INTRODUCTION:

(1) Same Relief As Chapter 7: I understand that the DEBT-Buster Plan is a special type of bankruptcy case, one that has been made available as a result of the recent changes to the Federal Bankruptcy Law. Basically, it is "hybrid" version of a Chapter 13 bankruptcy case. "Hybrid" means that it is a Chapter 13 case crafted and modified to get me the same debt relief and protections that I would get if I filed a Chapter 7 bankruptcy case.

(2) Less Money Needed Up-Front To Get Started: The real benefit of the DEBT-Buster Plan is that I can get started and protection from my creditors by paying less money up-front than would be necessary if I filed a standard Chapter 7 bankruptcy case.

(3) Additional DEBT-Buster Plan Benefits:

• Can Get Done Earlier: If I choose to, I can pay more and get done with my DEBT-Buster Plan sooner.
• "Bust Free" From Under Certain Debts To My Ex-Spouse: I can get out from under obligations to my ex-spouse, other than alimony or child support, contained in marital Separation Agreements and/or Court Orders (other than Orders for contempt of court.)
• "Bust Free" From Debts Incurred To Pay Taxes: I can also get out from under loans I obtained to pay taxes I owed.
• No Reaffirmation Hassle, Risk, Or Cost: Unlike Chapter 7, I will not have to "reaffirm" my vehicle loans. "Reaffirm" means that I sign back on vehicle loans "personally". Not having to do so saves me the hassle, the risk of personal liability, and $125 per vehicle in attorney fees.

QUALIFICATIONS:

In order to qualify for the DEBT-Buster Plan, all of the following must be true, as of the date my DEBT-Buster Plan is to be filed with the Bankruptcy Court:

(1) Chapter 7 Candidate: I must qualify in every respect as a candidate for filing bankruptcy under Chapter 7. Among other things, this includes the following:

1) Exemptions: I must have available to me "exemptions" sufficient to protect all of the property and other possessions that I own and want to keep. "Exemptions" are laws which define how much and what kind of property I can keep and protect, even if I file bankruptcy.

2) No Secured Debts In Plan: I must agree that all of my secured debts will be paid "outside" my DEBT-Buster Plan, except where I agree to surrender to the creditor the collateral securing the debt (or where, in the case of a judgment lien, I agree to pay the cost of avoiding the lien). This means that none of these debts will be included in or paid through my DEBT-Buster Plan.

"Secured" debts are debts where my creditors holds, as collateral, a lien against something I own, and includes obligations such as car loans, home loans, real estate taxes, judgment liens, homeowner association dues, and income, sales and withholding tax liens.

3) Must Keep These Secured Debts Up-To-Date: I must continue to pay and keep up–to-date on all of the following secured debts:________________________________________________________

4) No Leases Or Executory Contracts In Plan: I must agree that all leases and other executory contracts will be "assumed" and will also be paid "outside" my DEBT-Buster Plan, except where I agree to surrender to the creditor the collateral securing the debt. "Leases and executory contracts" include obligations such as the lease of a car, an apartment or a commercial building.

5) Must Keep These Leases And Executory Contracts Up-To-Date: I must continue to pay and keep up-to-date on all of the following leases and executory contracts: ____________________________

6) Must Pass Means Test: I must pass what is known as the "Means Test". The Means Test is a new test under the law that I must pass in order to qualify as a candidate for Chapter 7.

(2) Can Afford It: I must show that I can afford to pay all of my normal monthly living expenses (including the secured debts mentioned above), plus my DEBT-Buster Plan payment. To make these expenses more affordable, I have agreed to surrender the following property to my creditors: ________________________________________________________

(3) No Priority Debts: For the ^$99/mo plan, I must have less than $1,300 in "priority" debt, and for the ^$199/mo plan, I must have less than $6,300 of "priority" debt. "Priority" debts are special debts that must be paid in full in a Chapter 13 case, such as past-due child support or alimony, personal property taxes due for the last 2 years, income taxes due for the last 4 years, or sales or employee withholding taxes due for any year.

(4) No Pending Criminal Proceedings: I must not be involved in any pending criminal proceedings.

UNDERSTANDINGS:

I understand and acknowledge the following:

(1) My case will not be filed until I have both paid to your law firm $_______________ and signed all the final paperwork necessary to file my case.

(2) My first DEBT-Buster Plan Payment will be due the 1^st of the month after my bankruptcy case is filed.

(3) My DEBT-Buster Plan will only get rid of my "dischargeable" unsecured debts such as credit cards, medical bills, loans, and obligations left over after repossession or foreclosure.

(4) My DEBT-Buster Plan will not get rid of any "non-dischargeable" debts, such as child support, alimony, student loans, or debts owed by me as a result of fraud or embezzlement or intentional misconduct.

(5) My DEBT-Buster Plan will however stop 'collection' upon these student loans and educational benefits while I am in my plan. Even so, interest on student loans and educational benefits will continue to accrue.

(6) My DEBT-Buster Plan will not get rid of any "secured" debts, except where I have agreed to "surrender" to the creditor the collateral on which the creditor holds a lien.

(7) My DEBT-Buster Plan will only get rid of my obligation to pay certain debts. It will not get rid of somebody else's obligation, as for instance the obligation of someone who co-signed or guaranteed a debt for me. For example, my DEBT-Buster Plan will not get rid of my spouse's obligation on a debt, unless my spouse files bankruptcy with me.

(8) My DEBT-Buster Plan will not stop any pending criminal proceedings.

(9) If I owe any alimony or child support payments, I must pay and keep up-to-date all such payments that come due after my DEBT-Buster Plan is filed. Otherwise, I will not have the right to obtain a 'discharge' when my DEBT-Buster Plan is complete.

REPRESENTATIONS:

I represent the following to be true:

(1) No other secured debts, executory contracts or leases: I do not have any secured debts, leases or executory contracts, other than those specifically referred to above

(2) All Income Tax Returns Filed: All of my Federal and State income tax returns for the last 4 years have been completed and filed, or will have been completed and filed, before my bankruptcy case is filed.

(3) All Sales And Withholding Tax Returns Filed: If I am or was in business, all of my Federal and State sales tax and employee withholding tax returns have been completed and filed, or will be completed and filed, before my bankruptcy case is filed.

(4) No "Priority" Debts Owed: I do not owe any "priority" debts above the limits set forth above in paragraph "(3)" of the Qualifications section, such as past-due child support or alimony, personal property taxes due for the last 2 years, income taxes due for the last 4 years, or sales or employee withholding taxes due for any year. In addition, I will not owe any "priority" debts on the date that my bankruptcy case will be filed.

EXTRA REQUIREMENTS TO QUALIFY FOR ^$99 PER MONTH PLAN:

(1) Steady, Dependable Income: I have, and will have as of the date my case is to be filed, enough steady, dependable income to pay both: (1) My $99 per month DEBT-Buster plan payment and (2) The cost of all my normal monthly living expenses (including debts secured by vehicle(s) and home.

Note: For the purpose of qualifying for the special "$99 per month" plan, "steady, dependable income" includes only steady, dependable income I receive: (1) From permanent employment working for someone else (where I am paid either on a salary basis or based upon a hourly basis for a steady number of hours), and/or (2) From retirement plans and social security. It does NOT include income I earn or receive from self-employment, employment based upon production goals or commissions, unemployment, Worker's Compensation, overtime work, bonuses, rental income, short-term disability, or gifts from family or friends.

(2) Payroll Deduction Necessary: I agree to submit to payroll deduction for the purpose of making my DEBT-Buster plan payments.

Note: This will be required only when it is possible to set up payroll deduction. For example, it will not be required if my only income is from retirement or social security.

FAILURE TO QUALIFY FOR DEBT-Buster PLAN: (Please have clients initial each of the following.)

[         ] Before Bankruptcy Case Filed: I understand and agree that if I fail to meet any of the terms or conditions necessary to qualify, as of the date my bankruptcy case is to be filed, for participation in a DEBT-Buster Plan, your office will have no obligation to proceed with filing of the DEBT-Buster Plan version of bankruptcy on my behalf.

[         ] After Bankruptcy Case Filed: I understand and agree that if, in hindsight, I failed to meet any of the terms or conditions necessary to qualify for participation in a DEBT-Buster Plan or if I become more than 30 days late my DEBT-Buster plan payments, I agree that my bankruptcy case will thereafter be treated as if it is and always was a standard Chapter 13 case, in which event the attorney fees will be increased up to the maximum amount allowed by law (which is $3,000 in the Eastern District of N.C. and $2,500 in the Middle District of N.C.)

DISCLAIMER: Results set forth on the "Debt Options & Results" sheet are an estimate based upon the information provided by me on the date that sheet was filled out, and those results assume that there will be no significant changes in the nature or extent of my assets, debts, income and expenses as of the date that my bankruptcy case will be filed.

ACKNOWLEDGMENT: I have read and understand all the terms and conditions set forth in this understanding. I have also received a full copy of this document.

SIGN UP & AGREEMENT: I hereby sign up for the following DEBT-Buster Plan and agree to all the terms and conditions set forth in this understanding.

PLAN SIGNED UP FOR:

[     ] ^$199 per month plan         [     ] ^$99 per month plan

Dated: _______/________/__________