Near Sighted Leading the Blind

When a trainer of bankruptcy paralegals writes about clients failing the Chapter 13 means test,  I blanch, or worse.

We had a couple who originally wanted to file a Chapter 13 so they could keep their home. However, they were unable to pass the Means Test.

The calculation of the debtor’s monthly disposable income on the B-22C form is a necessity.  It is supposed to measure the debtor’s obligation under a Chapter 13 plan to the unsecured creditors.  There simply is no pass or fail, here.  There is only a target number created from Congress’s belief that there is an objective measure of what a debtor “should” pay in 13.

You might encounter a barrier to 13 if the debtor’s actual income going forward  or expenses not deductible on B-22C produced insufficient income to make the payment they “should”, but that is entirely different than  not “passing the Means Test.”

Ms. Ring, the paralegal, went on:

The Means Test was developed to provide a way for the legal system to determine if a client is eligible to file a Chapter 7 or 13.

The means test in Chapter 7 exists to trigger a presumption of abuse of bankruptcy.  Not so in Chapter 13. Eligibility for Chapter 13 is determined by a number of things, but the means test isn’t one of them.  Debt limits  and regular income in excess of current living expenses are eligibility factors.  Sufficiency of disposable income might impact feasibility, but not eligibility.

Careful use of words is important in law, and, particularly if one holds oneself out as teacher in the field, it is incumbent on the author  to write with care, not just for dramatic impact.  The distinction between eligibility and feasibility is important and should not be conflated.

The piece goes on:

when the debtors qualify for a Chapter 7 on the Means Test but want to keep their home, attorneys will do a wide variety of manipulation to either lower expenses or raise the income, just to satisfy the debtor. This  is FRAUD and the attorney and possible the virtual bankruptcy assistant can get in a lot of trouble. Here are some things that could happen if the debtors qualify for a Chapter 7 and the attorney places them in a Chapter 13 just to save their home:

I’m sorry, but there is nothing WRONG with filing a Chapter 13 when you qualify for Chapter 7.  This is a choice allowed to a debtor.  The choice may be foolish or overly optimistic, but it is not wrong, and there is nothing wrong with an attorney filing a 13 for a debtor who could elect 7, so long as the schedules are truthful.  There is something pretty pretentious about the phrase “just to save their home”.

I’m sure I’ll have more to say another day about the statements in this post, but it is chilling to have a paralegal announce that she was hired by an attorney to talk the client out of their choice of relief.  I cannot imagine how a paralegal could do that without giving legal advice.

One thing Ms. Ring got right:

Many attorneys who are practicing consumer bankruptcy today did not obtain proper training before starting their practice. Many of them opened up a Chapter 7 and 13 practice because they wanted to make extra money without realizing the consequences of that decision. Besides, the majority of attorneys believed that preparing the bankruptcy petition was nothing more than filling out a set of forms.

My two cents is that you need to pick the source of your education carefully.  Just because you read it on the internet doesn’t make it so.

Image courtesy of Lee Mclaughlin


  1. Maureen O'Malley says

    This is unbelievable! I’ve heard clients telling me a lot of nonsense they’ve heard but this beats ’em all. I hope those who read that will find your comments, as well!

    • I’ll cut clients some slack when they try to research bankruptcy on line and come to the wrong conclusions. But I have no tolerance for someone who holds themselves out as skilled in an area of law and then delivers so much misinformation. It’s particularly dangerous when this misinformation is promulgated as gospel.

  2. I’m on her mailing list and find about one third of her material either plain wrong or even more dangerous than that. She seems to like to to encourage her students (she runs a training for virtual bankruptcy assistants) to give legal advice (my words, not hers) to attorneys and their clients and in general to butt into areas that should be left to attorneys or at least under the direction of attorneys. I remember one email of hers that glowingly recounted a scenario in which a VBA, on his/her own volition, did a google search on an attorney’s bankruptcy client to look for assets.

    • Cathy Moran, Esq. says

      I don’t have trouble with a paraprofessional checking public records for assets. In fact, there was lots of discussion when BAPCPA was enacted about how much, if any, independent research a lawyer had to do to verify the client’s information. I’m offended by the idea that filing a 13 when one qualifies for 7 is wrong. I’m also troubled by the unstated proposition that an inexperienced attorney can practice in this field with the “right” virtual assistant.

  3. Andy Grossman says

    One of the tragedies of the 2005 BAPCPA amendments is that it flies in the face of the trend elsewhere in the world to make consumer bankruptcy’s “fresh start” more, not less, available to those affected by tragedy and economic bad luck. The complexity and the eligibility and feasibility benchmarks, and the risk of (retrospectively) erroneous professional judgment, increase the cost and limit the number of professionals. It’s as if the law was written with a view to fueling malpractice. For generalists and paralegals who can’t afford anything more expensive, their conscience if not their professional integrity should guide them to reading the National Consumer Law Center’s $190 “Consumer Bankruptcy Law & Practice”.

    • It’s not called the Bankruptcy Bible for nothing.

      Those without a background in this area who expect to practice bankruptcy law should join NACBA, attend its events, and of course, keep reading here.


  4. Rozalyn Landisburg says

    I appreciate your clarity and exposure of the misinformation provided by Ms Ring.
    I was frantly shocked that she accuses attorneys of fraud whken they find a legal way for the
    clients to save their homes in chapter 13.

    Legal advice from a paralegal is prhibited in Flaorid and Pennsylvania. It is considered pracdticing law without a license.

    There are several ethicval violations in this artivcle. For teacher of paralegals to mistate the law and
    advise paralegals to give legal advice is abhorent.

    Thank you for your expose.

    • Cathy Moran, Esq. says

      There is certainly an important role for paralegals in this practice, but that role isn’t to advise clients.

  5. Ms. Ring has continued, over a several year period, to send me unsolicited junk faxes. I have advised her of my intent to litigate over this affront, to no apparent avail. There is no question that she is a huge net negative to the consumer bankruptcy community.

  6. Very interesting blog posting. I’ m unfamiliar with Ms. Ring, but there are plenty of Ms. Rings’ out there, usually taking the form of prior pro se filers with a whole bunch of advice to give their friends. The problem is that what happened in their case may not happen in the next.

    • I think there is a significatnt difference between someone who says “I filed bankruptcy and this is how it played out” and someone who says “I’m an expert and if you’re a new professional, I can teach you”.

  7. Larence Smith says

    Ms. Ring states in her book, that she was a bankruptcy forms processor for the public, until taken to court and accused of UPL.
    I spent almost two thousand dollars on the courses and training material from Victoria Ring. It did not take long to notice these same types of issues that Kathy pointed out. I did purchase the Consumer Bankruptcy Law and Practice books, the Practical Bankruptcy Law for Paralegals, and have taken Kathy Moran’s Mastering the Means Test course. I learned a lot more for a lot less.
    I believe that a lot of her training material, was taken from the Consumer Bankruptcy Law and Practice books, and then rewritten in her own words along with how to use the bankruptcy petition software. I felt that if I was to go straight out of the training program and start working with attorneys. I would soon be looking for a new line of work!
    The sad part of this is the fact that there are new students spending a lot of money to complete her training program, then leaving and thinking they have everything needed to setup business as a virtual bankruptcy assistant.
    You would probably also like to know, there was two or three attorneys in my-class.

    • Thanks for the kind words about the means test class. The Fundamentals of Bankruptcy series deals with putting a simple petition together and the statutory basis for the decisions the forms call for.

      There is no doubt this is a complex line of work and 30 years into the practice, I keep learning new things and seeing new facets of the Code, not to mention the chaos created by BAPCPA.

  8. Roz Landisburg, Esq. says

    It disturbed me that Miss Ring stated it was fraud to place a debtor in a chapter 13 just to save
    their home when they qualify for a chapter 7. This is good bankruptcy practice because it
    allows the debtor to save their home. One of the biggest emotional factors affecting people today is the possible loss of their family home. Creative practice of law allows ( within legal bounds)a good outcome for the client and is evidence of an effective practitioner.

    The budget of a family can be increased or decreased as their income is changed. Obviously
    when the breadwinner who is making $200,000 a year starts only making 25,000 a year or
    less, the family will have to adjust their expenses. Vacations, food, clothing and the entire budget will necessarily have be adjusted so that the family survives. This is not manipulation but truthful allocation of income.

    I’m sure Miss Ring has experience and knowledge about filling out bankruptcy forms; however,
    she should not be giving legal advice because obviously some of her information is dead wrong
    and she is not a licensed attorney. There seems to be something imroper for her to be teaching
    incorrect information at a school where paralegals are being trained and will carry the misinformation and disseminate it to others.


  9. Sonya Banks says

    Posted on Bankruptcy Lawyers LinkedIn Group in response to this blog:

    Jay Fleishman –

    I sincerely apologize for this problem and I am sorry that some of the members of your group hate me and want to degrade my knowledge. I have worked in this field, fighting hard for the debtor for over 30 years. I have set up more than 75 new law firms and worked hand in hand to help attorneys nationwide make thousands of dollars and grow their practices.

    Every article I publish is edited by at least 1 or more attorneys, so I know the article information is not wrong or the attorneys would catch it. Besides, my intention was never to take the place of an attorney. Instead, my focus has always been to be an asset and help attorneys grow their law firms. I provide many references on my website that people can directly contact and find out more about my background.

    Finally, I have traveled across the United States, speaking at paralegal events as well as conducting Chapter 13 training classes for nearly 15 years. It has been attorneys who sought me out and demanded training. I never dreamed I would ever train attorneys; which is why I focused on the paralegal world. But if attorneys seek me out and ask me to train them, I must not be as evil as some of the attorneys in your group think that I am; and my seminars fill up quickly.

    In closing I would like to state that I still stand firm in the truth of my articles. I was personally involved in these cases and I know what happened. I report the case reviews from truth I experienced and I will not apologize to anyone for that.

    I wish you and your group a Merry Christmas and hope they rethink they attitude of hate so they can find peace in their souls.

    Victoria Ring
    Colorado Bankruptcy Training

  10. Forgive me for the cliche, but we are all human, and nobody, lawyer, paralegal or otherwise, is beyond making mistakes. My problem with Ms. Ring stems from her unwillingness to acknowledge that certain “information” she previously posted is simply inconsistent with the law and good bankruptcy practice. She cannot reasonably stand by her statement that filing a Debtor under Chapter 13 when they qualify for Chapter 7 just to save their home is fraud. Quite to the contrary, as RL and others have touched on, it is often good bankruptcy practice. Her statements have been criticized by many bankruptcy lawyers, and for good reason. However, in the face of criticism, instead of addressing the veracity of her statements or offering some sort of clarification, Ms. Ring creates a fiction that anyone who questions her statements is motivated by hate. If Ms. Ring is going to continue to advise people in a fiduciary capacity and hold herself out as a professional in the field (for better or worse), she needs to be able to swallow her pride and admit when she is wrong for the sake of those individuals who might rely on the misinformation to their detriment.


    • Cathy Moran says

      You’ve hit a number of nails on the head.

      It is difficult to write for an inexperienced audience about a complex subject like consumer bankruptcy. It’s always a fine line between simplifying enough for clarity and obscuring important variants.

      If you are teaching in this field, it is doubly important to acknowledge the multitude of ways client lives interact with the law. It is a disservice to suggest that dealing with that complexity can be quickly learned or handed off to a paralegal with less professional training than a lawyer brings to the table.

      It is my awareness of how superficial the knowledge of new bankruptcy lawyers can be that drives the entire Bankruptcy Mastery project. As I saw the newbies appear in court with their mistakes on display, I told my partner that we either needed to teach new bankruptcy lawyers the field, or drive them out of the practice, since, as they were, they were a menace to the public.

      It will be interesting to see if Ms. Ring corrects any of the material she wrote.

  11. man, I stumbled across the Victoria Ring HATERS CLUB!! Wow!!!


  1. Dr Patel says:

    Dr Patel

    Near Sighted Leading the Blind