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.

Today was my 2nd client within two months where we have filed an emergency chapter 13 to stop a foreclosure where unsecured debt is not a problem and its simply arrears or a foreclosure on a hard money loan that has come due and cannot be paid immediately. The goal is to buy enough time for a seller in distress when the foreclosure comes before a buyer or the right market. I filed one case in San Diego a few months ago and my client who was a contractor was adamant that houses sell for more in the summer. He owed 700k on the house with 50k in arrears. The house according to zillow is worth 850k. He thinks this summer he will get 900k for it so instead of letting the bank sell it or buy it back from itself at 700k and flip it at 900 this summer, my client takes the reigns back and does it himself. We make a motion in the bankruptcy court to sell real property and as long as the creditors get paid there is no issue. He has no unsecured debt so its no issue. For people with unsecured debt, there is always an option of voluntarily dismissing the case and then closing escrow before a new foreclosure date comes up. It leaves you with your unsecured debt in that scenario but allows you to make the money that your house is potentially worth a year down the line. Chapter 13 has many options and can be a great tool. Call me if you have any questions when facing an imminent foreclosure.

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.

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.

This is a very busy time for my bankruptcy practice as many of my clients are using their tax refund to pay the bankruptcy fee that they have needed to do for a while. Having a big lump sum of cash come into your account when you have had financial issues can be a big help and rather than spending it to pay down creditors or for other personal reasons, bankruptcy might be the right decision and a good place to park that money. My fees typically start at $1000 for attorney fees for simple cases. Filing fees and pulling your credit to populate my software is $330 and the two credit counseling fees that I recommend to people and which are mandated by the bankruptcy code will end up costing you $31. So for a simple case $1367 is the total out of pocket cost for your bankruptcy. Many times people tax refunds are suffice to cover this and you can move on with your fresh start and get your financial future on track in 2012. When you are living pay check to pay check and can barely find the income to pay creditors then bankruptcy is most likely your best decision that you can make. Call my office if you are in the situation and we can discuss options to help you move forward with a chapter 7 bankruptcy.

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.

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.

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.

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.