess how much? Think about it.  One million dollars. 40 years. 52 weeks a year. Why, that’s 2,080 weeks over 40 years.  How much do you have to save each week?  $500 per week?
And then you just wait. You listen for their answer. “Want to be a millionaire?” They smile and chuckle.  “Sure!” they reply.  “Well, how much do you have to save a week? What’s your guess?”  And they say things like $1,000 per week.
And when you tell them the answer could be as little as $50 per week depending on how the stock market fairs over the next 40 years and whether they have a 401(k) plan at work that matches their contribution, their eyes open wide.  “REALLY?  Only $50 per week?”
That can be a life-changing moment. When you realize that you can retire a millionaire by just saving $50 a week, even the person working as a Walmart greeter can become a millionaire if they just save every week. That knowledge changes you. You don’t have to lose. Even if everything in your life goes bad, even if you have a crappy job, even if you get divorced or change jobs or raise stupid kids.  You can still win financially if you tap into real financial knowledge and apply a proven system of building wealth. Like getting a 50 meter head start on Usain Bolt, you start to feel you could win. And, you start training with vigor. Because now you believe.
Whether your savings turn into a million dollars or just a lousy $300,000, haven’t you won either way? It’s going to be a lot of money if you apply the system.
The truth is you can retire a millionaire even if you have to file bankruptcy at some point in your life, as long as you keep your fingers off the retirement account when life sucks. You can pay off your home mortgage in 15 years instead of 30 if you don’t buy too much of a home and pay an extra $100 per month. You can have $10,000 in an emergency cash fund if you pay yourself first and make that a priority. But that’ never going to happen if you walk around with an unspoken belief that you are a loser and that the system is rigged against people like you.
This is probably why I think Dave Ramsey, despite all his craziness and oily sales pitches, is about the best money adviser out there. He reprograms your your mind and spirit to understand that you can win financially if you start acting and thinking like a winner.
So instead of acting as if life sucks and engaging in a spending pattern where you maximize today’s wants with a new car or a fancy home and the 500-channel cable expense while barrelling down the highway at maximum speed in Thelma & Louise fashion, stop and think for a moment. Why are you spending money in this fashion? Because you secretly believe that ultimately you will lose in life so you should maximize today’s enjoyment?
If you are going to apply a Life Sucks Budget because you acknowledge that income is limited and that problems just never fully go away, then why not apply an intentional budget that pays off the mortgage, provides for regular family vacations, creates college savings accounts, and leaves a plentiful retirement fund? Life does frequently suck and we are not fully in control of what happens, but we can achieve our financial goals if we make the decision now to pay ourselves first and give what is left over to those never-ending obligations of life.
Photo courtesy of Flickr and Ken Lund.

Rule #1 of credit counseling is when you are trying to get out of debt you must forgo some expenses while paying off debt. The advice is universal. Decrease expenses. Increase income with a part-time job. Sell some stuff to raise cash. Get the debt snowball rolling. Suck it up and double down on the smallest debt and then the next smallest until all the debt is gone. Live like a crazy person until you can scream out loud I’M DEBT FREE!
And if your debt problem is that you spend money like a moron and you just need to grow up and cut expenses and work a pizza delivery job at night until you pay off the debt, that may be good advice. Dave Ramsey has built a 55 million dollar financial empire by giving out such advice.
But what if you already work as much as you can and your budget is already frugal? What if you have kids at home and you cannot afford to pay a babysitter so you can go out and deliver pizza at night? And what if you are physically and emotionally drained at the end of the day and the thought of working a second job is likely to push you over a cliff?
And what about all that time lost during a debt repayment plan? How long will it take to repay all the debt? And what about all the new debt incurred while you live through a get-out-of-debt program? Time to start a new repayment plan? Amend the plan to add the new debts?
The message of the get-out-of-debt group is that life will begin to be wonderful again once all the debt is repaid. When the debt is paid, THEN you can begin to really save money and establish retirement and college savings plans. AFTER their debt is repaid you can start to achieve YOUR financial goals.
But what if time and time again new problems pop up that prevent the debt repayment plans from completing? You know, like when you get sick and the insurance company says the claim was filed too late even though the doctor’s office said they would file a claim, or when the car gets hit by an uninsured driver, or when your employer says that your job has been outsourced to China. And so you start over and scrounge for a new job and cancel the debt program until you can find a new car but now you have a car loan and the debt payment plan must be changed, again. It just keeps happening, over and over again. For years. For decades.  Meanwhile, your financial goals are not being accomplished because you never got to that magical point of being debt free so you could START on achieving your goals. Sound familiar?
What if you could start focusing on your financial goals today, even though you are still in debt? What if you put your long-term financial goals first, and the demand of the bill collectors second? If you sense that the tail is waging the dog in your life and that you can never get ahead because just one damn thing after another keeps blowing up, maybe it is time to confess that life sucks but your finances don’t have to suck as well. Welcome to the Life Sucks Budget.
Under traditional get-out-of-debt budgeting we put creditors payments first since we view financial problems as being a short-term problem, but under the Life Sucks Budget we put your needs first because we view such problems as a never ending, long-term reality.
Under the Life Sucks Budget we surrender to the reality that debts will never go away, and that’s okay. We no longer worry about being perfect and becoming debt free. Rather, we focus on survival and quality of life. We realize that the system was not built for us and that big banks and insurance companies and big employers will keep finding ways to pull the carpet from under us. The Life Sucks Budget is a confession that the American Dream has gone wrong and that we will no longer be suckered into believing that tomorrow will be a better day. We no longer play the game. We accept that we can longer serve two masters, and so we make the decision to fund our long-term needs first and the demands of creditors second.
Pay yourself first. That is the guiding principal of the Life Sucks Budget. So with that in mind, those who adopt the Life Sucks Budget will take the following actions.

• Emergency Savings Account. Every financial adviser worth their salt will advise that clients save 3 to 6 months of their monthly expenses in cash. That’s good advice. Life sucks and so it is necessary to be prepared for periods of unemployment due to frequent job changes and layoffs. So, the first dollars you earn should be tucked away into a separate bank account, preferably at a bank you don’t presently use and ideally at a bank located in a different state. Why a bank located outside of Nebraska? Because creditor judgments may only be levied on bank accounts located in Nebraska. To garnish an account located outside Nebraska the creditor must register their judgment in the foreign state. So, a wise person sets up their emergency savings account in a far away bank. With the ability to open accounts online these days, this is really easy to do. Heck, if you can get an account in Canada that is easy to access, go for it.
• Pay Nondischargeable Debts Before Other Debts.  The Life Sucks Budget anticipates that filing bankruptcy from time to time is probably necessary.  But not all debts can be discharged in bankruptcy, such as student loans, child support, alimony and recent income tax debts. So, when deciding what debts to pay, it is smarter to pay debts that bankruptcy cannot discharge before paying other debts, like credit cards and medical bills, that can be discharged.
• Tax Debts & Bankruptcy.  Generally speaking, most income tax debts can be discharged in bankruptcy IF the tax return was filed and IF three years have gone by since the return was filed.  (This is a simplified version of the general rule and there are many additional rules that apply.) The take away here is that if you owe a lot of income tax debt, make sure your returns are filed and perhaps you should not pay any of the debt voluntarily and just wait until the debt becomes dischargeable in bankruptcy. Conversely, if you do not owe a lot of tax debt then you should pay off that debt before paying credit cards or medical debts since the tax debt cannot be discharged.
• Contribute to Retirement Accounts.  The great majority of retirement accounts, including 401(k) plans and tax qualified retirement pensions, are protected in bankruptcy. So, if life sucks and you view filing bankruptcy as something that is inevitable, then maximize your contributions to your retirement accounts and NEVER withdraw funds from your retirement to pay off debts that could be discharged in bankruptcy.
• Pay Extra on the Mortgage.  Nebraska law protects up to $60,000 of equity in your home, even if you file bankruptcy. Paying a lousy $100 extra on the mortgage can be the difference between paying off a mortgage in 15 years instead of 30 years, so if you have less than $60,000 of equity in the home you should consider paying extra on the loan every month.
• College Savings Plans. Contributions to a 529 College Savings Plan made more than one year prior to bankruptcy are exempt and protected. If you have minor children that plan on attending college one day, contributions made to 529 savings plans more than one year ago are protected even if you are forced to file bankruptcy.
• Pay off Car Loans.  Nebraska law protects up to $10,000 of equity in a vehicle, so it makes sense to pay off car loans ahead of other debts so you reach a point of economic freedom from the threat of repossession.

Of course, by paying yourself first you will be short on money to maintain minimum payments on all your debts. And that’s okay, because we acknowledge that life sucks and we deal with that problem later by filing bankruptcy or by debt settlement or by letting the debt expire over time. We pay creditors what we can, but we don’t worry if the account goes into default because what is more important is that we fund our long-term needs first so that we don’t wind up old and poor.
The Life Sucks Budget is not a call to financial irresponsibility. Rather, it is a call to wake up and to smell the coffee of today’s economic system where lower wage Americans never seem to improve their condition because they pay creditors first. The Life Sucks Budget is actually a call to work hard so that your financial needs are met and it is a reminder that, even with low income, you can achieve financial success if you put your family’s legitimate needs first and force creditors to accept what is left over.
Image courtesy of Flickr and NOAA Photo Library.