Riverside County Bankruptcy Lawyer Blog

Personal bankruptcy rose 9% in July according to the Wall Street Journal. That is a anumber of close to 138,000 in one month leading me to believe that 2010 will be the highest number of filings in five years. 2009 saw 1.4 million people file and we are already at 900,000 for 2010. For people who have had the credit rating reduced and are having a hard time finding a credit source, bankruptcy becomes one of the only ways to get out of a financial mess. The 2005 bankruptcy changes have had little impact in terms of reducing the number of filings. The main purpose was to force people into chapter 13 but creating the means test and the % of chapter 13's have not drasstically changed and many people still qualify for chapter 7 relief.

California has almost jumped 30% in the nmber of filings as opposed to a year ago. With Riverside County having 15% unemployment I don't see the trend stopping any time soon. One out of every 125 households has filed for bankruptcy protection in the last year. It is beoming apparantly obvious that bankruptcy has lost some of the stigma that was traditionally associated with it. My opinion is that it inevitably becomes a stimulous to the economy since consumers get to spend again instead of putting all there money into interest fees that have skyrocketed even while banks are borrowing money at less than 1%. 70% of our economy is based on consumer spending and sometimes being able to walk away from deficiency judgments and potential wage garnishments is better than contributing to bank profits when the banks are failing to put that money back into our communities. If you are paying to much in interest rates or are facing foreclosure or other financial problems, talk to a California Bankruptcy attorney who practices in all the federal districts.

Everyday I have clients that wonder whether they should continue to make payments on a home that has lost so much value. I think you need to consider whether you are in an interest only loan and the payments will reset to something that is not affordable. The other consideration I take into account are what the prices for a rental would be and if its similar then potentially staying in your home is a better bet depending on how far behind on your mortgage or upside down you are and therefore the length of time it will take to build equity. As a bankruptcy attorney I believe it is imperative to go over all options with a client and let them make a informed decision.

According to the new FTC Telemarketing Sales Rule debt relief companies who receive inbound calls are also now prevented from receiving up front fees until a debt is settled. Many debt settlement companies charge upwards of 15% and charge this before anything is paid to your creditors. Meanwhile your interest rates are rising, late payments are accumulating, and other fees are being asessed. Essentially there will be no frontloading payments only to have you sued by creditors inevitably unless you can pay quick enough on a settlement and depending on your assets a company might not want to settle. Unfortunately many companies do not truly look into whether debt settlement is the right option and consumers are constantly bombarded by advertisments of promises to settle at 50% of what is owed and saving their credit. Typically by not paying your credit cards for months on end you will be offered a settlement to pay as a lump sum, you end up with late payments and settled for less than amount owed on your credit report for 7 years. While its true that bankruptcy stays on your credit report for 10 years, by the time you settle all your credit cards if you have a lot of debt it will take 2-3 years and then it will be reported for 10 which is virtually the same thing.

Fortunately debt negotiations will still be a viable alternative for a bankruptcy attorney to review since attorneys aren't making telemarketing calls or receving inbound calls from advertising. Clients that meet with a debt relief agent in person are not subject to the rule but some will still try to charge up front fees that are egregious fees, this at least stops the deceptive phone campaigns that are being waged across the country. I do believe in debt settlement for some people which is not a popular position amongst bankruptcy attorneys as many have seen the perils that it has had on clients who have wasted their money only to end up in the same situation but with much less of a fresh start. I understand that but also see it as a tool for people who have access to quick funds through a new business or have the ability to get a loan from family and who might otherwise pay more over a long Chapter13 plan.

The new rules ensures that companies disclose tax consequences associated with debt settlement, stops them from using bad statitstical data on past successes by not including drop outs and other important considerations, and makes sure they explain the time it will take based on current payments and other important disclosures. These are all things that I have been doing and assessing with any client that considers having me negotiate with their creditors. Debt settlement can be a risky venture to take although it can be very worthwhile if done right and should come with a list of disclosures and verifable statitics that can be enforced through fines and penalties assessed by the FTC. It is a good day for consumers and hopefully this will direct some of the people who really should be considering filing for bankruptcy instead of being lured into a false illusion of debt settlement based on small savings and 3 years plans that often fail. Talk to a qualified riverside bankruptcy attorney to see if debt settlement is a viable option and then learn about bankruptcy.

Hunt and Henriques seems very trigger happy to sue but not so diligent in taking care of their lawsuits. If you have been sued by Hunt and Henriques or recently received a summons, there are several options available. You can file a chapter 7 or chapter 13 bankruptcy. You can try to negotiate with them before they get a judgment and most likely can get 70% settlement on what you owe. You can fight the lawsuit and hope they don't follow the local court rules which isn't as unlikely as you'd imagine. This is a major debt collector structured as a law firm, but one that is hard to get a hold of and one that doesn't necessarily show up with the right documents to court.

A chapter 7 bankruptcy if you qualify will wipe out the debt completely. A chapter 13 will allow you to pay pennies on the dollar or if you have a lot of assets or money at least stretch your payments over 3-5 years depending on your income level. Hunt and Henriques is the biggest collector for Citi and if you spend any time trying to get a hold of them you will see why I believe optimism should prevail in the fact that you've been sued by a debt collector who doesn't follow through with all their cases.

Chapter 13 has some powerful aspects that can really help people with financed vehicles. In a chapter 13 if you owe more on your vehicle than the current market value(blue book) then we can restructure your financing so that you pay on what the car is actually worth. This only works if the financing is more than 2.5 years old so you can't buy a new car and walk off the lot and get it crammed down, but it works for a lot of people and can save you quite a bit of money.

I have had clients that have been able to fund a chapter 13 plan just in the savings that they made by cramming down their car. If you owe 20k on a car and its only worth 10k then just the money you save in financing would give you 200 a month to fund a chapter 13 plan.

Although Chapter 7 can be a faster way to get debt free, a chapter 13 with its cram downs and lien strips on real property can be a valuable way to put yourself in a great position to come out ahead when your chapter 13 debts are discharged.

Midland Funding is a big debt buyer and they typically buy deficiencies on cars that were repossessed, sold, or turned in. They buy the debt for 3 cents on the dollar and pay attorneys contingency fees to try to collect it. If you receive a law suit from them and they serve you, I can give you advice as it regards bankruptcy or trying to work out a settlement. Don't roll over and let them get a default judgment and collect it via wage garnishment of a lien on real property. Fight back through aggressive representation and pay them a lot less than what they claim. A deficiency is an unsecured debt and will be treated the same way in bankruptcy as any other unsecured debt. Don't let there aggressive tactics back you into a corner. Know your rights.