1. COLLECTION AND BANKRUPTCY LAWS December 3, 2010 Idaho Healthcare Financial Management Association PRESENTED BY: MIKE CHAPMAN Chapman Law Office, PLLC 2100 Northwest Blvd, Suite 230 P.O. Box 1600 Coeur d’Alene, ID 83816 mchapman@chapmanfs.com

2. This information is not intended as legal advice and may not be used as legal advice. It should not be used to replace the advice of your own legal counsel.

3. TOPICS COLLECTION LAWSUITS BANKRUPTCY

4. COLLECTION LAWSUITS STATEMENTS AND ASSIGNMENTS –HIPAA STATUTE OF LIMITATIONS COMPLAINT/SERVICE DEBTOR’S RESPONSE GARNISHMENT/DEBTOR’S EXAMS

5. ITEMIZED STATEMENTS –DATE(S) OF SERVICE & AMOUNT(S) OWED –IF POSSIBLE, DEBTOR’S SIGNATURE ACCEPTING FINANCIAL RESPONSIBILITY.

6. ASSIGNMENTS AGREEMENT THAT TRANSFERS INTANGIBLES (I.E. ACCOUNT RECEIVABLES) TO ANOTHER PARTY FOR PURPOSES OF COLLECTION. LEGAL RIGHT TO COLLECT A DEBT. SUIT ON HOLD UNTIL RECEIVED FROM CLIENT

7. STATUTE OF LIMITATIONS MAXIMUM TIME LIMIT TO FILE A LAWSUIT IDAHO-Oral Contract=4 Years -Written Contract=5 Years -Partial Payment Restarts the Statute --Credit Reports- 7 years

8. COMPLAINT/SERVICE GENERALLY, MULTIPLE CREDITORS AND MULTIPLE ACCOUNTS FILED IN COUNTY WHERE DEBTOR RESIDES PERSONAL OR SUBSTITUTE SERVICE ON DEBTOR WITHIN SIX MONTHS

9. DEBTOR’S RESPONSE DO NOTHING/DEFAULT JUDGMENT CALL AND PIF OR ACCEPTABLE PAYMENT ARRANGEMENTS FILE ANSWER ADMITTING/DENYING CLAIMS—(INSURANCE/MEDICAID/ MEDICARE) BANKRUPTCY

10. JUDGMENT COLLECTIONS *A JUDGMENT IS JUST A PIECE OF PAPER THAT SAYS YOU ARE ENTITLED TO MONEY FROM THE DEFENDANT. *IN MOST CASES, THE DIFFICULT PART IS COLLECTING ON THE JUDGMENT BECAUSE PAYMENT IS NOT VOLUNTARY.

11. EXECUTIONS/ATTACHMENTS * All personal property, real property and money is subject to execution/attachment unless exempt by law. 1.Continuing Writ of Garnishment-Wages 2.Writ of Attachment-Bank Account 3.Judgment Lien on Real Property

12. Exemptions Don’t want Defendant living off public funds Certain property exempt: Up to $5,000.00 for household furnishings, appliances, apparel, animals, books, musical instruments, jewelry, guns (under $500) * Motor Vehicle--$3,000.00

13. WAGES Continuing Garnishment until Paid in Full Idaho provides that a Judgment Creditor can garnish either a) 25% of net income or b) any amount over 30 times the federal minimum wage, whichever is greater.

14. DEBTOR EXAMS ADDRESS PHONE NUMBER MARITAL STATUS CHILDREN CHILD SUPPORT EMPLOYMENT INCOME MONTHLY EXPENSES BANK ACCOUNTS TAX RETURNS STUDENT LOANS RENT/CAR PAYMENTS

15. COMMON SCENARIOS Divorce –Community Property –Necessaries for Kids –Divorce Decree Deceased Debtors Minors- Power to disaffirm contracts, however can’t disaffirm contracts for necessaries if not living at home.

16. COMMON SCENARIOS Tribal Court Checks Marked Paid In Full Accepting Regular Small Payments

17. BANKRUPTCY FEDERAL STATUTES THAT RELEASE OR “DISCHARGE”A PERSON OR BUSINESS FROM ALL OR MOST OF THEIR DEBTS.

18. PURPOSE GIVE THE DEBTORS A FRESH START. EQUAL TREATMENT OF LIKE- SITUATED CREDITORS.

19. TYPES OF BANKRUPTCY 1)CHAPTER 7-LIQUIDATION The debtor turns over all assets owned at the time of bankruptcy to a trustee for liquidation. However, the debtor is entitled to retain certain exempt assets.

20. TYPES OF BANKRUPTCY 2)CHAPTER 11-REORGANIZATION Most often used by corporations & partnerships. 3)CHAPTER 12-REORGANIZATION Agricultural businesses.

21. TYPES OF BANKRUPTCY 4)CHAPTER 13-REORGANIZATION Debtor is permitted to reorganize their personal finances by paying accumulated debt out of their current income over a 3-5 year period.

22. AUTOMATIC STAY When any type of bankruptcy is filed, an automatic stay (injunction) is immediately imposed upon all creditors. This stay precludes the commencement or continuation of any action against the debtor or their property and prohibits any action to try and collect a pre-petition debt or to enforce a judgment lien.

23. NOTICE OF AUTOMATIC STAY Any action taken without court approval after the bankruptcy is filed is a violation of the automatic stay, whether or not the creditor knew of the bankruptcy filing. Moreover, any action taken in violation of the stay is subject to contempt proceedings before the bankruptcy court and the imposition of fines, including attorney fees.

24. 2005 BANKRUPTCY REFORM ACT Most substantial revision to the bankruptcy laws in almost 30 years. Effective date October 17, 2005

25. HIGHLIGHTS NONPROFIT CONSUMER CREDIT COUNSELING-MANDATORY MEANS TEST CHANGES TO AUTOMATIC STAY RULES NOTICES REQUIRED TO BE GIVEN TO CREDITORS MORE DOCUMENTATION REQUIRED

26. HIGHLIGHTS LONGER PERIODS BETWEEN DISCHARGE CH 7 TO CH 7 = 8 YEARS (WAS 6 YRS) CH 13 TO CH 7 = 6 YEARS CH 7 TO CH 13 = 4 YEARS CH 13 TO CH 13 = 2 YEARS

27. COMMON SCENARIOS Preferences – Why is the Trustee asking me to give money back? Reaffirmation Agreements My Account Is Not Listed—Blanket Discharge Voluntary Payments—After Bankruptcy