tag:blogger.com,1999:blog-561587390532333692024-02-08T07:51:59.040-08:00Bankruptcy by the Bay BlogA blog for consumers and small business facing bankruptcy and other debt issues written by the bankruptcy attorneys of Evans Law Offices.Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.comBlogger21125tag:blogger.com,1999:blog-56158739053233369.post-12151815191326868222014-03-31T13:10:00.001-07:002014-03-31T13:10:18.033-07:00BE WARY – FILING BANKRUPTCY WITHOUT AN ATTORNEY: The Liquidation Nightmare
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<span style="font-size: large;">Filing bankruptcy without an attorney for people who own
their own home is a big misstep.<span style="mso-spacerun: yes;"> </span>There
are many reasons why you would want an experienced bankruptcy attorney to
assist and guide you through your case whether you are a homeowner or not, but
homeowners should be especially wary as they have a lot to lose.</span></div>
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<span style="font-size: large;"> </span></div>
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<span style="font-size: large;">A <a href="http://www.evanslawonline.com/Bankruptcy/Low-Cost-Chapter-7-Liquidation.shtml" target="_blank">Chapter 7</a> case is often referred to as a liquidation case,
and that is because the Chapter 7 Trustee has the power to sell real property,
and personal property.<span style="mso-spacerun: yes;"> </span>The Chapter 7
Trustee can hire a broker to sell your real property, market it, and sign the
sale documents.<span style="mso-spacerun: yes;"> </span>Also, a Chapter 7 case
once filed cannot be voluntarily dismissed.<span style="mso-spacerun: yes;">
</span>This can be a lethal combination – if you find yourself in an improperly
filed Chapter 7 you may not be able to stop the train once the Trustee moves to
sell your property.</span></div>
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<span style="font-size: large;"> </span></div>
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<span style="font-size: large;">To add to the pain of the improperly filed Chapter 7 is that
you (the debtor) are required to pay for the Chapter 7 Trustee’s time, their
attorney’s time, and any other people they hire, such as a broker or real
estate agent.<span style="mso-spacerun: yes;"> </span>The attorney that the
Chapter 7 Trustee employs usually has astronomical fees that can range up to
$800 an hour.<span style="mso-spacerun: yes;"> </span>If the Trustee is selling
your real property then the fees will be taken out of the proceeds from the
sale. <span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-size: large;"> </span></div>
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<span style="font-size: large;">I have been hired multiple times in the past to help
distressed homeowners convert to a <a href="http://www.evanslawonline.com/Bankruptcy/Chapter-13-Bankruptcy-Reorganization.shtml" target="_blank">Chapter 13</a> to stop the sale of their home
after they had improperly filed a Chapter 7 by themselves, with a paralegal, or
with an inexperienced attorney.<span style="mso-spacerun: yes;"> </span>It is
possible to stop the sale in some situations, but this is fact driven and
varies for each person.<span style="mso-spacerun: yes;"> </span>If the person is
successful in converting their case to a Chapter 13 they will still be required
to pay for any time expended by the Trustee and their professionals, and there
will be the added expense of the attorney’s fees to convert the case.<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-size: large;"> </span></div>
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<span style="font-size: large;">If this individual had consulted with an experienced
bankruptcy attorney in the first place the cost of the bankruptcy would have
been much lower and the outcome would be better.<span style="mso-spacerun: yes;"> </span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-size: large;"> </span></b></div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-47794684824587129122013-12-23T12:50:00.001-08:002013-12-23T12:50:32.633-08:00BE WARY – FILING BANKRUPTCY WITHOUT AN ATTORNEY: Trouble with the Automatic Stay<div class="MsoNormal">
Whether you are filing bankruptcy on your own behalf, or if
you have chosen to hire a paralegal you should be wary. There are many intricate nuances to the
bankruptcy code that an individual debtor or a paralegal will not be able to
navigate. One wrong misguided step could
cost you dearly.</div>
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Case in point
– the weekend before Christmas our office was receiving frantic calls on our
emergency line from a debtor whose lender had foreclosed on his home a couple
of days after his Chapter 13 case had been filed. He said that he was representing himself
(although I believe that he was getting help from a paralegal). The man was desperate to save his home that
had already been foreclosed on, and when he spoke to the lender they said that
they had a right to foreclose. After
looking into this problem for him it came to light that he had two prior cases
that were dismissed in the same year as the most recently filed Chapter 13
case. This meant that the bank was
correct and that the foreclosure was valid.
</div>
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When a
bankruptcy case is filed the debtor is protected by a federal shield called the
automatic stay. The automatic stay was
created to protect debtors from any and all collection attempts including (but
not limited to) pursuing a lawsuit, <a href="http://www.evanslawonline.com/Bankruptcy/Stop-Foreclosure.shtml" target="_blank">foreclosing on a home</a>, garnishing wages,
and even calling or writing letters to collect on a debt. This protection comes into existence
automatically when a bankruptcy case is filed and is taken very seriously by
judges, but it is not without limitations.
The code contains provisions which in some cases weaken the protections
for the debtor. </div>
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One such limitation is when a
debtor files multiple cases within one year.
If the debtor had one case that was previously dismissed then their
second case within the same year will only have an automatic stay for 30 days
unless certain steps are taken. If the
debtor had two or more cases that were dismissed then the next case filed in
the same year will have no automatic stay at all unless proactive steps are
taken and the Judge orders a stay into effect.
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Therefore, when attempting to use
the bankruptcy code to save a piece of real property make sure that you consult
with an experienced bankruptcy attorney who can properly advise you. If you have proper help you can ensure an outcome that does not result in the loss of assets. The attorneys' fees are usually more affordable than people think, especially before any problems arise in a case filed without an attorney. </div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-84989496788810277302013-12-18T09:18:00.002-08:002013-12-23T11:58:29.669-08:00SETTLEMENT OF MEDICAL DEBT<div class="MsoNormal">
Some people who are knocking on the bankruptcy door, just
have one or may have a handful of debts that are primarily <a href="http://www.evanslawonline.com/Bankruptcy/Credit-Card-Debt-And-Medical-Bills.shtml" target="_blank">medical debts</a>. Before jumping into the bankruptcy arena,
<a href="http://www.evanslawonline.com/Bankruptcy/Debt-Settlement-in-Lieu-of-Bankruptcy.shtml" target="_blank">settlement</a> may be pursued. Evans Law
Offices has had great success settling medical debt. The key to working out an arrangement that
benefits everyone is to know how to tactically position the settlement, and to
assist in any state court defense.
Medical debt does have some peculiarities in the settlement process,
especially if the debt is a large bill from a hospital. The key is tenacity and reasonableness. If this is your problem, maybe <a href="http://www.evanslawonline.com/Articles/Debt-Collection-and-Bankruptcy.shtml" target="_blank">settlement</a> is
the answer. Plan ahead, in advance of
any lawsuit. This kind of strategy can
ensure success, if at all possible.</div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-48635204196819714142013-12-12T14:03:00.001-08:002013-12-12T14:03:42.797-08:00CHAPTER 7 BANKRUPTCY FAILURE -- Rapper DMX's Bankruptcy Dismissed<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"> Recently, a judge in New York, threw out the bankruptcy filing of rapper
and hip hop star, DMX. DMX had filed
for <a href="http://www.evanslawonline.com/Bankruptcy/Low-Cost-Chapter-7-Liquidation.shtml" target="_blank">Chapter 7</a> relief due to crushing debt, including over $110,000 owed in
child support obligations (which is non-dischargeable). The case
failed, and the Federal Bankruptcy Court dismissed the case with an 18 month bar to refiling. The dismissal was due to failure to satisfy
trustee demands for information, and to properly document income of DMX. This set back does not mean that he cannot
seek bankruptcy relief in the future (once the time period of the filing bar has elapsed). He
could re-file once he is able to properly document his earnings, and possibly
his assets. DMX is not unlike any of us,
who got into debt, slowly, over time, and now, it is out of control. We hope that his financial affairs can be straightened
out, so the can get control of his financial life. Read more <a href="http://www.coloradodaily.com/entertainment/ci_24490541/judge-ny-rejects-dmxs-bankruptcy-filing" target="_blank">here</a>. </span>Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-34125106586030817932013-12-02T13:11:00.001-08:002013-12-02T13:11:54.714-08:00Can Debtors in California Discharge Traffic Tickets in Bankruptcy?Whether or not a debtor in bankruptcy can discharge a traffic ticket is dependent on federal and state law, and the answer may be different depending on the Chapter the individual files.<br />
<br />
The answer is clear for Chapter 7 cases and for a hardship discharge in a Chapter 13 case, NO. Traffic tickets may not be discharged in a Chapter 7 case or in the case of a hardship discharge in a Chapter 13 case because Bankruptcy Code Section 523(a)(7) provides that those cases do not discharge debts to the extent the debt is a fine or penalty payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss.<br />
<br />
Whether or not a debtor can discharge a traffic ticket in a Chapter 13 case depends on how the particular state classifies the traffic violation. If the state considers the offense a crime then the debt will not be discharged pursuant to Bankruptcy Code Section 1328(a)(3) which makes criminal fines non-dischargeable. In California traffic violations are classified as either infractions, misdemeanors, or felonies. In California all three of these classifications are included in the definition of a crime. See California Penal Code Section 16. <br />
In California debtors will not be able to discharge traffic tickets, but in a Chapter 13 case the debtor can provide for payment over time for the priority traffic fines.Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-35696793682369085912013-11-21T15:24:00.002-08:002013-11-21T15:24:55.249-08:00Popstar Files Chapter 7 & Bankruptcy Misinformation ReportedStars file for bankruptcy protection too! Aaron Carter, pop star and brother to Backstreet Boy singer, filed for Chapter 7 bankruptcy protection. Yahoo OMG! is spreading news of Aaron's Chapter 7 bankruptcy filing in an <a href="http://omg.yahoo.com/blogs/celeb-news/inside-aaron-carter-bankruptcy-wound-worth-just-8-201552078.html" target="_blank">article</a> written by Lauren Shutte. The article gives some history as to how Aaron Carter got into the financial upheaval. According to Lauren Shutte, the debt was accruing over years, and much of it can be blamed on forces beyond Aaron Carter's control. This article is spreading misinformation about Chapter 7 by intimating that Aaron Carter will be turning over all of his assets to the Chapter 7 Trustee (including his dog). The article also misstates the dischargeability of tax debt in a Chapter 7 case. <br />
<br />
This is simply not true. A <a href="http://www.evanslawonline.com/Bankruptcy/Low-Cost-Chapter-7-Liquidation.shtml" target="_blank">Chapter 7</a> is a liquidation proceeding, and the Chapter 7 Trustee does have the power to sell a debtor's assets. However, Chapter 7 debtors are entitled to certain protections for their personal and real property. These protections vary from state to state and are provided in the form of exemptions. Aaron Carter is able to exempt the majority of assets listed in his bankruptcy schedules. There are some assets which are not exempted or protected. The unprotected assets include publishing rights to certain songs, a portion of a Brietling watch, and a judgment that was assigned to him. <br />
<br />
For assets that are not protected by an exemption the Chapter 7 Trustee will assess whether or not there will be a potential value to creditors if that asset is pursued. If the Trustee believes that there are assets of value unprotected the Trustee will pursue the assets and administer any funds for the benefit of creditors. However, in order for the Trustee to pursue an asset it must not be protected by an exemption, and it must have value. Therefore, Aaron's dog listed with a value of zero will never be picked by the Trustee for sale. <br />
<br />
Also, most people who owe more than $20,000 in tax debt will have a lien recorded in the county that they live in. The result, is that when the bankruptcy case is filed, the taxing authority will have a security interest for plus dollar sum of the value of the assets. For those in the know, Aaron Carter had to file either a Chapter 7 or Chapter 11 because he exceeded the debt limits for the Chapter 13. The result of this, for poor Aaron Carter, is that he will not exit with a fresh start, because some of that debt will follow him later, and not dischargeable in the Chapter 7. Still, we are glad that Bankruptcy can help. Good luck Aaron Carter!Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-66146482685220366882013-11-20T13:07:00.000-08:002013-12-23T11:59:22.878-08:00Garnishment Basics in California<div class="MsoNormal">
One collection method that creditors can use is the
<a href="http://www.evanslawonline.com/Bankruptcy/Wage-Garnishment.shtml" target="_blank">garnishment</a> of wages. This is when money
is withheld by an individual’s employer to pay back the individual’s debt. The <a href="http://www.evanslawonline.com/Articles/Blueprint-of-a-Garnishment-in-California.shtml" target="_blank">wages subject to garnishment </a>will be
turned over to the levying officer (usually the sheriff) who turns the funds
over to the creditor. </div>
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Usually, a creditor must first sue the individual in state
court and obtain a judgment. Once the
creditor has a judgment the creditor can apply to the court for permission to
garnish the individual’s wages. This is
not true for all creditors. Some
creditors such as the IRS can garnish an individual’s wages without first
initiating a lawsuit and obtaining a judgment.</div>
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Once the creditor gets permission from the court to garnish
the individual’s wages an earnings withholding order is served upon the
employer. The employer is instructed to
give the employee 10 days notice of the garnishment. The employee’s wages can be withheld 10
calendar days after service is effected on the employer.</div>
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The maximum withholding is 25% of the individual’s
disposable earnings (in some instances the maximum withholding will be lower
than 25% -- see our article Blueprint of a Garnishment in California for more
detail). This is true even if more than
one creditor is attempting to garnish the individual. </div>
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If the garnishment is for spousal or child support the
amount garnished can range from 50% to 65% of the individuals earnings.</div>
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Some earnings are exempt from garnishment through action of
the individual (application for exemption through the court) or through the
nature of the funds (such as social security or veterans benefits).</div>
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Bankruptcy can help <a href="http://www.evanslawonline.com/Bankruptcy/Wage-Garnishment.shtml" target="_blank">stop a garnishmen</a>t (for most types of debts). Once the case is filed the automatic stay comes into play and acts as a shield to protect the individual from collection attempts by creditors (including garnishments). Any funds garnished after a bankruptcy case is filed must be returned to the debtor, as the garnishment violated the federal bankruptcy law.</div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-7919720118936108682013-11-12T11:57:00.002-08:002013-11-12T11:58:26.621-08:00Bankruptcy & Your Credit Report<div style="margin-bottom: .0001pt; margin: 0pt;">
<span style="font-size: 13.5pt;">People considering filing bankruptcy and individuals who have
filed bankruptcy have many questions about the effect of bankruptcy on their
credit report. The overall effect of the bankruptcy on an individual's
credit depends on a number of factors, such as the other items that are
reported on the credit report, and the individual or agency who is reviewing
the report.<o:p></o:p></span></div>
<div style="margin: 0pt 0pt 0.0001pt;">
<br /></div>
<div style="margin: 0pt 0pt 0.0001pt;">
<span style="font-size: 13.5pt;">After a bankruptcy case is filed it is
reported on an individual's credit report (just as other public records are
reported such as lawsuits and tax liens). The <a href="http://www.ftc.gov/os/statutes/031224fcra.pdf" target="_blank">Federal Fair Credit Reporting Act Section 605(a)(1)</a> provides that the bankruptcy must be removed
from the credit report ten years after the date the case was filed. This
remains true for <a href="http://www.evanslawonline.com/Bankruptcy/Low-Cost-Chapter-7-Liquidation.shtml" target="_blank">Chapter 7</a> cases; however, the credit reporting companies have
made a practice of removing <a href="http://www.evanslawonline.com/Bankruptcy/Chapter-13-Bankruptcy-Reorganization.shtml" target="_blank">Chapter 13</a> cases from individual's credit reports
after 7 years. The credit bureaus have said that this differing treatment
is due to the fact that a Chapter 13 is a reorganization plan, and the debtors
may be paying back some of their debt. (In reality in the majority of
Chapter 13 cases individuals are not paying back unsecured debts). <o:p></o:p></span></div>
<div style="margin: 0pt 0pt 0.0001pt;">
<br /></div>
<div style="margin: 0pt 0pt 0.0001pt;">
<span style="font-size: 13.5pt;">After a bankruptcy discharge is received
the balances on the debts that have been discharged should be changed to zero
(showing that nothing is owing on these debts). While any negative
entries, such as late payments, will remain on the credit report until the time
has passed for negative entries to fall off the credit report (that is
typically 7 years from the date of the entry).<o:p></o:p></span></div>
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<span style="font-size: 13.5pt;">It is possible
with diligent effort to rebuild one's credit score after a bankruptcy is filed. Even within the 7 year period where the bankruptcy remains on the credit
report. </span></div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-85073229607070157022013-11-08T11:58:00.001-08:002013-11-08T11:58:07.606-08:00Keeping Your Home California and Bankruptcy During these tough economic times we meet many people and families who are struggling to keep their homes. The most common thread to their struggles is that either property taxes or their mortgage payments are defaulted. Usually there is a reduction in income, or possibly increased mortgage payments under an adjustable rate mortgage that has caused the financial imbalance. While there are state programs that can help such as Keep Your Home California, or internal programs that your lender may have to help with short term defaulted solutions, bankruptcy should also be considered as a tool, and option to help save a home in jeopardy of loss. <br />
<br />
With the acquisition of real estate, comes for most people, an investment in the single largest asset of their financial life. When a property is lost in foreclosure, this event will be reported on a person's credit report, with obvious derogatory consequences. Before this happens, bankruptcy should be considered. For many who have been turned down for mortgage modifications, bankruptcy is the solution, to allow for reinstatement of the mortgage, or to allow for a new mortgage modification application through the bank's loss mitigation bankruptcy department. Amazingly, this has been the avenue that many people have found success in their struggles to save their home.<br />
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A <a href="http://www.evanslawonline.com/Bankruptcy/Chapter-13-Bankruptcy-Reorganization.shtml" target="_blank">Chapter 13</a> case can stop a pending<a href="http://www.evanslawonline.com/Bankruptcy/Stop-Foreclosure.shtml" target="_blank"> foreclosure sale</a>, and give individuals breathing room, a sense of security, and extra time to sort out the problems associated with the mortgage. (The bankruptcy will prevent the foreclosure until the case is closed or until the lender files a motion for relief from stay with the court). <br />
<br />
<span class="Apple-tab-span" style="white-space: pre;"> </span>The bankruptcy code allows people to reinstate their mortgage over the term of their Chapter 13 plan (3 to 5 years). Upon the completion of their case their mortgage will be current and they will no longer be facing foreclosure (that is assuming that all payments were made after their case was filed).<br />
<br />
<span class="Apple-tab-span" style="white-space: pre;"> </span>Here in California's bay area, there are two divisions which give debtors a second path for dealing with their mortgage arrears during the Chapter 13 case. This is to let the people try to modify their mortgage to deal with the arrears. This type of plan can be useful to people who have large arrears that are not easily cured through a plan. This is available in the San Jose division (which includes Santa Clara, Campbell, Gilroy, Salinas, Monterey, and other outlying cities), and in the San Francisco division.<br />
<br />
<span class="Apple-tab-span" style="white-space: pre;"> </span>Another aspect of Chapter 13 that helps people and families keep their homes is the ability to <a href="http://www.evanslawonline.com/Bankruptcy/Second-Mortgage-Lien-Stripping.shtml" target="_blank">remove a second mortgag</a>e. This is available when the property value is lower than the debt owing on the first mortgage. This can reduce the monthly obligations associated with the home, and make the retention of the property more feasible. <br />
<br />
<span class="Apple-tab-span" style="white-space: pre;"> </span>Bankruptcy is a financial tool that should be considered when the finances are too tight, or when a person's home becomes unaffordable. Many attorneys offer a free consultation that can be used to learn how bankruptcy can help you. Both the bankruptcy system and the people within the system are here to help.Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-78426457895917916302013-11-07T09:30:00.000-08:002013-11-07T09:30:01.159-08:00California Foreclosure Timelines<div class="MsoNormal">
In California the vast majority of <a href="http://www.evanslawonline.com/Bankruptcy/Stop-Foreclosure.shtml" target="_blank">foreclosures</a> are done
outside of the court system. This is
called a non-judicial foreclosure. In
other states, such as Hawaii, it is more common for the foreclosure to be done
through the court system (where an actual lawsuit is filed in court). This is called a judicial foreclosure. </div>
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The law
surrounding foreclosures here in California is currently evolving, and there
are new requirements about notices that a homeowner is supposed to receive
prior to the first step in the foreclosure process (these are a topic for a
post on a different day. This post will
just outline the basic timelines for a foreclosure starting with the Notice of Default).</div>
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<br /></div>
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First, a
lender must issue a <b>Notice of Default </b>(also
referred to as an NOD). This document is
required to tell the homeowner what the default is (ie what the total amount
the homeowner is behind in payments). The
NOD must be filed in the county in which the property is located, and it must
be mailed to the homeowner. Usually,
about 90 days after the notice of default (give or take a few days) the <b>Notice of Trustee Sale </b>is issued, recorded
at the county recorder’s office and mailed to the homeowner. This document sets forth the actual date that
the foreclosure will take place. The actual
sale must be scheduled at least 110 days from the NOD (or about 20 days from
the Notice of Trustee Sale). (See
<a href="http://www.car.org/legal/foreclosure-short-sale-folder/foreclosure-timeline-pdf-1/" target="_blank">California Association of Realtors Summary</a> for a more in depth look at the
timelines).</div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-63102451438882828872013-11-06T09:26:00.002-08:002013-11-06T09:26:39.496-08:00How Does Bankruptcy Stop a Foreclosure?<div class="MsoNormal">
If a bankruptcy case is filed before a foreclosure sale is
completed the bankruptcy will irrefutably stop the foreclosure from going
through. What is it about the filing of
a bankruptcy case that stops the foreclosure?
It is the <b>automatic stay </b>that
<a href="http://www.evanslawonline.com/Bankruptcy/Stop-Foreclosure.shtml" target="_blank">stops the foreclosure</a>. This automatic stay
is akin to a shield that once enacted by the filing of the bankruptcy case protects
debtors from collection actions of creditors, and this includes foreclosure.</div>
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This shield
is, as the title would have you believe, automatic. Courts take violations of this stay very
seriously, and when creditors violate the automatic stay the creditor can be in
jeopardy of financial sanctions, including paying for the debtor’s attorneys
fees to enforce the stay and in egregious cases punitive damages.</div>
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<br />
<div class="MsoNormal">
While all
bankruptcy chapters provide an automatic stay (with exceptions for repeat
filings) the different chapters are not created equally when it comes to
retaining your home. A Chapter 7 filing
would stop the foreclosure but would only act as a band aid. The Chapter 7 case typically lasts only 3 months,
and creditors routinely seek the court’s approval to lift the stay and proceed
with the foreclosure. A debtor does not
have tools at their disposal to readily combat the creditor’s request. A Chapter 13, on the other hand, is designed
to allow a homeowner to cure any defaults on their mortgage over a 5 year
term. Also, some courts (including San
Jose, Salinas, and Monterey) have local guidelines that allow individuals to
have additional time while in a Chapter 13 case to pursue a mortgage
modification (and be protected from foreclosure by the automatic stay). (See our <a href="http://www.evanslawonline.com/Foreclosure-and-Bankruptcy-How-does-it-work.shtml" target="_blank">article</a> on bankruptcy and foreclosure posted on evanslawonline.com)</div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-2074993102008759752013-11-05T10:34:00.001-08:002013-11-05T10:46:11.446-08:00High Interest Rate Credit Cards Cause Vicious Cycle<div class="MsoNormal">
Credit cards may be a lifesaver when you run out of funds to
purchase groceries and you have hungry children. Or your dishwasher breaks and you can only
afford to make payments over time. There
is a point when the <a href="http://www.evanslawonline.com/Bankruptcy/Credit-Card-Debt-And-Medical-Bills.shtml" target="_blank">credit card</a> turns from a useful tool into a budget wrecking
and money sucking thing. This is when
the credit card balance reaches a level beyond which the individual cannot
easily pay down, and the interest on the account is basically equal to the
minimum monthly payments. This cycle of
making the minimum monthly payment but never seeing the principal balance
decrease can go on for years.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In today’s economy with layoffs and other financial problems
it can be easy to get sucked into the vicious credit card cycle. It is especially easy with the high interest
rate cards that are offered (a large majority of our clients cards are over 20%
and I have even seen cards with rates as high as 36%). </div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
Something needs to give to break that cycle. Some individuals can do it by devoting more
money each month to the payments. Other
individuals simply cannot devote more than the minimums. Bankruptcy protection, Chapter 7, Chapter 13,
and Chapter 11, can provide a way to break the cycle. In Chapter 7, Chapter 13, and Chapter 11
individuals may be able to discharge (get rid of) their credit card balances
(subject to qualification standards set forth in the bankruptcy code). </div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-70304664376352094002013-11-04T09:30:00.000-08:002013-11-04T09:30:00.195-08:00Mi Pueblo Pushed Into Bankruptcy by a Cause Common to IndividualsOn July 22, 2013, Mi Pueblo filed for bankruptcy protection under Chapter 11 of the United States Code in the Northern District of California, San Jose Division (case no. 13-53893). The Honorable Arthur Weissbrodt is the presiding judge. <br />
<br />
The story of Mi Pueblo is similar to many individuals that we meet in our law firm. In the case of Mi Pueblo, Wells Fargo was a catalyst to the grocery chains need to file bankruptcy. Mi Pueblo had most of its cash in Wells Fargo accounts, and used loans from Wells Fargo to keep the day to day operations of the grocery store going. Wells Fargo attempted to change the terms of the loans with Mi Pueblo after becoming concerned about Mi Pueblo's debt to income ratio. (<a href="http://www.mercurynews.com/ci_23710872/mi-pueblo-files-chapter-11-bankruptcy" target="_blank">San Jose Mercury News</a>). <br />
<br />
Lenders do the same thing to individuals. Lenders will increase interest rates, reduce the available balances and hit consumers with penalties and other fees. This can cause a snowball effect that eventually leads an individual to feel the need to turn to <a href="http://www.evanslawonline.com/Bankruptcy/Credit-Card-Debt-And-Medical-Bills.shtml" target="_blank">bankruptcy protection for the fresh start</a> that it can provide.Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-49866703876331162702013-11-01T11:52:00.001-07:002013-11-01T11:52:29.629-07:00Detroit Troubled Bankruptcy FilingOn July 18, 2013, Detroit filed for Chapter 9 bankruptcy protection in the <a href="http://www.mieb.uscourts.gov/news/city-detroit-bankruptcy-filing" target="_blank">Eastern District of Michigan, Southern Division</a> (case number 13-53846). This is the largest municipal bankruptcy filing in American history! Detroit has a reported 18 billion dollars in debt, and included in that 18 billion is billions of dollars owed to approximately 23,000 retirees. The city was reportedly running a deficit of $1 million dollars a day at one point. (<a href="http://www.nytimes.com/2013/10/29/us/in-testimony-michigan-governor-says-bankruptcy-was-right-call-for-detroit.html?_r=0" target="_blank">New York Times</a>).<br />
<br />
At this time it is unclear whether or not Detroit will be allowed to remain in bankruptcy and reorganize their obligations. Individual debtors can reorganize their obligations in a <a href="http://www.evanslawonline.com/Bankruptcy/Chapter-13-Bankruptcy-Reorganization.shtml" target="_blank">Chapter 13 bankruptcy</a>, and in an individual bankruptcy filing the viability of the case is easier to predict. In individual cases it is a rare occurrence when other parties try to block the debtor's access to bankruptcy protection.Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-13163205536442908522013-10-31T12:44:00.002-07:002013-10-31T12:46:42.958-07:00New York City Opera Files for Bankruptcy ProtectionOn October 3, 2013, New York City Opera filed for bankruptcy (case number 13-13240) in the Southern District of New York. The opera filed a Chapter 11 case which will allow them to restructure the organization, or will allow them to sell off assets and liquidate. <a href="http://www.evanslawonline.com/Bankruptcy/Business-Bankruptcy.shtml" target="_blank">(Business Bankruptcy)</a>. <br />
<br />
Individuals have speculated that the opera will be <a href="http://www.bloomberg.com/news/2013-10-27/bankrupt-ny-city-opera-may-be-revived-on-purchase-campus.html" target="_blank">reorganized under different management</a>. The operas problems are the same type of problems that individuals face when they turn to bankruptcy for help. The opera's revenues were not great enough to support its expenses. T<a href="http://www.nytimes.com/2013/10/04/arts/music/new-york-city-opera-files-for-bankruptcy.html" target="_blank">he opera's largest creditor (approximately $1.6 million) is the New York City Ballet. Other creditors include landlord, employees (severance pay), pensions, and health fund.</a><br />
<br />
Time will tell what will happen to the opera which is such an iconic part of New York's history.Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-59826627701952592742013-07-02T16:33:00.002-07:002013-07-02T16:33:49.237-07:00MY DRIVER’S LICENSE IS SUSPENDED, WHAT CAN I DO?<div class="MsoNormal">
Driver’s
license suspension is an enforcement mechanism for various types of unpaid
debts or fines. In California, debt
owing to an individual may be the basis for a license suspension. This can occur if you have been sued, and a
judgment has issued for damages (property or personal injury) caused by a car accident. The good news is that many of these types of judgments
can be discharged in a bankruptcy case.
Depending on the injury and the type of damages, a<a href="http://www.evanslawonline.com/Bankruptcy/Low-Cost-Chapter-7-Liquidation.shtml"> Chapter 7 </a>case may be
the solution. Otherwise, a <a href="http://www.evanslawonline.com/Bankruptcy/Chapter-13-Bankruptcy-Reorganization.shtml">Chapter 13</a>
case can be filed. Chapter 13 allows for
a greater scope of dischargeability of various types of difficult debts, and
can often be the necessary step toward obtaining a release. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There are
various legal grounds for suspension in the State of California. California’s vehicle code section 16370
provides that an individual’s driver’s license can be suspended if the individual
fails to pay a judgment within 30 days of the judgment being issued. The judgment must be for property damage
exceeding $750 or for damage in any amount on account of bodily injury to or
death of any person resulting from operation of a motor vehicle on a highway in
California. Cal. Vehicle Code § 16251.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The driver’s
license will remain suspended until the judgment is satisfied (or one of
the other enumerated steps have been taken).
Cal. Vehicle Code § 16371.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Bankruptcy can,
for some, be a safe harbor that will allow an individual to have a fresh start
on life. It is possible to get a
driver’s license reinstated that has been suspended due to an unsatisfied
judgment related to a vehicle accident in California. To get the driver’s license released an
individual must receive a bankruptcy discharge and then provide a certified
copy of the discharge to the Department of Motor Vehicles. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
However, not
all individuals will be able receive a discharge of the underlying debt. Bankruptcy Code Section 523(a)(9) provides
that a debt for death or personal injury caused by the debtor’s unlawful
operation of a motor vehicle while the debtor was intoxicated from using
alcohol, a drug or another substance is not discharged. Thus, a driver’s license cannot be reinstated
through the bankruptcy process if it was suspended due to a judgment related to
a motor vehicle accident that involved drugs or alcohol, and the driver was
cited for a DUI. The specific facts of the case need to be reviewed by an
experienced attorney who will research the current state of the case and
statutory law, and review the judgment for the legal basis for the debt. Often there is a loophole that can be
utilized to gain a favorable outcome for the client.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Another common
basis for license suspension is non-paid child support. The best avenue for a driver’s license
release is to go to family court, with a properly noticed motion, requesting
the affirmative relief, with a plausible argument regarding the current state
of non-payment. Most judges are somewhat
sympathetic, and will issue a release if the proper documents are filed and
noticed with the Court.</div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com1tag:blogger.com,1999:blog-56158739053233369.post-62787793521423380562013-07-01T13:30:00.000-07:002013-11-13T19:02:40.437-08:00DEFENSE OF MARRIAGE ACT, PROPOSITION 8 AND THE COURT RULING OF JUNE 26, 2013 June 26, 2013 marked a fateful day in our country's history as the U.S. Supreme Court's long awaited decisions came down on the Defense of Marriage Act ("DOMA"), and California's Proposition 8. The effect of the Court's ruling was to strike down central portions of the DOMA act as violating the equal protection and liberty clauses of our U.S. Constitution. The Court found that certain provisions of DOMA were enacted to harm a discrete segment of our society and were therefore unlawfully discriminatory.<br />
<br />
As the ripple effect of the Court's ruling on DOMA is felt, those most affected by lack of access to federal benefits, our friends in the gay and lesbian community, can now enjoy equal access to privileges previously only conferred upon a marriage between a man and a woman.<br />
<br />
A second opinion handed down by the U.S. Supreme Court on the landmark day of June 26, 2013, is their decision finding that the appellant proponents of California's Proposition 8, which prevented gays and lesbian's from marrying in the State of California, lacked standing to bring the action before the Court. And, for this reason, Gov. Jerry Brown has ordered the State of California officials to immediately allow the issuing of marriage licenses to same sex couples. <br />
<br />
The Court's holding with respect to DOMA changes the landscape to clearly give rights where a complete lack of rights previously existed, such as areas of filing joint tax returns, probate laws with respect to the tax allocated upon death of a spouse, verses a non-spouse, social security benefits, ERISA Qualified Retirement Benefits, and other federal retirement benefits, military benefits conferred upon spouses including housing, living and death benefits. In other areas the boundary of clarity, which may have been hazy, is now brighter. Gays and Lesbians have been denied the equal rights in the federal bankruptcy arena. Needlessly, thousands of dollars are spent by same sex couples, as duplicative cases are filed due to the lack of clarity the previous status of the law brought to all of us.<br />
<br />
Fortunately, it may be possible to recoup losses, as there may be some retroactive application of the law. Couples should go to their tax professionals to see if amending the last 3 years of tax returns, including 2010, 2011 and 2012, can either lower any current tax obligation, or allow for a tax refund.<br />
<br />
For many, the outcome of the Court's decisions will be most felt in the area of healthcare, health insurance, and retirement planning. Now, gays and lesbians can enjoy the lower cost of adding a "spouse" to their health insurance plans, and can elect to add their spouses as "surviving spouses" for the benefits conferred under any ERISA Qualified Retirement Plans.Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-39703199915966014342013-06-24T15:14:00.000-07:002013-06-24T15:14:03.382-07:00CAN BANKRUPTCY HELP SOMEONE WITH MEDICAL BILLS?<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;">Unfortunately, in our present economic times, many people
with medical insurance still incur large medical debt when an illness requires
hospital care, or protracted medical treatment.
Depending upon the medical diagnosis, certain strategic planning may be
necessary in order to protect a person's or families' personal budget, and in
order to qualify for important medical financial assistance programs. </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;">Unfortunately, a recent<a href="http://www.forbes.com/sites/learnvest/2013/01/09/why-my-disease-could-send-my-family-into-bankruptcy/"> article</a> in Forbes told a story that is all too common for people who have gotten sick. </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;">The choice of which bankruptcy chapter to file, and when is
the correct time to file the bankruptcy case varies from case to case. Medical debt is dischargeable in
bankruptcy in both<a href="http://www.evanslawonline.com/Bankruptcy/Low-Cost-Chapter-7-Liquidation.shtml"> Chapter 7</a> and <a href="http://www.evanslawonline.com/Bankruptcy/Chapter-13-Bankruptcy-Reorganization.shtml">Chapter 13</a> cases. The timing of when the
medical debt was incurred, and what procedures were obtained should be
considered. If you are thinking about
filing bankruptcy for medical debt reasons, then the possibility of not filing
bankruptcy, and seeing if other alternatives are available should usually be
explored before a bankruptcy case is filed.
Many hospitals have internal programs that will reduce the debt, and
allow for a portion of the debt to be paid by the uninsured. Many health care providers will accept a
stepped down, or compromised payment from the sum owed. Before filing for bankruptcy,<a href="http://healthhelp.ca.gov/"> these programs</a>
should be explored.
</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;">When no payments are made on medical debt, like other unpaid
debt, the debt will be assigned to collection agencies or attorneys. Again, this debt can be settled or
compromised without filing for bankruptcy.
Usually, collection agencies will be reasonable with settlement offers
if the person does indeed qualify for a bankruptcy filing. If a person finds themselves in this
situation, then it is wise to consult with a bankruptcy professional, and
perhaps have this person work on <a href="http://www.evanslawonline.com/Bankruptcy/Debt-Settlement-in-Lieu-of-Bankruptcy.shtml">settling the debt</a>. The debt can often be settled for 25 percent,
based upon the face amount of the debt.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;">Bankruptcy should be considered if there is no way to make
some sort of compromised payment to the creditors. However, it is wise to time the bankruptcy
filing so that no new significant medical debt will be incurred after the
bankruptcy case is filed.</span></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;">See this <a href="http://www.examiner.com/article/medical-bills-cause-over-60-of-bankruptcies-filed-insurance-has-little-impact">article</a> for more
information on bankruptcy and medical debt. </span><span style="font-size: medium;"><o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-69244674470827132572013-06-07T16:27:00.001-07:002013-06-07T16:27:33.941-07:00Can I get rid of my second mortgage through a bankruptcy case?<br />
<div class="MsoNormal" style="text-indent: .5in;">
In today’s economic climate many
individuals are able to “get rid” of a second mortgage through their bankruptcy
case. The legal jargon for getting rid
of a junior lien in a bankruptcy case is “strip off,” or “lien avoidance.” In a Chapter 13 bankruptcy case an individual
debtor can strip off or remove a junior lien from their home and treat it as an
unsecured debt if certain conditions are met.
That means the second mortgage will be treated as an unsecured creditor
(the same as credit cards and medical bills).
In a typical case the second mortgage will not receive any money, but
this is not true in all cases. Depending
on different factors such as income and assets owned some individuals are
required to pay a percentage of their unsecured debts.</div>
<div class="MsoNormal" style="text-indent: .5in;">
<br /></div>
<div class="MsoNormal" style="text-indent: .5in;">
A junior mortgage can be stripped
off in a Chapter 13 bankruptcy case if the value of the home is less than the
amount owed to the senior liens. An
example is shown in the chart below:</div>
<div class="MsoNormal">
<br /></div>
<table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;">
<tbody>
<tr>
<td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .95in;" valign="top" width="91">
<div class="MsoNormal">
<br /></div>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 81.0pt;" valign="top" width="108">
<div class="MsoNormal">
Value of Home</div>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.5in;" valign="top" width="144">
<div class="MsoNormal">
Principal owed to 1<sup>st</sup> Mortgage Holder</div>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 103.5pt;" valign="top" width="138">
<div class="MsoNormal">
Principal owed to 2<sup>nd</sup> Mortgage Holder</div>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.9pt;" valign="top" width="157">
<div class="MsoNormal">
Is a lien strip possible?</div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .95in;" valign="top" width="91">
<div class="MsoNormal">
Scenario 1</div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 81.0pt;" valign="top" width="108">
<div class="MsoNormal">
$500,000</div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.5in;" valign="top" width="144">
<div class="MsoNormal">
$600,000</div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 103.5pt;" valign="top" width="138">
<div class="MsoNormal">
$75,000</div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.9pt;" valign="top" width="157">
<div class="MsoNormal">
Yes, the 2<sup>nd</sup> mortgage of $75k can be treated the
same as other unsecured debts</div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: .95in;" valign="top" width="91">
<div class="MsoNormal">
Scenario 2</div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 81.0pt;" valign="top" width="108">
<div class="MsoNormal">
$500,000</div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.5in;" valign="top" width="144">
<div class="MsoNormal">
$490,000</div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 103.5pt;" valign="top" width="138">
<div class="MsoNormal">
$75,000</div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.9pt;" valign="top" width="157">
<div class="MsoNormal">
No, the 2<sup>nd</sup> mortgage remains in place and must
be treated as other secured debts</div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
To be able
to get rid of your second mortgage in your bankruptcy case certain procedures
must be followed: (1) a Chapter 13 plan that states that the lien will be
stripped or removed; (2) a motion and accompanying documents must be filed with
the court, and (3) a court order must be obtained. The creditor has a chance to object to the
motion if the creditor believes that the home is worth more money (that the value
exceeds the amount of debt owed to senior liens as in scenario number 2). A creditor's objection can in a small number of cases turn into a mini trial on the value of your home (this is called an evidentiary hearing).</div>
<div class="MsoNormal">
<br /></div>
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"> The
typical lien strip order issued by the court requires the individual to
complete their bankruptcy case and receive a discharge before the lien is
actually removed. So if for some reason your case is closed before you actually complete it you will still owe the second mortgage creditor and they still have the ability to foreclose on your home (once you are no longer protected by your bankruptcy case). </span><br />
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><br /></span>
<span style="font-family: 'Times New Roman', serif; font-size: 16px;"> </span><span style="font-family: 'Times New Roman', serif; font-size: 16px;"> </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">At the end of the
case, a judgment can be applied for from the court which says that all
conditions have been met and the lien is officially stripped. This judgment should then be recorded at the
county recorder’s office to put the world on notice that the second mortgage is
no longer valid.</span><br />
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><br /></span>
<span style="font-family: 'Times New Roman', serif; font-size: 16px;"> </span><span style="font-family: 'Times New Roman', serif; font-size: 16px;"> As the economy stands today there are many individuals who are able to take advantage of the bankruptcy code provisions allowing the removal of a second mortgage. However, this may not be true for long as housing prices are increasing.</span>Anonymoushttp://www.blogger.com/profile/07963934533347953676noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-54771894536065061722013-05-29T16:22:00.002-07:002013-05-29T16:22:56.876-07:00DEBT, CREDIT REPAIR AND BANKRUPTCY <span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">As a bankruptcy lawyer with 19 years of
experience representing debtors through the bankruptcy process, I am all too
familiar with the common misgiving that everyone that goes through bankruptcy
has, that is, how will their credit be affected? And, how can they get their
credit back?</span><br />
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br /></span>
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Common threads that many people have who are struggling with
the concept of filing bankruptcy are that their credit may already be
damaged. For these people a bankruptcy
filing will likely not decrease their credit score. The question thereafter becomes, "how
will I get good credit back?" or "will the bankruptcy ruin my credit
for 10 years?"</div>
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The concept of good credit is
something that we all need to be aware of, because when we have good credit, we
have greater opportunities in our life to have and acquire "things"
that we may want, like cars and homes on credit, or just credit cards to help
us ease some of the stresses of our daily lives. Some of us feel that good credit is beyond
our reach. But really, each one of us
can have good credit. It is not beyond
the reach of any one of us if we care to work on the process. So, if there is old debt on the credit
report, the solution to the problem can be solved in one of three ways. </div>
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The first
would be to conduct credit repair in an aggressive manner. This can be done by writing demand letters to
remove debt on the basis that it is disputed.
When pursuing this, the consumer must write letters to each of the
credit bureaus (<a href="http://www.experian.com/disputes/main.html">Experian</a>, <a href="http://www.transunion.com/personal-credit/credit-disputes/credit-disputes.page">Transunion</a>, and <a href="https://www.ai.equifax.com/CreditInvestigation/">Equifax</a>). You may be able to electronically submit your credit dispute as well. The purpose of
the letter is to use the law under the <i><a href="http://www.ftc.gov/os/statutes/fdcpa/fdcpact.shtm">FairDebt Collections Practices Act</a></i> to
your benefit. I have personally seen the
effectiveness of this path through friends and family. This process can be time consuming, but is
worth pursuing to raise the credit score, and remove old debt that serves to
pull the credit score down. If you don't
have time to work on this yourself, firms like the <i><a href="http://www.lexingtonlaw.com/">Lexington Law Firm</a></i> have a
proven reputation for success, and for a reasonable fee, can complete all the
steps in this process for you.</div>
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The second
way a person can effectively deal with debt to increase their credit score is
to negotiate debt settlements with their creditors. This process entails usually the offer of a
lump sum settlement that approximates a percentage of the debt, usually 25% of
the face amount owing when the offer is made.
The problem with this course is that their may be one or two creditors
who will not negotiate, and who refuse to make any settlement at all. When this occurs, this forces people to file
bankruptcy, as they may not have the liquid funds to settle all the debt in
lump sum payments.</div>
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When the
debt is too high to settle, or too new to be effective with credit repair,
people often turn to the bankruptcy system for assistance. The bankruptcy, when used as a financial tool,
can be filed for the purpose of receiving a "clean slate" or
"fresh start." This avenue
should be seriously considered when looking at the following aspects of a
person's life: age, total savings,
including retirement and other savings and the present state of your credit
score. Age is considered in the context
of savings and investments., because as we age we have less time to save. The immediate future needs for the credit
should also be considered. Many people
don't have significant savings and investments, and unless you are planning on
buying a new home in the next two years, a bankruptcy filing will weigh positively
in the balance of pros and cons.</div>
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Once the
bankruptcy is concluded, the process of credit repair should begin. This process is different from the credit
repair conducted without a bankruptcy filing.
What becomes necessary after the case is concluded is that new
solicitations for credit are accepted by the consumer and properly managed. For the major credit bureaus, it is a numbers
game. Once the bankruptcy is completed,
you will not have personal liability on debt.
In order to have a good credit score, their must be a history of paying
on debt. The greater the number of
accounts, and credit extended, the higher a person's credit score will be or
become. This means that once a
bankruptcy case is finished, the person must apply for new credit cards to
improve their credit score. In the
beginning, it may be that all the person might obtain would be
"secured" credit cards. There
are companies that cater to assisting a person increase their credit score by
offering these sorts of cards (see <a href="http://www.bankrate.com/finance/credit-cards/10-questions-before-getting-a-secured-credit-card-1.aspx">Bankrate.com</a> for more information about secured cards). Although it may not seem
like a good deal, these sorts of cards go on a person's credit report and
assist greatly in increasing their overall scores. </div>
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If new credit cards are obtained, then the
next step is to manage the cards well.
No late payments should be made.
Ideally, the credit cards would be paid in full at the end of each
cycle. After 24 months of charging and
timely payments, a person's credit score will dramatically improve. I know of one individual who with successful
management of his credit was able to bring his credit score to the mid 700's in
two short years after his bankruptcy filing.
</div>
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<br /></div>
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"> Over
the years of my practice, I have personally witnessed the successes of many
clients who have filed bankruptcy and rebuilt their credit in a short time, and
go on to becoming real estate investors or the owners of new and successful
businesses.</span>Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0tag:blogger.com,1999:blog-56158739053233369.post-60564479249006983462013-05-20T17:14:00.000-07:002013-06-24T15:15:02.761-07:00Bankruptcy Chapters for Individuals in a Nutshell<div class="MsoNormal">
Bankruptcy is a financial tool that you are guaranteed by the
United States Constitution. There are
different bankruptcy structures for different situations. The different structures are defined in
bankruptcy law as “Chapters.” Individuals
have three bankruptcy chapters available to them:</div>
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<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
(1)<span style="font-size: 7pt;"> </span><!--[endif]-->Chapter
7</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
(2)<span style="font-size: 7pt;"> </span><!--[endif]-->Chapter
13</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
(3)<span style="font-size: 7pt;"> </span><!--[endif]-->Chapter
11</div>
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<b><a href="http://www.evanslawonline.com/Bankruptcy/Low-Cost-Chapter-7-Liquidation.shtml">Chapter 7</a> – Liquidation</b></div>
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Chapter 7 bankruptcy cases are the most common chapter for
individuals. Chapter 7 is sometimes
referred to as a liquidation proceeding.
The Chapter 7 Trustee (an individual appointed to oversee the Chapter 7
case) has the power to sell property if it is not protected by an
exemption. California provides two sets
of exemptions that individuals can use to protect their personal and real property. </div>
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A Chapter 7 bankruptcy case with no unexempt assets
typically lasts for three months. Some
cases are open for more than three months depending on different variables,
such as the Trustee may research specific asset values, among other reasons. Once the case has run its course the Court
will issue a <b>discharge</b> of debt,
which means that the individual no longer owes money on their debts. Some debts are not discharged, such as
student loans, most taxes, and spousal support or child support arrears. </div>
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If Trustee is selling assets then the case will stay open
longer before the Court issues a discharge.
Cases can be held open for a year or longer depending on the specific
facts of the case.</div>
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<b><a href="http://www.evanslawonline.com/Bankruptcy/Chapter-13-Bankruptcy-Reorganization.shtml">Chapter 13</a> – Reorganization
<o:p></o:p></b></div>
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Individuals who file Chapter 13 cases receive a similar
discharge as those in Chapter 7 (additional debts not discharged in a Chapter 7
case may be discharged in the Chapter 13’s superdischarge). A common misperception about Chapter 13 cases
is that individuals are required to pay their debts back. This stems from the fact that Chapter 13
debtors are making monthly payments to the Chapter 13 Trustee. These payments usually go to secured
creditors (car lenders, mortgage arrears), or to taxes that will not be
discharged and/or to pay attorneys fees.</div>
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This Chapter can help individuals who have fallen behind on
their mortgage payments, who are having <a href="http://www.evanslawonline.com/Bankruptcy/Wage-Garnishment-Auto-Repossession.shtml">difficulties with their car loans</a>, have
<a href="http://www.evanslawonline.com/Bankruptcy/Taxes-and-Bankruptcy.shtml">problem tax debt</a>, and many other situations.
The case typically lasts from three to five years. Many will close much earlier depending on how
the case was set up and the claims filed.
</div>
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<b>Chapter 11 –
Reorganization<o:p></o:p></b></div>
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Individuals only file Chapter 11 when they do not qualify
for Chapter 7 or Chapter 13. Chapter 11
is more burdensome in terms of the tasks required by law. Chapter 11 cases are for secured debts
exceeding $1.1 million and unsecured debts exceeding $380,000 for individuals
(approximate numbers as of May 2013), or for corporations or other shell
entities that need to reorganize their debt obligations.</div>
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<b>Common Elements:<o:p></o:p></b></div>
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In each Chapter an individual acts as a <b>Trustee</b> for the bankruptcy estate (in Chapter 11 proceedings the
debtor normally acts as their own trustee).
One thing the Trustee does is to ensure that the bankruptcy case is in
line with the bankruptcy law.</div>
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<br /></div>
<span style="font-family: 'Times New Roman', serif; font-size: 12pt;">Also, in each Chapter the individual is required
to attend a hearing called </span><b style="font-family: 'Times New Roman', serif; font-size: 12pt;">Meeting of
Creditors</b><span style="font-family: 'Times New Roman', serif; font-size: 12pt;">.</span><span style="font-family: 'Times New Roman', serif; font-size: 12pt;"> </span><span style="font-family: 'Times New Roman', serif; font-size: 12pt;">The Meeting of Creditors
is where the Trustee asks the individual questions under oath related to their bankruptcy
schedules.</span>Anonymoushttp://www.blogger.com/profile/00534571334888291301noreply@blogger.com0