Riverside County Bankruptcy Lawyer Blog

Raymond Lee sues a lot of people in southern california and in Riverside county where I typically practice. Most cases in my jurisdiction are heard in Indio and are often brought by American Express who sends a lot of there accounts to Zwicker and Associates. You have many options in how to deal with the law suit that you have recently been served but first thing you need to do is speak with a competent lawyer to examine those options. When you have been sued you have 30 days to answer or you could face a default judgment which essentially says you agree to everything and allow them to collect against you through a judgement. Remember a judgment is good for 10-20 years with a renewal and collects 10% interest plus when they win they tack on attorney fees, costs for bringing the suit etc so now is not the time to put your head in the sand. Many times I negotiate these cases down to 50% of what you owe. Sometimes we have to answer the law suit, other times I call them directly and work on a settlement prior to answering to save money. If they won't come to the right number then we answer to make them realize they are going to have to work and expend money to get potential money. This often brings them back to the negotiating table quicker. Another option that I have and they realize is that I file chapter 7 or chapter 13 bankruptcy cases which either means they get paid nothing or what you can afford over either three or five years. All of a sudden a settlement sounds good to them. Raymond Lee is located in Pasadena so sending someone out to fight this case with someone that fights them every step on the way in Indio is not cheap. This is done for clients that might not be perfectly situated to file a current bankruptcy. Sometimes filing a bankruptcy case is all about timing depending on where you income is or certain financial things that you have done too recently to filing a bankruptcy case which necessitate waiting. Filing an answer to buy time in these types of cases is critical. Also, sometimes bankruptcy isn't necessary depending on how old other debt that you have is, if you are about to meet the statute of limitations on your other debt and make above the median income, filing a 13 might not make sense so answering and negotiating becomes advantageous. If you have debt and have been served and wonder your options, call a knowledgeable riverside county bankruptcy attorney who looks at things from all angles before sending you down a one road solution.

When looking at whether you qualify for bankruptcy as a chapter 7 or chapter 13 the size of your household makes a big difference. Chapter 7 allows you to not pay any money back to creditors whereas chapter 13 requires that you do a payment plan that last either 3 or 5 years depending on whether you are above or below the median income. In the central district of california which is the local bankruptcy court for Riverside, San Bernadino County and Los Angeles County, the trustees seem to use a heads on bed approach as opposed to traditional family or what your dependents that you claim on your tax return says. Sometimes there are children that live between to households which can benefit you if you can include them in your bankruptcy even though your spouse claims them on the previous year tax returns and things like that.

In Palm Springs, many of my clients are gay which allow me to find creative ways to qualify people for bankruptcy and determining whether to include a partner or not. Some people are domestic partners, married, or just living together which all have different and varying consequences and allow me to creatively think about how to get the best result. Because bankruptcy is federal most trustees only require federal tax returns which can be helpful to gay couple that are married and file joint returns in California but as single under federal taxes since the federal government does not recognize gay marriage. This can make a big difference in qualifying for chapter 7 since an individual income can be up to 48k a year but when you are a family of two its 62k. By treating to people as single it allows the household unit to make up to 96k which can be a huge benefit.

If you are thinking about bankruptcy and have debt problems and live in Riverside County, talk with a bankruptcy lawyer who deals with our local trustees and knows the in and outs of the bankruptcy court before walking down that path without counsel.

When you have assets that are above the amounts that the california exemptions in chapter 7 are able to protect, it puts property that you have in potential risk of being liquidated. Something that most people don't understand though is that you have the option to buy it back from the trustee typically at a discounted rate before the trustee puts it on the market. That is what an equity buy back is. In general for most of my bankruptcy clients this is extremely rare because California has extremely generous exemptions which typically allow most debtors to protect all there assets. There are two exemption models that you can use which are known as the 703 or 704 exemptions. 704 exemptions are for people with a lot of equity in there house(not so many in riverside county). Typically for people who have no refinanced in the last 15 years and are older. Most married couples can protect 100k in equity in there home so if your house is worth 300k and you owe 200k your equity interest would be exempt. If you are 55 or older with a certain income you can get 125k in equity and 65 or older can be up to 175k in equity. Since most clients of mine do not have equity we use the 703 exemptions which give you $3500 for a car, 1400 for jewelry, 23,000 as a wildcard which you can use however you want. So if your car is worth 10k and you don't have a secured creditor through financing then you would have to borrow 6500 from the wildcard which would still leave you with 17k to use how you wish. When you go over the wildcard then the trustee will ask if you want to buy back what he could liquidate to pay your creditors. For example I had a client who owned a 30k dollar car, had an IRA for 100k, jewelry of $1000 and 10k worth of household goods. In this situation the IRA/401k etc is protected 100%. The jewelry is protected up to 1400 so its protected 100%. The household goods are in general protected so no issue. The wildcard and the car exemption equal about 27k so the trustee could send me a letter if they are interested in 3000 dollars and let me know that we need to pay 3000 or else he will sell the car and pay my client 27k and have 3k to pay creditors. For that small of an amount the trustee typically wouldn't do it as its to much of a pain to administer an estate that small and buy the time he paid auctioneer fees, fees to pick up and store the car etc there truly would be nothing to distribute to creditors. If its closer to 10k then the letter will come for sure. If someone did not want to lose that 10k then they could file a chapter 13 and they would have to pay at least 10k back to creditors over 5 years. If that is your only reason however to file a 13 my typical suggestion would be to do a 7 and pay the 10k over 1 year if they can afford it. These are the general issues in understanding what happens to debtors with more assets than typical and the option of the equity buy back. Call a riverside bankruptcy attorney if you have questions about how a liquidation analysis would unfold in your chapter 7 bankruptcy.

Almost 4000 default notices were mailed out in May 2012 making Riverside County the county with the most foreclosures in California. This is a 12% decrease from March and a lot better than last year but suggests as I know first hand, that things are getting much better and the real estate market for us locally will take more time to bounce back then people anticipate. California in general ranked number 2 in the country for for foreclosures with 39k filed. Statewide its 1- 351 houses in foreclosure. Riverside as you can see is doing much worse. I think its partly because 14% unemployment and many people who moved out to Riverside did so with jobs related to construction and other functions of the economy that have been slammed. Foreclosure can at times be something that you need to put into perspective when it comes to trying to keep a house that will not regain value for so long that its worth letting it go and saving for two years where you could likely be a house similar to yours for 10-15% more than the current market value of your house. If you have a second mortgage then bankruptcy is going to be the way to go without a doubt because a 2nd mortgage has recourse and can sue you personally for not paying it while a first once they foreclose cannot come after you for the difference(deficiency).

My point is I have situations and stories where people come in who have renters and they are getting $2300 for rent on a house that costs them 4400 for the mortgage and $500 for HOA's. Every month they are losing $2600 dollars on a house that has a 2nd that has been charged off(still collectable) and the first is owed 50k more than the house is worth. To me it makes no sense to continue to lose your money every month on a house that will not regain the 140k it would need to in order to have equity. You can buy a house 2 years after a bankruptcy. So in my analysis it would be you could save close to 30k a year by not making up the difference on the rental house and wipe out your personal liability on the 2nd mortgage. In 2 years you would have 60k saved and could go and put down that towards the same house that would have 60k in equity and no bad 2nd for less than you owed the 1st. Bankruptcy under these types of circumstances needs to be a business decision and not tied to the emotional aspect of losing a house. Thats just my two cents. If you have questions about bankruptcy, foreclosure, and your rights please contact a qualified bankruptcy attorney in Riverside County. I work in Palm Springs and Palm Desert and deal with the Riverside Bankruptcy Trustees on a daily basis. I can help guide your decision.

When it comes to a chapter 13 payment plan for my clients who are well over the median income and clearly have enough money to pay something to creditors it is clearly a balancing act between a debors attorney and the chapter 13 trustee. The means test determines what a food budget, transportation budget, etc. will be and after (mortgage) or standard rent, Health care, taxes, life insurance, financed vehicles etc are taken out that is what your chapter 13 plan will be. 401k loans are repayable as a priority creditor. You can cram down cars to current market value. You can get rid of 2nd liens that are so far upside down that your house is worth less than you owe the first. There are many benefits, but to gain them you have to be willing to pay your disposable monthly income to the trustee. There is no budget for alcohol or vacations or christmas presents but you can find ways in other parts of your budget to fit those things in. For some people 13's can be extremely easy especially if you are not a lot over the median income and you get the benefit of stripping your 2nd lien while paying 1% to your creditors. For other clients who are used to making alot of money and living the high life it can be difficult.

Many people are under the mistaken belief that you can only keep one car in bankruptcy. While the bankruptcy code in California only give you an exemption for one car at $3550 this does not mean that you can only keep one car. I have had clients with 8 cars that have filed chapter 7 and kept them all. Because california has a wildcard exemption for 23,500 its not a question of how many cars but how much value in your cars that you can exempt. Many people have financed cars with no equity in them as they owe the banks more than the cars are worth. Under that analysis you can have as many cars as you have financed as its of no value to the estate since its your equity position in the car that the trustee cares about and not the cars that are overly financed. The wildcard exemption can be pieced and parceled however you like so if you have a car worth 10k we would use the 3500 for the car exemption and the 6500 for a wildcard exemption which would still leave 17k on the wildcard. We could then exempt 2000 dollars that you have in the bank which would leave 15k on the wild card. You could have 5 cars worth 3k a piece and then that would use all the exemption amount. So you can see by my examples its not a matter of how many cars but what the values are and if we can protect everything with the wild card exemption as well as the car exemption. Call my office if you have further questions as to what you can keep in bankruptcy.

When doing google searches about Palm Springs Bankruptcy attorney's I seem to find more and more attorneys who are paying to advertise via the web in Palm Springs regarding bankruptcy service but do not live or practice in Palm Springs. Many of these law firms use virtual offices and have a paralegal show up once a week to do the intake process. I don't have any issues about taking cases out of town and actually do practice in all four federal districts doing chapter 7's in all four but 13's only in the Northern and central District, but I do recommend that if you are going to hire an attorney for something as intimate and potentially consequential as bankruptcy that you are dealing with an attorney and not a mass marketing mill that strives to take your money with little consequence to what happens with your case. Many attorney need paralegals to do the day to day work such as correspondence, drafting letters, filing cases, entering data etc. I have heard more and more from clients who have gotten their cases dismissed that there was a lack of communication between the paralegals and the attorney managing their cases which sometimes has gotten their case dismissed. I have had at least 3 cases in the last month from people in palm springs who have filed bankruptcy with attorneys who are an hour or more drive and have had communication break downs which lead to case dismissals and in one case a house which was sold at auction because an attorney didn't file an response for a motion for relief from automatic stay. Make sure that whoever you decide to use in your bankruptcy that they have your best interest at hand. There is some money to be made in bankruptcy these days with as many cases as we are seeing, but my belief is that if you want to make this a lasting practice you have to take a very individual approach with each client which I strive to do, even as I get busier. Call my office at 760-459-2438 and you will speak with me directly. I live and work in Palm Springs and plan on staying in bankruptcy for the long haul and you will see that in my personal service and attentiveness that I take on your case. Although we will get out of this recession and tough economic times, there will always be failed businesses, divorce, medical issues and the standard things that cause people to file bankruptcy. The mills will fade and the sole practitioner who is serious about bankruptcy will rise to the top and that is how I am building my practice.

The general rule in bankruptcy is that the most recent tax return needs to be turned into the trustee one week before the 341 hearings. Failing to do so can get your case dismissed or if you are lucky the trustee will give you a few days to do it and continue your case. If you comply with the tax return requirement then they will remove the continued date off calender and everything moves forward to you getting a discharge. That is if you file your 2nd credit counseling class along with the B23 certificate where you swear that you took the class and put the certificate number etc. These are some of the things that pro se(clients that represent themselves) forget to do and end up getting their cases dismissed. Looking up the local rules on the bankruptcy court website can help but the more prudent aproach in my opinion is to hire someone to do it for you. As a riverside county bankruptcy attorney I do this every day and make sure that everything is done correctly. Today I was in court for 3 cases and one one of them my client gave me a declaration that they were not required to file tax returns for the previous two years because they made under the 9k IRS limit which allow you to not file. I have dealt with this before with clients just making social security income or low income enough to not file. What I have typically done is just file a declaration claiming them exempt from returns. Today the trustee told me that I was in his opinion still required to mail the most recently filed return which was for 2008. I will do that tomorrow and the case will move forward smoothly. Even a seasoned practitioner can be challenged and he might be right. I find it hard to believe that the trustee would be interested in the income my client made three years ago as its irrelevant to the current bankruptcy case but if that is what he wants then I'll be faxing that to this office tomorrow. Typically I have my clients file tax returns before we file. I might go back to that.

The actual costs to file bankruptcy in Riverside County or anywhere for that matter is $299 for a chapter 7 and $274 for a chapter 13. There are also two classes that are now required by the bankruptcy code and some providers charge up to $50 dollars but I have found two that are reasonable and that you can do for $5 and $15 for the second class. I charge people $30 for an individual and 50 for a joint couple to pull their credit reports which then downloads all creditors into my software. Essentially then for me there are $350 dollars in fees that go out of my pocket to file a case on behalf of my clients. Most bankruptcy attorneys start the fees at $1500 for a chapter 7 and that is just for attorney fees so many are $1850 or more in order to file. I try to start around $1200 for a basic case but if its really simple and not a lot of assets to protect, financing on cars, saving a house from foreclosure etc then I've been known to charge $1000 dollars. A typical case for me is 12-15 hours of work and then I have my own cost of running a business so I'm about as reasonable as they come for a qualified bankruptcy attorney. I do all the work myself occasionally using virtual paralegals for data entry and gathering of documents when I get too busy, but I pride myself on having a personal relationship with my clients throughout the whole process. I see the type of work that the bankruptcy mills churn out and they charge as much as I do and there clients only meet there attorney for 30 minutes and then show up at the hearing. Bankruptcy work needs someone that you feel comfortable with and that answers the right questions and best protects you to help you move forward with your fresh start. I vary my prices on a sliding scale and understand what people are going through in this economy and what a personal decision this is so please call my office to find out what chapter to file or if bankruptcy is right for you.

If you are in receipt of a letter from the sheriff's office or have received a letter of intent for a wage garnishment from your employer or HR person, then the clock is ticking and bankruptcy is likely the best option. Wage garnishments have the ability to collect 25% of your wages. There have been very few bankruptcy cases that I have ever seen where the trustee payments are as high as the amount that my clients lose in wage garnishments. Sometimes if your income is below the median income then a chapter 7 can stop the garnishment and you'll pay nothing back to your creditors. If you are in a high income bracket then you'll possibly have to do a chapter 13 and pay back whatever your disposable monthly income is to creditors. We take all your reasonable and allowable expenses and see what is left over. Even or people that are making 100,000 dollars or more a year I typically get a plan payment of less than 1000 dollars a month where as with that kind of income a wage garnishment would be taking out 2000 dollars or more. Bankruptcy also offers a lot of other benefits such as the ability to strip liens, cram down financed cars to the current market value. So don't let a wage garnishment stop you in your tracks, bankruptcy can be a fluid way to reorganize and it will come with some serious benefits and get your financial life back on track and improve your credit score quicker then letting the judgments continue to come in.

More and more of my Bankruptcy clients are being sued by The Law offices of Patenaude and Felix. They are based in San Diego and have many California lawyers who sue on credit card debt. If you have been served a summons or are being sued or looking at a default judgment from this law firm then we should look at bankruptcy as a potential option or possibly trying to settle the debt if you can come up with a lump sum payment. Default judgments will allow them to collect 25% of your net income through a wage garnishment and for most people even who make a lot of money a chapter 13 plan will be much less on a monthly basis then the loss of 25% of your wages. If you are below the median income you can do a chapter 7 bankruptcy and most likely keep all your assets. Call my office to find a solution to your legal problems with Patenaude and Felix.

HELOC's or Home Equity Lines of Credit were pretty popular during the boom years and I'd put a good bet are a thing of the past for near distant future. Riverside County has lost 8 years of value in homes. I've seen many homes that are worth 50% of what is owed on a 1st mortgage. Homes that are underwater to the point that you owe more to the first then the home is worth are eligible for lien strips in Chapter 13 bankruptcy. This has been enticing enough for some clients that I have that even though their unsecured credit is minimal and typically would not fit a profile that had bankruptcy in their future, have led them to seek bankruptcy relief as a form of restructuring their mortgage. The amount of loan modifications that are being denied and peoples desire to get out of bad housing deals make bring them to the steps of the bankruptcy court. If you are in this position call a riverside bankruptcy attorney to discuss your options.

Chapter 13 bankruptcies are twice the usual amount on a monthly basis in Riverside County. I filed 3 Chapter 13's last month and was amazed at how slow the trustee's were to responding to issues in my cases. When I inquired I was told that filings are around 1000 for the month of December as opposed to the typical 500 that their office reviews. I don't know if higher income people are needing to file or more people are being enticed with the potential for discharging 2nd mortgages and HELOC loans. I know 2 of the cases that I filed the clients qualified for Chapter 7 but chose to do a 13 because of a 50k dollar HELOC loan that we could discharge through the bankruptcy with the making of minimal payments over 3 years. The chapter 13 trustees while busy are still extremely persistent in examining the cases that I have sent over. They even went to the point of calculating my clients commute mileage when I put in an expense of 650 dollars for transportation costs. They thought that 550 was more reasonable based on their commutes. I hadn't even calculated commutes and took my clients at face value and don't know costs for oil changes etc which all get wrapped up in that expense. Even with the magnifying looking eye of the Chapter 13 office for many people it is the best way to go if your house is really upside down and you want to keep it. Either paying back arrearages or getting rid of 2nd homes makes Chapter 13 a better advantage to a 7 for some clients

Bankruptcy Petition preparers are cheap but don't add value to your case.

Be wary of all the advertisments for $200 dollar bankruptcies. While a petition preparer can offer typing services and help put your assets and debts in the right places, and maybe help determine your six months of income necessary to do the means test. They cannot offer legal advise or help you with exemptions. Read this article before turning to a low cost petition preparer. As an attorney I see bankruptcy cases every day and see how the trustee's look at issues and understand how to protect all your assets and make sure that everything is included so that you get your discharge and not your case dismissed.

Failure to mention a potential asset such as an unresolved personal injury case or employment law case can make it where its subject to the trustee and property of the estate instead of exempt and yours to enjoy and protect.
Bankruptcy petition preparers can only charge $200 dollars and charging more is a crime. There are many warning signs in all the trustee meeting rooms and any money above that charged by these preparers is disgorged by the trustee for the benefit of the estate. Talk to a riverside bankruptcy attorney to know your rights and protect your assets

Filing for bankruptcy is never an easy decision but if things are starting to get better for you economically but you are still mired in debt then there is no time like the present to get bankruptcy advice from a riverside county bankruptcy attorney. The type of bankruptcy you qualify for depends on your last six months of income and once things start getting better if getting out of previous debt is still a priority, its likely you'll be in a five year plan and subject to a restricted budget. Chapter 13 offers many benefits but its nice to be able to make the decision to choose between a chapter 7 or chapter 13 and by waiting until your income goes back up, it might be a choice you won't have.