Articles Posted in Bankruptcy

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.

Mann Bracken LLC , Professional Recovery Services Inc, Receivable Management Inc, Capital Management, Frederick J Hanna and Associates PC, Zwicker and Associates, Hemar and Rousso, are some of the debt collectors that I have had to deal with the most in terms of law suits or law debt collection activities. Zwicker and Fredrick J. Hanna, Mann Bracken are so big that they would rather pursue collection activities and work on settlements, then go to trial quickly. If coming up with a reasonable percentage is something that you can do then settling some of these accounts can be worth your while. If your debts are overwhelming then you really need to look into the bankruptcy laws and realize that most if not all of your assets can be protected.

Have you been sued by Brewer and Brewer or Goldsmith and Hulll? Collection attorneys sucha as Brewer and Brewer, Goldsmith and Hull sue on behalf of credit card companies when people are in default.They often times file numerous cases on a monthly basis and typcially firms hope that you will not answer the summons and the case will result in a default judgment. That is the easiest way for a firm to collect money on behalf of their client. By answering the case, it takes an easy case and turns it into a time consuming and potentially expensive case. If 10% of people answered the cases that some of these law firms file, they would not be able to coninue filing the volume of cases that they do as they would be inundated with actual legal work and document production, discovery requests and court dates. This does not necessarily mean by answering a case that you will win it or they will drop it altogether, but it will allow you to reach a better settlement or buy some time to see if bankruptcy might be a better alternative. If you received a complaint or summons in the mail now is the time to talk with a debt attorney who can help you determine you best way to move forward.

Zwicker and Associates is a major law firm that collects on credit card debts but I have rarely(if ever) spoke with an attorney there and they must have 500 collectors(non-attorneys). If debt settlement is an option that you are considering and you do no want to file bankruptcy to eliminate the debt, then you should be happy that Zwicker is collecting as they are pretty good about giving reasonable settlements. I frequently get settlements between 30% and 40% and have not seen them actually sue someone in a long time. Have someone negotiate for you who knows how to deal with Zwicker. There are certain times of the month when they are more willing to drop down the % that they get and when there is a bankruptcy attorney on the other end of the phone, they know the alternative to not settling. Zwicker has offices in California but they are a bigger play on the east coast and I have not seen a lot of cases filed by them so there is likely time to work out a settlement if that is an option and you can afford to pay a lump sum within a few months. If not then talking to a bankruptcy attorney is probably your best bet.

Have you been sued by Law Office of Rory Clark? Now is the time to answer the complaint or think about filing bankruptcy. Rory clark collects for Chase cards and other credit card companies by issuing a summons and hoping that you don’t answer. That allows them to get a default judgment and easily collect through a wage garnishment or a lien on real property. Answering the law suit can get you a better settlement and buy you time to make a payment. If that is not possible then you really need to consider the filing of a bankruptcy petition. I have been trying to negotiate with Chase for one of my clients recently as the sued really quickly on a debt. At first Chase legal was handling the account and they served the summons. Once I answered the case it is now being dealt with by Law office of Rory Clark but of course I am not talking with an attorney yet but only a collection agent and she wants to settle the case for essentially the same amount that Chase legal was offering. Getting discovery started will make them realize that it will cost them time and money to aggressively pursue my client and they might not have all the itemized bills and documents to prove the money owed. If they do they will still have to put someone on the stand who is familiar with the case as a witness. All this costs money so hopefully they come to see that accepting a better settlement on behalf of my client is cheaper then the current alternative they are seeking. Bankruptcy is always an option if you have been sued so whether defending a case and answering the complaint is your objective, or seeking bankruptcy relief, call a Riverside bankruptcy attorney today to understand your options.

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.

Cramming down a car in a chapter 13 is a great way to save money and also reduce your disposable monthly income so that you have a cheaper plan payment. If your car is more than 910 days from when you financed it, then you can pay what the car is currently worth on kelly’s blue book or your opinion based on damage etc. Chapter 13 will allow you to pay it off over 5 years instead of the time that you have left which can really lower your payments. It will also help you with reducing disposable monthly income because if you have a financed car then you get a deduction of 496 dollars minus what your car payment is divided over 60 months or 36 months if you are below the median income for your family size. If you own your car outright the ownership expense is much less so it actually helps to keep a financed car through a chapter 13. Chapter 7 allows you to keep your car and continue to make finance payments but you can’t bring it down to current market value.

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.

1277800997h0y8zD.jpgPersonal 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.

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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.

Frequently Asked Questions: Debt Consolidation in California
How does debt consolidation affect credit scores?

Initially, it might cause a slight dip due to credit inquiries. However, consistent payments can improve your credit score over time.

What is the difference between debt consolidation and debt settlement?

Debt consolidation involves taking a new loan to pay off debts, while debt settlement is negotiating to pay less than you owe. Settlement can negatively impact your credit score.

What are secured vs. unsecured debt consolidation loans?

Secured loans require collateral (like a house or car), usually with lower interest rates. Unsecured loans don't require collateral but typically have higher rates.

Is debt consolidation right for me?

It depends on your total debt, interest rates, credit score, and payment capability. It's suitable if you can pay off your debt within five years and secure a lower interest rate than your current debts.

Should I consider long-term financial planning?

Yes, debt consolidation should be part of a broader financial strategy including budgeting, cutting expenses, and building an emergency fund.

How do Chapter 7 and Chapter 13 bankruptcies in California differ?

Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows debt restructuring over a set period, usually three to five years.

Can my spouse's bank account be garnished for my debt?

Bankruptcy laws offer protections against such actions, but specifics depend on individual cases and state laws.

How can I learn more about my options?

Consulting a California bankruptcy attorney can provide clarity. Firms like The Law Offices of Christopher Hewitt offer free consultations to explore debt relief paths.

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