If you are considering filing for bankruptcy, you should be aware that it will have a negative impact on your credit score. However, for many people their credit score is already damaged by late payments and defaults, so the impact of a bankruptcy filing is not that drastic. A Chapter 7 or Chapter 13 filing does not permanently destroy your credit rating. In fact, with time and dedication, you can rebuild your credit score. If you are interested in restoring your credit rating, you should start work as soon as you receive your discharge order. Below are a few of the factors the credit reporting bureaus consider when calculating your credit rating: Your payment history is an indication of how you handle finances. Thus, it is important that you review your credit report every year to verify that it is accurate. If you discover any mistakes, you should immediately seek to have your report corrected. In order to improve your credit score, you must establish…Read More
Although filing bankruptcy is becoming a more common and accepted thing, many people still worry about who will find out they filed a Chapter 7 or Chapter 13 case. All bankruptcy filings are a matter of public record, so it is possible for anyone who is searching to find out about your case. However, the reality is that most of the people you know will never be aware of your filing unless they are your creditor or you tell them about it yourself. There are certain parties that will receive notice of your case from the bankruptcy court. These parties are all of the people you owe money to, including loans from a friend or relative. It is important that you do not attempt to pay-off the loan you owe to a friend or family member just before your bankruptcy petition date to prevent them from receiving notice of your case. This is considered a “preferential payment” and the trustee will likely take action to…Read More
If you are planning to file for bankruptcy relief and you own a home, you are probably wondering what will happen to your real estate in your case. Bankruptcy law provides protections for certain types of assets, including your home. These laws are commonly referred to as “exemptions” and they remove the exempt asset from being included in your bankruptcy estate. To learn more about exemptions, please contact the legal team at The Law Office of Diane Anderson. You might be surprised to learn that your real property can actually be positively impacted by your bankruptcy filing. Consider the following: Lien Stripping If you have more than one mortgage on your home, you may be able to take advantage of a very powerful tool called “lien stripping.” If you owe more on your first mortgage than your home is worth, you are “underwater” on your home. This means that there is insufficient value to support the second or third mortgages. As a result, a Chapter 13…Read More
Most people who are appointed to serve as the personal representative of a loved one’s estate have no experience handling a probate action or how to administer assets. If you are feeling lost and not sure what your duties and obligations are, it is important to seek the advice and guidance of an experienced estate planning attorney. The duties and obligations of a California personal representative are numerous. The following are examples of some of the tasks you may be required to perform in administering your loved one’s estate: Reading of the Last Will and Testament Comply with the decedent’s instructions for burial or cremation Do what is necessary to protect assets of the estate – this may include notifying financial institutions, insurance companies and other entities of your loved one’s death File a probate action with the court Take a comprehensive inventory of the assets in the estate Have the estate assets appraised Provide the required notifications to beneficiaries, heirs and creditors If creditors…Read More
If you are planning to file a personal bankruptcy, it is important to understand that you have different types of debt which are treated differently in your filing. The main classifications of debt are priority debts, secured debts and unsecured debts. Below is a general explanation of each: Priority Debt The law provides certain types of debt with priority, which generally means that this type of debt must be paid in full and it is typically paid before other types of debt are paid. The most common examples of priority debts are taxes and child support payments. Secured Debt A secured loan is one in which the borrower pledges an asset as collateral to the lender. This type of transaction grants the lender the authority to foreclose or seize the property pledged as collateral if the borrower defaults on the loan. The collateral can then be sold or auctioned by the lender and the proceeds applied to pay all or a portion of the borrower’s…Read More
If you are trying to decide whether bankruptcy is the right debt relief option for you, we can help. Let us review your individual finances and help you understand all of your legal options. Below are also a few tips to consider prior to filing your Chapter 7 or Chapter 13 case: Work with a seasoned bankruptcy lawyer: Selecting the ‘right’ attorney is one of the most important decisions you can make. You want to work with somebody you trust and that you feel confident can handle all of the issues that may arise in your filing. Use your initial consultation to ask questions and see how well the lawyer answers them. Be sure you also discuss how the law firm will charge you and what legal services will be included for that fee. Continue making your mortgage payments: If you want to keep your home, you should remain current on your house payments. This is also true for your other secured loans, such as…Read More
Many married couples who are struggling financially seek debt relief by filing for bankruptcy. Once the decision to seek bankruptcy protection has been made, you must also decide whether one or both spouse should file. Although every case is different and you should confer with a knowledgeable bankruptcy attorney, below are a few factors to consider in deciding whether to file jointly: Debt The amount of debt you have is one of the most important factors in determining how to approach your bankruptcy filing. If most of a couple’s bills are held only by one spouse, a single filing by him or her could be a good option. However, this can be tricky since many debts are marital or joint debts and if only one spouse files bankruptcy, he or she will only be permitted to discharge his or her liability for the marital debts and all separately-held debts. This means that the non-filing spouse will still be obligated to pay for the full amount…Read More
A common concern our clients have when they are considering filing for bankruptcy is whether they can keep their vehicle. Below is a quick summary of how vehicles are treated in Chapter 7 and Chapter 13 filings: Chapter 7 When you file a Chapter 7 case, there are three primary options for how to handle your vehicle: Surrender: If you cannot afford your car payments or you no longer need it, you can voluntarily surrender it to your lender. The Chapter 7 process requires the lender to treat the surrender as payment in full because any deficiency balance that remains due on the vehicle is treated as unsecured debt, which is discharged or eliminated in your case. Redemption: If a debtor has sufficient funds to make a lump sum payment equal to the vehicle’s value, it can be redeemed. It is important to understand that what your car is worth is often much lower than what you owe on it. In other words, you may…Read More
If you do not have a power of attorney (POA), this blog is for you! A POA is a written document authorizing another person to act on your behalf in business and/or personal matters. It is important for you to take action to get a POA to help ensure you and your finances are protected if something should happen to you. Nobody knows what their future holds, so creating a POA while you are able to do so is essential. You can appoint a trusted individual to act as your agent or attorney in fact, which means they can make personal and/or financial decisions on your behalf if you become unable to do so for yourself. If it makes you nervous to consider granting this type of authority to another person, you should understand that a POA has a fiduciary obligation to you. In other words, the law requires your POA to act in your best interests and in accordance with your wishes at all…Read More
In 2005, the Bankruptcy Code was amended. Numerous changes were made, including the addition of the “means test,” which is a mathematical formula that is applied to a debtor’s finances to determine whether they qualify to file a Chapter 7 bankruptcy. The test is designed to determine if a debtor is abusing the system by filing for debt relief when the debtor actually has the ability to pay his or her debts. If you pass the test, you are allowed to file for debt relief under Chapter 7. If you fail the means test, the court assigns a “presumption of abuse” to your case and you have the burden of proof to overcome this designation. Even state has a “median income” for the applicable size of your household. If a debtor’s income is less than the state’s median income, the means test is not applied. Additionally, if the debtor is a disabled veteran or the majority of the debtor’s debt was incurred while serving active…Read More