San Diego Bankruptcy Lawyer- San Diego Bankruptcy Lawyer Blog

Chula Vista and East Lake Defaults and Foreclosures close to the end.

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May 092012

It appears that the economic downturn may have reached it’s bottom in Chula Vista . Things are picking up but there is a ways to go. Still, many people are still unemployed in Chula Vista and Eastlake and looking for work . To make matters worse, some of these same people are also dealing with the stress involved with losing their home. They need to know their options in these hard times .

The city of Chula Vista is one of the most distressed when it comes to default notices and foreclosures. In Chula Vista there are 15.4 Default notices per 1,000 homes this is particularly prevalent in the zip codes 91915 and 91913. These areas have been decimated by foreclosures. There are approximately 5 foreclosures per 1,000 homes in East Lake and Chula Vista. Though these numbers are lower than they were in 2011, they are still high. It’s likely that you, or someone you know, falls into one of these categories. Luckily, there are things you can do to get back on the right financial path. We are a bankruptcy lawyers, so this article will touch briefly on how bankruptcy can help you. However, there are always multiple options which we will discuss at your free consultation.

Chapter 7: These bankruptcy are typically for people who have negative cashflow (i.e. your monthly expenses are greater than your income). Chapter 7 will stop any foreclosure action for approximately 90 days. If you have accumulated mortgage arrears, this will buy you time to negotiate with your lender for some sort of modification of the loan. However, modification is the bank’s prerogative. So, it may be tough for you to hear, but you may lose your house anyway. The good thing is that after a chapter 7, you no longer have to worry being “on-the-hook” for you mortgage. You can just walk away and the bank can’t come after you.
Chapter 13: These bankruptcy proceedings CAN save your home but there is a catch. You will need to have positive cashflow every month. The amount of positive cashflow will need to be high enough to pay your mortgage arrears over the course of 36 – 60 months. There is also a chance that you will no longer have to pay that second mortgage you regret taking out. Yes, you read it right…in some instances a second mortgage lien can be removed in a chapter 13. If this looks like you call us to discuss

If you are going through this situation you are not alone.There are many people just like you who have run into things they just didn’t expect. People seem to have selective memory how easy it was to get credit on your home now that it all crashed in . If we can help call our number is 619-235-9645

Bankruptcy and Divorce In California - Can it get any worse?

alimony, attorney, bankruptcy, california, can I file bankruptcy, chapter 7, chapter13, child support, creditors, divorce, file bankruptcy, filing bankruptcy, lawyer, marriage, plan bankruptcy, priority debt, spousal support No Responses »

May 012012

Just when you think it could not get any worse, you are facing divorce and bankruptcy at the same time. In California this is truly complicated. Even though the pain and distress are incredibly difficult, there is hope. There are strategies to get your life back on track.

Marriage does not automatically make you responsible for debt that your spouse accrued before the marriage. However, if you live in a community property state such as California, your interest in certain community property can become part of the bankruptcy estate if your spouse files. Whether you live in a community property state or not, it is important to remember that a spouse’s debt can have very real consequences in your life. Many marriages end because of financial problems.

Have you cosigned for loans or credit cards during the time you were married? If you have, then you will be held liable for that debt. If your spouse files bankruptcy and you don’t, then the creditors will come after you. Beware of indemnification clauses in marital settlement agreements. Often, such a clause would say something like: “Spouse 1 shall be liable for the community debt owed to Home Depot in the amount of $25,000. If Spouse 1 defaults and Spouse 2 satisfies the debt, Spouse 2 is entitled to indemnification from Spouse 1.” In this latter scenario, if Spouse 1 files bankruptcy, Home Depot will leave him/her alone and will come after Spouse 2. If Spouse 2 pays the debt, Spouse 1 has to repay (indemnify) her/him, even though the debt is discharged in bankruptcy, and even if Spouse 1 listed Spouse 2 as a creditor in the bankruptcy. That’s because debts incurred between husbands and wives as the result of a divorce or legal separation agreement or court order are generally not dischargeable. The lone exception is that sometimes in a Chapter 13 debts as between spouses can be discharged.

It may be best to go all the way through a bankruptcy process before filing for divorce, because then you’ll have a clearer understanding of what your debt obligations will be. Filing for divorce first may be problematic, because a judgment of divorce binds the former spouses, not the creditors. Even if you andyour spouse agree about how property and debt should be divided, the creditors may have different ideas.

If you file for divorce first, your spouse can complicate the settlement process by filing for bankruptcy and a court will have to determine what assets are for support and what assets are part of the property settlement.

Remember that no one can get out of paying child support or spousal support by filing bankruptcy. In fact, spousal support and child support are a “priority debt,” and they must be given priority over other debts in a Chapter 13 plan. In some instances, a bankruptcy can delay the payments for a short time, but the debt itself will never be wiped away.

Is the obligation to your spouse for support or property settlement? Different courts use different criteria to answer this question, but the important thing to remember is this: if it’s for support, it’s not dischargeable. Chapter 7 post-petition earnings are available for maintenance, support, and alimony. Chapter 13 post-petition earnings usually can’t be collected while the automatic stay is in place, but the support obligation(s) still aren’t dischargeable. The creditor will eventually be able to get that money. Because this is tricky legal situation you might need a bankruptcy attorney and a divorce attorney to work together to get you the best most careful solutions. Some attorneys do, so call me if I can help.

Can I Leave Certain Debts Out Of Bankruptcy?

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Apr 242012

You don’t really have the option of leaving debts out of the bankruptcy. I hear from clients all the time, that there are debts that they do not want to add to the bankruptcy. Money that they owe to family is the most likely debts that they do not want to add to the Chapter 7 filing . Now the bankruptcy code requires that you list all of your creditors in the bankruptcy. In fact, in every creditor’s meeting I’ve ever been to in seventeen years, the Chapter 7 Trustee has always asked have you listed all of your creditors and all of your debts? Not telling the Chapter 7 trustee all the facts is always likely to get you in hot water

So, what happens if you leave a creditor out? Whether it’s intentional or accidental, the consequence can be serious. Worst case, the missing creditor can claim they have the proverbial “Get out of jail free” card and pursue you for the money. You can probably reopen the case and add the creditor, which solves your problem if the procedure works, but you should expect to pay (1) a filing fee of $280 and / or (2) a few hundred bucks for your attorney’s trouble in prosecuting the motion. Odds are pretty good that the motion will be unopposed. But, in the immortal words of Clint Eastwood’s Dirty Harry, “Do you feel lucky? Well, do ya?”

Best practice is to get ‘em all listed right up front. So, you know, there’s a lot of emphasis on making sure that there isn’t any unequal treatment among creditors. The bankruptcy Trustee wants to make sure that you’re not going to repay the twenty grand that you owe to Uncle Fred while you’re going to leave off the dozen or so credit cards that you owe one hundred thousand dollars to. Um, that’s not really allowed. You know, unsecured creditors all get treated; theoretically they all get treated equally.

7 of the most important Bankruptcy questions answered.

bankruptcy, before bankruptcy, can I file bankruptcy, chapter 7, chapter13 1 Response »

Apr 162012

Sometimes on the Internet we just get too much information and still do not know the answers to our questions. You have done so much googling about Chapter 7, bankruptcy, Chapter 13 your eyes have glazed over. I put together a quick overview of bankruptcy questions answered if you are thinking about bankruptcy. If you still have bankruptcy questions all the links you need are here if you want to know “What do I really need to know about bankruptcy?”

What is Bankruptcy? Bankruptcy is a legal petition filed in federal court by which you may seek a discharge of a debt when you can’t pay your bills. There are two main bankruptcies for individuals: Chapter 7 and Chapter 13.

Can I use my credit cards? If you are seriously considering filing bankruptcy it is important for you to stop using your credit cards. The new bankruptcy laws strongly prefer that you have 90 days of no use on your credit cards before you can discharge your debt.

When Should I consider filing for Bankruptcy? You should consider filing bankruptcy when you cannot pay your bills or when a particular crisis, such as an illness, accident or loss of employment makes the future payment of your bills very unlikely. Also, if a judgment is handed down against you, a bankruptcy may be used to stop the creditor from attaching your assets or wages.

Can Bankruptcy stop collection of taxes? Taxes are normally given priority and are difficult to erase. Bankruptcy will initially stop the collection process but may not eliminate the obligation to pay the taxes.

Does a Bankruptcy affect my credit? Yes. Future lenders may consider your bankruptcy when they are deciding whether to loan you money or credit. However, certain laws exist to prevent unlawful discrimination against you just because you filed for bankruptcy. The fact that you have filed for bankruptcy may be carried on your credit records for ten years.

If I choose Chapter 7 liquidation, do I lose all my assets? No. Bankruptcy law lets individual debtors keep certain property that is not subject to attachment and execution under state law. These assets include some or all of the debtor’s equity in his or her home, household goods, a car, certain retirement’s plans and numerous other assets.

What is the cost to file a Bankruptcy? The filing costs differ based upon the Chapter of Bankruptcy you file. Currently, fees are $306 for a Chapter 7 and $274 for a Chapter 13.

How long does a Bankruptcy take? Do I have to attend a Hearing? Chapter 7 bankruptcies require you to attend a meeting of creditors. If no objections are filed, the discharge can be entered in approximately 90 days. Chapter 13 bankruptcies take 48 months and may involve a number of hearings over an extended period with both the trustee and the court.

Student Loans,Bankruptcy and No good news

before bankruptcy, can I file bankruptcy, pre bankruptcy 2 Responses »

Mar 212011

In our law office we probably receive at least one call per day about bankruptcy and student loans .It’s always a frustrating call, we do want to help people No matter what people read on the Internet there is never a good solution for student loans that have gotten past what a normal person can pay. You could read everywhere from the Wall Street Journal to any money magazine that student loans are going to be the next big financial crisis. If you’re in our office you know that student loans are about the third most common cause of a major meltdown in everyday people’s lives.

Many of us have paid – with borrowed money - on average $30,000 per year for a “good education” only to discover that in this economy we’re lucky to make $15 per hour, if we can find work at all. The math doesn’t make sense, at least in the beginning.

There are sections in the Bankruptcy Code that give bankruptcy judges some leeway to discharge student loans under hardship clauses. But try finding an actual case where the judge has granted such a discharge. They’re scarce as unicorns. I have said, and still believe, that unless and until the borrower is on life support, the student loans are going to outlive him. According to the findings in Brunner v. New York State Higher Education Services, which set the precedent many courts follow for determining the standards of undue hardship, “(1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans”.

Meeting the undue hardship clause is extremely difficult, so don’t count on that happening unless you meet the strict criteria. If you do feel as though you meet the undue hardship criteria, you or your lawyer must file an adversary proceeding. That’s an affirmative step in bankruptcy litigation that isn’t normally required in order to discharge other kinds of debt. What this means is you’ll go into court to make and support your case for undue hardship. If you win, your student loans will be discharged in bankruptcy. Don’t ask me why it’s in the Code, because the opportunity for undue hardship discharge of student loans appears to be more lip service than substance. One of my colleagues attempted to obtain an undue hardship discharge for a client who was terminally ill, and whose physician had submitted a declaration that the borrower had only a short time left to live. Discharge was denied.

The Department of Education offers direct consolidation loans. Virtually all student loans are ultimately traceable back to the D.O.E. It’s an excellent place to begin your search for good options on consolidation loans. Check out their website. Some other websites worth checking out are: Sallie Mae, Fin Aid, and Student Loan Xpress. To compare student loan consolidation offers, Google “student loan consolidations” or consider contacting your college alumni or financial aid office for advice.

Credit scores -What are they ?

paul staley No Responses »

Mar 172011

My wife and I were going to refinance or home recently. We found out to our surprise that even though we paid our credit cards off on time, all the time that wasn’t enough. We had been dinged on our credit score . I mean they make this stuff so obscure ,credit scores , credit ratings , ficos scores??? I’m not going to try to over educate you, just enough information to give you updates on the latest in the ever changing world of credit reporting and credit ratings in America .

What’s in a score?

35 percent Payment History: “Having a long history making of payments on time and no missed payments on all credit accounts is one of the most important items lenders look for.”
30 percent Amount Owed: “This measures the amount you owe relative to the total amount of credit available. Someone closer to maxing out all their credit limits is deemed to be a higher risk of late payments in the future and this can lower their credit score.”
15 percent Length of Credit History: “In general, a credit report containing a list of accounts opened for a long time will help your credit score. The score considers your oldest account and the average age of all accounts.”
10 percent New Credit: “Opening several new credit accounts in a short period of time can lower your credit score. Also multiple credit report inquiries can represent a greater risk, but this does NOT include any requests made by you, an employer or by a lender who does so when sending you an unsolicited, “pre-approved” credit offer. Also, to compensate for rate shopping, the score counts multiple inquiries in any 14-day period as just one inquiry.”
10 percent Types of Credit in Use: “Your mix of credit cards, retail accounts, finance company loans and mortgage loans is considered.”

Boosting credit scores:

Here is where we had a little good news. Your credit scores are based on the last six months of recent history. That is the most weighted as it applies to recent activity. So six months of good credit history while have impact after your bankruptcy.

The other thing that will be surprising to you is that as soon as your bankruptcy is completed you will be getting credit card offers. I know you think that will be strange, but it will happen. Pick one or two that you’re comfortable with that gives you the best offer and start boosting your credit scores from there. We need to get the credit card offers only accept one or at least the first 90 days, and then it would be reasonable to accept another. About 5 credit cards should be your limit in the next five years. If you decide to close some credit accounts, close the newer accounts first. However, don’t close more accounts than necessary because this lowers your ratio of debt to available credit. Rotate and use all of your cards – a dormant credit account will not help your score. Remember, FICO scores reward people who use a smaller percentage of their available credit. Some people suggest never using more than 50 percent of your limit on any card.

Because payment history comprises the largest part of your FICO score, making a habit of paying bills and other payments on time is obviously going to have the largest positive impact. I know that remembering when you pay all those bills can be confusing. It’s my suggestion that you go online and when you get a new credit card put it on automatic payments for more than the minimal amount. If you do this and you forget to make your payment on time, which most of us have done there won’t be any repercussions on your credit report.

I hope this was helpful to give you just enough information. Find good information at MSN Money, they have a lot easy-to-understand, don’t boggle my mind with details I don’t need

Strategic Default-Moral? Immoral? or just confusing

paul staley No Responses »

Feb 072011

If you watch and news you get the impression that strategic default is what everyone is doing , the latest thing. Kinda like pet rocks and disco. Interviewers in TV and print media seem to uniformly begin with the premise that a borrower who defaults when he can afford to pay his mortgage is a deadbeat. Responses to CBS’s story a week ago about a La Jolla, California business man’s strategic default on his condo were right in line with the newscaster’s bias. He was decried as a cheat, a fraud, and a deadbeat. The fact that he was ignoring a $10,000 / month mortgage and still living in the ocean-view home didn’t help endear him to viewers, that’s for sure. But I gotta say, that guy is the exception. Most of the people I know who strategically default don’t seem nearly so casual, nor as liquid a comfortable as did the La Jolla man.

When do you know it’s time to walk away? The answers can be different depending on what you know you can tolerate. The obvious questions are:

Is your mortgage payment (with taxes, insurance, HOA’s etc.) about equal to what you’d pay in rent? If so, then there’s no rush to get out of the property or the loan. You may actually saving a bit of money on taxes with the itemized deductions for home ownership.

If renting is substantially cheaper than continuing to own, the choice can be pretty simple. Walk away. But be sure you know what the risks are first. Do your homework. Spend the money and get a consult with an attorney. Some states, like California, have an “antideficiency statute”, which is a fancy way to say that if you default on the mortgage on your primary residence, the only thing the mortgage lender can do it foreclose; they can’t sue you for money. But this isn’t as simple as all that, either. The rule only applies to lenders on FIRST mortgages that are purchase money loans (i.e. taken out to buy the property); not, for example, to refinanced loans or second (or third, etc.) mortgages.

If the renting vs. owning analysis doesn’t give you an obvious conclusion, think about whether it’s likely you’ll ever have equity in the house in the time frame you want to remain in it. These days, it seems safe to predict real estate prices aren’t about to skyrocket. They’re flat; have been so for about a year and a half, after steep declines. This is something of a guessing game, but still, you get to make your best guess and act on it. If you’re paying a premium over the cost of renting, AND the home is seriously “upside down”, it makes economic sense to walk away. With the right plan to help your credit score recover, you could be back in the real estate market in a couple of years, buying, maybe in the same neighborhood, at the “adjusted” current rate.

Whatever you decide is right for you do your research and speak to an attorney. You see so many people on the news making strategic default decisions without any solid information behind them.They might not get into trouble but they’re leaving themselves wide open. Good luck out there.

DYI BANKRUPTCY MEANS TEST ONLINE OR DO IT YOURSELF SURGERY

paul staley 5 Responses »

Jan 312011

Did you know you can do your own bankruptcy Means Test online? Sure! Click here. Oh, wait: while you’re at it, if you’re one of the vast majority of us who is overweight ( and there are a lot of us ), and you’re shopping online, browse on over to Amazon.com and pick up – on the cheap - a lap-band surgery kit with do-it-yourself instructions. I recommend do-it-yourself surgery just as heartily as I do navigating the Means Test without professional guidance. I mean, I wouldn’t take a scalpel to my tummy no matter how fat I had become.

I’ve seen the results of the the DYI Means Tests. They’re abysmal. Not a single one in nearly five and half years has been correctly done. Even getting close isn’t good enough. This is not horseshoes or hand grenades. In the high stakes of all-or-nothing determination in front of the bankruptcy court of the “presumption of abuse”, try to imagine Clint Eastwood as Dirty Harry, with a .44 Magnum at your head, asking: “Do ya feel lucky? Well, do ya?”

If you’re online trying to do your own Means Test, you’re in enough trouble that you really need to talk to a good bankruptcy lawyer. So go ahead, research online. Educate yourself. But don’t pick up the scalpel just because you can. Lots of good bankruptcy lawyers offer a consultation for free. (What a coincidence – so do many weight loss surgeons!)

The likelihood that an inexperienced user is going to get the wrong result attempting the Means Test is, oh, say, 100%. I would no more know how long the incision should be for insertion of the…stuff that goes in the stomach should be than the man in the moon. I have a general familiarity with anatomy. I took biology in high school. I’m comfortable putting on a bandage. But if I get a really bad cut, I’m going to have a pro stitch me up. I wouldn’t even ask my wife to do it.

Nolo is, of course, not alone. One can find the DYI Means Test forms and, in fact, ALL the bankruptcy forms on the U.S. Bankruptcy Court website in each district. Does that mean it’s a good idea for the uninitated to try and go it alone? For almost everyone, the answer to that is a resounding NO! Doing the means test online is like knowing which of the ingredients to use and no idea of how much.

There simply is no substitute for getting advice from an experienced, knowledgeable bankruptcy attorney who takes the time to go through this arduous exercise – the Means Test, I mean – with you. Or, hey, there’s DYI surgery and a lot of us are fat. ”Do you feel lucky? Well, do ya?”

Check your Credit report-You might find Mistakes

paul staley No Responses »

Jan 282011

In January you should stop and check your credit report. Mistakes on credit reports aren’t as rare as you might hope. And they can happen to anybody. Debts that you thought had been paid show up as being in collections. Or debts that you didn’t even realize were out there – ever – appear. And, sometimes, debts that aren’t even yours! With the increasing ease of identity theft, the odds are constantly going up that you may find debts on your credit report that look like they came from another planet. You won’t recognize the name of the creditor, the amount of the debt, nothing about it will seem familiar to you. That’s because you had nothing to do with it in the first place. Some enterprising thief got enough information about you to set up an account online and put “you” in debt – for, say, tens of thousands of dollars.

If you’re getting ready to file Ch. 7 bankruptcy anyway, it’s a great opportunity to both dispute the debt and get rid of it. Creditors can be a bit lazy about investigating the genuineness of debts. They’d rather try to scare even an innocent victim of identity theft into paying the debt. After all, lots of debt collectors get paid strictly based on how much they collect. Filing bankruptcy makes the genuineness issue moot – no one cares anymore if the debt was legit to begin with – and you can even indicate in your bankruptcy that it is “disputed.” If you have already filed bankruptcy and there are still accounts showing up on your credit report, this is the perfect opportunity for you to catch the creditors in the act and make them stop. There can be serious fines (sanctions) imposed on creditors who don’t play by the bankruptcy rules.

The best place to get your free, annual credit report is: www.annualcreditreport.com. Virtually all other sites will require a credit card number and a subscription to an identify theft protection plan at a price of about $15.00 per month, or more. www.annualcreditreport.com, on the other hand, is a site that government regulators require the major credit reporting agencies to maintain. They’re not allowed to charge a fee, and must provide a free report once a year on request by the consumer.

It’s the beginning of a new year. It’s the perfect time to clean up your credit. Go ahead. See what’s on there. Be prepared for a few surprises..

Pay your bankruptcy costs with your tax refund

paul staley No Responses »

Jan 172011

You went to see a bankruptcy lawyer about bankruptcy You know now from the appointment that in fact you’re a great candidate for Chapter 7 bankruptcy, which will give you a fresh start financially. Oh, wait – that was the good news. The bad news: sadly, you have to come up with all the money for your bankruptcy costs before the case can be filed. Kind of a catch-22 thing, right? It’s tough to catch your breath between pay checks for long enough to set any money aside for this really, really important project.

Here’s the other good news part of the sandwich: It’s that time of year: tax season! Paying your bankruptcy with your tax refund is a solution. For many of us, this means a hefty tax refund because we’ve been overpaying Uncle Sam (and The Governator) all year long. It’s okay: you can spend this money on your bankruptcy. No one can force you to use it to pay debts. By the time you have seen a bankruptcy lawyer ,you know things aren’t good ..sometimes it is better to just move-on . Please don’t tell me you were thinking of using it to pay down credit card debt. Getting out of the cycle of big payments on credit cards at high interest rates, sucking your bank account dry every month, takes the sudden, full force of bankruptcy to reverse. The creditors calling you, harassing you, making you feel like the only “right” thing you can do is to pay them. With your tax refund in hand, you have the power to take back your life by getting your fresh start in Chapter 7 bankruptcy. It really is as simple – and as powerful as that.

While you’re pondering what options you have in spending that tax refund, remember: if you’ve been waiting to get your Chapter 7 bankruptcy filed, that’s the best investment you could possibly make with your tax refund. Unless, of course, you have an inside track on the winning lottery numbers;)

Older Entries

Chula Vista and East Lake Defaults and Foreclosures close to the end.

Bankruptcy and Divorce In California - Can it get any worse?

Can I Leave Certain Debts Out Of Bankruptcy?

7 of the most important Bankruptcy questions answered.

Student Loans,Bankruptcy and No good news

Credit scores -What are they ?

Strategic Default-Moral? Immoral? or just confusing

DYI BANKRUPTCY MEANS TEST ONLINE OR DO IT YOURSELF SURGERY

Check your Credit report-You might find Mistakes

Pay your bankruptcy costs with your tax refund

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