I have a list of Do’s and Don’ts that I give clients at the conclusion of our initial consultation. Got more evidence this week that they don’t read it and, even if they read, they don’t think or extrapolate from that list.
So, despite Einstein’s definition of insanity, I added to that list the “gotcha ” that bit me this week.
In two different cases, we sat down to review and sign the petition and schedules and found, serendipitously, that the client had paid off a debt on which we were relying for means test purposes.
In one case, the client bought a new case, as we had suggested, but traded in the car with existing debt. In the other, the client’s father paid off the priority tax claim.
Neither of these actions were obviously “wrong” in the client’s eyes; there was nothing that in the ordinary course, should have set off bells and whistles in their minds. But in the course of not spending so much time explaining the means test (as though one could explain it to a layman), I had left the client was clueless that altering the secured debt or priority debt mix stood to mess up the DMI.
Wish I had some nugget to impart that would prevent this from happening to you. What I propose to do, besides adding to my list of “don’ts”, is to add a line to my initial consult patter about the role of secured and tax debts in the means test, and to make sure that at the signing, I ask whether anything has changed since they gave us their information for filing.
After all, we should appreciate that the only constant is change.
Image courtesy of Watchsmart