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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.

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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.

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Today is memorial day and a day to reflect on how people in uniform give back to our country by facing the ultimate sacrifice. Being a bankruptcy attorney in the coachella valley I have assisted many clients who serve in the 29 Palms area. I always take there cases for the cheapest that I will do any bankruptcy for which leaves me very little if any profit after you take all of my expenses into consideration. That charge is $1000 dollars for attorney fees. I am always amazed that the people who are willing to go to war and move there families all over the country are paid a low as they are and yet still come into the army many time with car repossessions and other debt problems. I recently had a client that makes a net pay $1500 a month but spends close to 900 to service an unsecured debt load. He had a wife and a child as well. Fortunately for him he only had to not pay his creditors for a month and he had my fee taken care of. Some people who have called me talk to their superior officers who tell them that bankruptcy can have potential clearance and security issues in their future and seem to try to dissuade them from a law that is here to benefit all citizens.

To me its not fathomable to try to keep someone living in poverty over mistakes they have made in the past or just the effects of the economy which have seen people left with bad 2nd mortgages after foreclosure or job loss leading to not being able to make good on car financing contracts etc. In my experience I have filed bankruptcy for managers of city’s, heads of police departments, multi-million dollar business creators. They have all used the bankruptcy code to their benefit so to see people in uniform dissuaded from using bankruptcy is something that I don’t agree with. If you are military and stationed in Twenty-nine palms please call me for a fair evaluation of how bankruptcy can effect you. Call an experienced Riverside County Bankruptcy Attorney. You’ll be glad you did. Happy memorial day and thank you for your service.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

Contact Information
Palm Desert
74361 Hwy 111 #7
Palm Desert, CA 92260
Phone: 760-459-2438
San Clemente
209 Avenida Del Mar #206
San Clemente, CA 92672
Phone: 949-503-1304
We are a Debt Relief Agency under the United States Bankruptcy Code. We help people file for bankruptcy relief under the Bankruptcy Code.

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