Most homeowners want to avoid foreclosure if at all possible. If you are struggling with paying your mortgage, it is important to explore all of your available options. This blog will focus on the pros and cons of filing for bankruptcy versus pursuing a short sale of your home. While both choices can be beneficial, deciding which is better for you depends on your unique circumstances. Below are a few questions to ask yourself: Am I Under A Deadline? The short sale process can be extremely time-consuming. There are several different parties that must be involved in the negotiations, which can make reaching an agreement difficult. Additionally, at the end of the short sale the homeowner does not have a guarantee that the sale will successfully close. A personal bankruptcy filing provides the homeowner with immediate relief. The automatic stay halts all types of collection activity, including foreclosure lawsuits. A typical Chapter 7 case lasts three to five months and a Chapter 13 case lasts…Read More
When you are considering filing a Chapter 7 or Chapter 13, you typically worry about what physical assets will be included in your bankruptcy estate. However, it is also essential that you consider your intangible assets as well. For instance, if you were involved in a traffic accident and a court awarded you a monetary judgement or you entered in a settlement to recover your damages suffered, you should confer with your bankruptcy lawyer to determine how those funds will be treated in your filing. All debtors are required to disclose every kind of asset they own, including a claim from a personal injury. Even if you have not filed a personal injury lawsuit prior to filing for bankruptcy, you must disclose your potential claim. The trustee must be notified that you could potentially receive a monetary award in the future. Failing to make this disclosure could be considered fraud. If you file a Chapter 7 case, you can claim an exemption to protect all or a…Read More
If you are trying to decide whether or not filing for bankruptcy is the best debt relief option for you, let us help. We understand that dealing with overwhelming debt is stressful. We also know that you are probably worried about losing your assets during the bankruptcy process. However, it is important for you to understand that bankruptcy law provides a wide variety of laws that protect many of your valuable assets from being included in your bankruptcy estate. These laws are referred to as “exemptions.” Both federal law and state laws provide exemptions. In many states, a debtor can choose whether to use federal or state exemptions. In California, however, a debtor is required to use the state law exemptions. Fortunately, California offers two state exemption systems you can choose from to apply to your filing. Every debtor’s case is unique, so you should confer with a seasoned bankruptcy attorney to determine which exemption system you should use. Generally speaking, a debtor with a…Read More
If you have been postponing creating your estate plan, you are not alone. Most people know they need to do it, but they feel overwhelmed by the idea of actually meeting with an estate planning attorney to get it done. A comprehensive estate plan not only protects your loved ones after you are gone, it also protects you while you are living. Below are some important tips to consider: Every estate plan is unique and created to suite your individual needs. The basic components of an estate plan include a Will, appointment of guardian for minor children, durable power of attorney, and healthcare power of attorney (or proxy). For many individuals a trust is extremely beneficial because it helps you avoid the probate process. Trusts are not only for the wealthy – they provide you flexibility to decide when and how your assets should be distributed to your loved ones, as well as allowing you to reduce certain taxes. It is important to draft a…Read More
All debtors are required to attend a meeting of creditors in their bankruptcy case. It is also commonly called the “341 meeting” since it is required by 11 U.S.C. §341. At the meeting the debtor is required to testify under oath regarding his or her finances. The trustee and any of your creditors in attendance are allowed to ask questions. The meeting of creditors is usually scheduled around 40 days after your filing date. The trustee presiding over your filing will ask you to bring certain documents of his or her review. The trustee also asks the majority of the questions because most creditors do not actually attend the meeting. It is important to note that a debtor’s failure to appear at the 341 meeting could result in the case being delayed or even dismissed. Prior to your hearing date, your attorney and/or your trustee will send you a notice of the documentation you will need to bring with you. Common examples include government issued…Read More
It is important to understand that not all bankruptcy filings are treated the same when it comes to your credit score. The impact of bankruptcy on your credit rating is one of the biggest concerns many clients have. For many debtors, the damage caused by a bankruptcy filing is minimal because their credit score is already low due to negative payment history, asset seizures, lawsuits and garnishments. Even the lowering of your credit score is worth it for most people when compared to the amount of debt they are able to discharge and eliminate in their filing. If you file for debt relief under Chapter 7, the bankruptcy notation will remain on your credit report for ten years from the date you file your case. A Chapter 13 filing will only be noted on your credit file for seven years from your petition date. The theory behind the shorter time frame for Chapter 13 is due to the fact that Chapter 13 debtors repay a…Read More
When you are struggling financially, talking to an attorney probably seems like the last thing you want to do. Lawyers are often perceived as being intimidating and unfriendly. However, the vast majority of attorneys are people who just want to help you out. In fact, some of us have been exactly where you are and know from personal experience what facing bankruptcy feels like. Fortunately, I have used that personal experience to benefit my clients and help them come out on the other side with a fresh financial start like I did! Below are a few tips for how to talk to your bankruptcy attorney to help ensure you receive the debt relief help you need: There is a method to the madness! Most seasoned bankruptcy attorneys have created a process for clients to follow to ensure we obtain the information we need in order to ensure you get the most comprehensive debt relief available to you. We know the questionnaire you have to fill…Read More
One question many clients ask us is whether or not their financial situation warrants filing a Chapter 7 of Chapter 13 case. After reviewing your individual circumstances, we can answer this question for you. In the meantime, this blog discusses some of the factors that indicate bankruptcy is the best debt relief option for you. Consider the following: You are delinquent on your mortgage payments and a foreclosure action has been threatened or commenced against you You have gotten divorced and you are overwhelmed with your portion of the marital debt The value of your home is less than what you owe on your first mortgage and you have multiple mortgages Secured creditors are threatening or seek to seize assets pledged as collateral Debt collectors are filing lawsuits against you You have lost your job You have bank account or wage garnishments pending against you Debt collectors are using harassing debt collection tactics You are constantly stressed over your finances You are delinquent on your…Read More
Hopefully you have read our prior blog titled “How Filing Chapter 7 can Improve your Financial Life” to learn the benefits of Chapter 7 cases. This blog will discuss the Chapter 13 process and how a plan of reorganization can benefit you. When you file for bankruptcy protection under Chapter 13, you must have a routine source of income to fund your plan of repayment. Your Chapter 13 plan will outline how you intend to repay your creditors all or a percentage (0-100%) of what is owed to them. The law requires your Chapter 13 plan to last a minimum of three years and a maximum of five years. Finally, you will be required to make monthly payments to the Chapter 13 trustee who will distribute the payments to your creditors as set forth in the plan. Drafting a Chapter 13 plan can be confusing, so it is wise to seek the assistance of an experienced bankruptcy attorney. Each type of debt you owe falls…Read More
If you are planning to file for bankruptcy protection, one of the first decisions you must make is what type of case you want to file and whether you qualify to file it. The two most common types of personal bankruptcy cases are Chapter 7 and Chapter 13. You may only be eligible to file one type of bankruptcy. This blog will discuss the advantages of filing a Chapter 7 case. To learn more about filing a Chapter 13, please read our next blog titled “You Need a Plan for your Chapter 13 Filing.” The Chapter 7 bankruptcy process offers a debtor numerous benefits. Below are a few of the most common reasons why individuals struggling with debt file for debt relief under Chapter 7: Unsecured Debt Discharge If you are overwhelmed by unsecured debt such as your credit card or medical bills, Chapter 7 allows you to eliminate the majority (if not all) of your unsecured debt. For many debtors, this means canceling thousands…Read More