Riverside County Bankruptcy Lawyer Blog

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.

Every few months the income numbers for bankruptcy get changed based on new figures. May 1st median incomes jumped by over $1000 dollars a year. It was around 47500 which was lower than the 48100 that we had before that. It seems median income are climbing which makes it easier for clients with higher incomes to still fall under the means test for a presumptive chapter 7 filing. For a two family household it is now $63481. and for four family households its now 82,329. Riverside County still has high employment and jobs in the palm springs, palm desert, coachella valley in general are typically service jobs and well below typical california incomes making bankruptcy a good choice for people with debt or who are being sued.

If you are above the median income do not fret that you will not qualify for chapter 7 as things such as financed vehicles, health insurance, child care, mortgage payments, taxes and other expenses can all bring down your income to show that even with a 100k dollar income that your reasonable and necessary expenses which include high mortgage and financed vehicles still leave you with little money to pay unsecured creditors at the end of each month.

To speak with a qualified bankruptcy attorney feel free to call me for a free consultation to determine if bankruptcy is right for you.

Are you receiving collection letters or threats for law suits by American Coradius International (ACI) for your second mortgage? In all likelihood, you have already lost a property to foreclosure or short sale and the 2nd mortgage is now trying to collect what is essentially an unsecured debt since the security has been lost or transferred. This is bad paper that is very hard to collect since you are in a precarious financial situation. You want to deal with this now while you have a good chance of getting a low settlement and or qualifying for bankruptcy. Once your income goes up or you are able to buy a new property, they could sue you and collect a judgement through putting a lien on your new property, getting a wage garnishment for up to 25% of your wages or levying your bank account. If you can come up with 10% then I might be able to settle these accounts. There potentially are tax consequences since you get 1099'd for forgiveness of debt. Talking with an experienced bankruptcy attorney is in your best interest as I can potentially tell you how to avoid those tax consequences through insolvency or advise you to file bankruptcy if the tax consequences are too much.

American Coradius International LLC is a collection agency based in Amherst, NY that specializes in collecting 2nd mortgages that have been foreclosed on. They are often very persistent when calling, mailing letters, and have been known to be a burden to my clients prior to filing for bankruptcy. If you have been notified by them or have been served with a summons from a law firm, your options include filing for a Chapter 7 or Chapter 13 or settling the debt with a lump sum. A second mortgage is considered an unsecured debt after a foreclosure, making it possible to settle with creditors like American Coradius International for a low percentage. I have been successful in negotiating as low as 8% of the original amount here are several examples on accounts I have worked on for clients, including one from ACI. Low percentage results are typical and very possible if you have some money set aside, and prefer to pursue this option instead of filing for bankruptcy. If you would like help or further advice on either filing or negotiating a debt with ACI call my office today to discuss your options.

Over and over I see clients that have timeshares list them and potentially they are things that could be liquidated by the trustee to pay creditors depending on how many other assets you have, but more and more trustees can't sell them so they go back to my clients. The other day in a 341 hearing, my client was asked if she had transfered any property in the last three years which she had and I knew about. She mentioned that she had a short sale on a house and that she had sold a timeshare about 8 months ago. The trustees ears perked up and he was very interested not because he wanted the proceeds which had been spent but rather because most trustees can't sell a timeshare if there life depended on it. Thats because they sell them as is on ebay and don't have the luxury that the timeshares sellers do when they lure you in and give you all these great discounts and free things on your trip which makes you feel entitled to buy a timeshare which are typically horrible investments unless you use them correctly etc. The after market retail on timeshares is horrendous. They are typically worth 10% of what you paid for it. The problem trustees have is they sell them as is and you don't know if there are unpaid dues, maintenance fee arrears etc. So when he found out she got 900 for a property in hawaii he asked how she did it and she mentioned that she used a broker and it took some time. The thing is that trustees have 120 days post 341 hearing to sell property or they have to abandon it. I've seen raw land supposed worth 40k not sold and returned to clients. I had a guy today who came in. He owns a building leased on a railroad land which he has to pay 700 a month to. He has a secured lien against it for a line of credit. The building is owned outright. He hasn't paid on the 200k note for two years and they haven't foreclosed on done any repossession on it. I think its because the building isn't that marketable and they'd have to pay the lease fees etc so its a liability for the bank to take it back. The interesting thing is if we file BK on the corporation which the building is owned by whether the trustee would be able to sell the building. Even if they did they 'd have to pay the secured lien holder first which would leave nothing to unsecured creditors and therefore is of no interest to the trustee, but I was thinking if there wasn't a loan against it that was unsecured but they tied it to the building then he'd probably end up with the property back post BK since the trustee would have a hard time selling the 11k square foot property due to the liabilities and land restricitions, code issues etc that had been grandfathered in. Sometimes BK isn't just about the law its about knowing how things really work in the trusees eyes and seeing how things play out every day. If you need advice talk to a local palm springs, palm desert Riverside county bankruptcy attorney. Its worth your while.

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

Desert Hot Springs is only the second city in the United States to seek Bankruptcy protection. They didn't pay on a lawsuit that called for them to pay 3 million dollars and decided to file bankruptcy. They were able to come out their bankruptcy by buying bonds and have restored to great financial shape. In 2001 the city had to file because a major part of the debt , approximately $6 million owed to developers and their attorneys who won a Fair Housing Act suit against the city. The city had 8 million in debts it could not pay.

If you live in desert hot springs the median income is around 25,000 dollars and below the states median income which allows people to qualify for chapter 7 bankruptcy in which you can protect at least 23,000 dollars in assets through the wild card exemption and up to 100,000 if you use the homestead exemption. Bankruptcy is not the end as the city of desert hot springs saw but a new beginning. The city is now within its budget and got a fresh start through the bankruptcy code.

Foreclosures will slow down throughout Country with recent developments but not so fast for California homeowners.

While news of foreclosures slowing down based on banks and lawyers questionable methods is great news it won't be helping Califonia homeowners as much as other states. California has non-judicial foreclosure which means that within a deed of trust there is typically a power of sale cause. After a notice of default, the owner of the property(bank) will typically sell the property at a trustee notice of sale which gives the borrower 21 days. At a trustee sale, the lender will typically bid the amount that is due plus costs if there is not a bidder. The borrower has no right of redemption and deficiency judgments maybe purused in non-judicial foreclosure. That essentially means that the lender can sue you for their loss on the property and you could get a 1099C for their loss which can sometimes have the effect of making you accountable for their loss as income for tax purposes in the following year.

The issue the banks are facing on judicial foreclosures are that people are signing afffadavits about documents that they are not familiar with and have not reviewed. The affadavits say certain facts about the case including what is owed which signer says he has personal knowledge of. They are doing this to the tune of 10,000 affadavits a month which they could clearly not have personally reviewed in order to get a summary judgment and avoid going to trial which is more expensive. They tried to streamline the machine of foreclosures and in the midst they perverted the justice system. The banks in their carelessness have shown. Foreclosure attorneys have been questioning the standing of MERS(mortgage Electronic recording system) for years and have had some success so this ruling by judges who have timely questioned banks foreclosure processes which will help homeowners. As a bankruptcy attorney it will likely not allow me to delay filing petitions so I can keep home owners in their homes longer because the trustee sales will go an as usual since lenders almost always foreclose outside of the judicial system. Many people who live in their homes for free while the bank drudges through the foreclosure process are able to put their financial houses back in order. For states with judicial foreclosure this will be a relief for homeowners who try to rebuild their savings and move on with their lives after falling off a cliff with the loss in equity that their homes went through.

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.

Don't allow a bank to foreclose on your home without first talking to a bankruptcy attorney. Foreclosure can come with huge tax consequences that could be eliminated in bankruptcy. When a mortgage is written off you can potentially get a deficiency judgment but there is also a likelihood of receiving a 1099 at the end of the year. If you are allowing a home to go into foreclosure you are probably not in a position to pay income taxes on the amount that the bank did not collect on your mortgage due to the foreclosure. The amount that the bank lost is treated as income to you and paid at your normal tax rate. This can easily double or triple your tax liability in the following year. If you surrender your house in bankruptcy there will be no tax liability.

As a riverside bankruptcy attorney I have been getting more frequent calls from people who have been trying to work with their lender in getting a loan modification. In order to qualify for a loan modification lenders often tell home owners that they cannot be caught up with their payments. Many homeowners have fallen behind on payments in hopes of getting a loan modification which often don't ever come to realization. Banks are notorious for stalling on these loan modifications, losing paperwork, having you constantly send in new pay stubs and other qualifiers when it seams like there only motive is to drag this housing crisis out. Inevitably the day comes where the lender lets the client know that there is a notice of foreclosure pending and potentially a trustee sale. Fortunately there is a solution.

Chapter 13 Bankruptcy allows people to put their late payments(arrearages) into a chapter 13 plan and pay off their late payments over a 3 to 5 year period. The filing of a chapter 13 bankruptcy will stop the foreclosure process immediately and give you time to take the full amount that you are behind on your mortgage and pay it back over either 36 or 60 payments depending if you are above or below the median income for your household size. You can also pay pennies on the dollar to your unsecured creditors and discharging all those debts once your plan is complete. In order to qualify for a chapter 13 bankruptcy you will have to have enough disposable income to pay off your arrearages over the payment plan period. This usually means having a current income that pays your average expenses and leaves you with enough money to fund the plan. Don't let a failed loan modification lead you to believe that you can't keep your house. Often times bankruptcy is a much better option and you can realize a greater benefit. You can even get rid of a second or third mortgage in bankruptcy if your house is worth less than you owe on the first. Talk to an experience riverside county bankruptcy attorney and know your options before you allow the bank to take your home.