Category: Consumer Debts

Dishonest Debtors May Get Nailed in Bankruptcy

 

In Oakland bankruptcy court, creditors can object to the debtor's discharge Dishonest debtors might find that their debts are still there at the end of their case. See you in court.

Yesterday I talked about how most debtors in the Oakland bankruptcy court never even see a judge. I explained that the bankruptcy system is actually pretty automated so the bankruptcy judges don’t have to get involved most of the time. One time when the bankruptcy judges do get involved is when someone believes that the person filing for bankruptcy has been dishonest.

The Bankruptcy Code provides for a mechanism to “catch” dishonest debtors and make it so some or all of their debts don’t get wiped out. That mechanism is called objection to discharge. If someone is going to gripe about the debtor’s honesty, the griper can either object to a particular debt being wiped out, or object to all of the debts being wiped out. If the judge agrees with the griper, the debtor may find himself still owing one or more debts at the end of his case.

It’s not quite as simple as it may sound. In order to win, the griper has to file a lawsuit, called an adversary proceeding. This is done in the bankruptcy court in Oakland, the same place where the debtor filed his bankruptcy case. The adversary proceeding is connected to the debtor’s bankruptcy case and sometimes the bankruptcy case is put on hold until the adversary proceeding is resolved. The court gives the griper and the debtor time to get information from each other about the alleged dishonesty and eventually there’s a trial.

These types of adversary proceedings are pretty rare. After handling bankruptcy cases for nearly fifteen years, I can still count on one hand the number of times any of my clients have been sued for nondischargeability of a particular loan. It just doesn’t happen very often. And when it does, it’s not at all a sure thing that the griper’s going to win. I’m pretty aggressive when it comes to defending my clients from adversary proceedings. I don’t like them. I don’t like it when creditors try to beat up on my clients. I want to see my clients debt free.

If you’re worried that a creditor might grip about a particular debt that you owe, you should speak with an experienced Oakland bankruptcy attorney about your concerns. The best attorneys in Oakland will be able to give you clear and realistic answers.

Image credit: By V Smoothe (Ronald V. Dellums Federal Building) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Most Bankruptcy Filers Never Even See the Bankruptcy Judge

 

Surprise! You'll probably never see the bankruptcy judge
Surprise! No judge! At least in most cases.

It sometimes comes as a big surprise when I tell my clients what to expect in their Oakland bankruptcy case and I never even mention a judge. “What a minute! When do we explain our situation to the bankruptcy judge?” they’ll ask. “Never,” is my reply, “or at least almost never.”

Seems kind of like taking a red-eye from San Francisco to New York only to find upon landing that there was no pilot in the cockpit, doesn’t it? Why don’t debtors usually have to tell their story to the judge? The answer, I think, is pretty slick. Gives me confidence that the bankruptcy system has its priorities straight most of the time.

Bankruptcy is actually a constitutional right–or at the very least bankruptcy is discussed in the United States Constitution. The Constitution says that Congress was supposed to set up laws that provided for a uniform system of bankruptcy throughout the states. Congress did that. By setting up the laws, Congress intended to provide a way for the honest but unfortunate debtor to get out from underneath the crushing burden of debt and start over financially. And they wanted the system to work as automatically as possible.

One way they did this is to make it so that honest people who filed for bankruptcy whether in Oakland or San Francisco or San Diego or Tallahassee would be entitled to a “discharge” of their debts as long as they jumped through the right hoops and provided the right information at the right time. In other words, if you do everything you’re supposed to do in your bankruptcy case–and you’re an honest person–you are entitled to a discharge–you have a right to have your debts get wiped out.

Since that’s the case, there’s really no need for a bankruptcy judge even to get involved unless it’s absolutely necessary. And that’s the reality: you rarely see a bankruptcy judge unless something unusual pops up in your case. Nothing unusual means you’ll never even see a judge. Once the required amount of time has passed, and assuming you or your experienced bankruptcy attorney has dotted all your “i”s and crossed all your “t”s, a computer in the clerk’s office generates a discharge order, the clerk mails it out to you–and you are debt free!

Always talk with an experienced bankruptcy attorney about your options and your questions. If you’re in the Oakland area, keep in mind that there are a lot of friendly and capable bankruptcy attorneys. If you can’t come to Alameda to meet with James Pixton, give him a call and let him recommend the best bankruptcy attorney your area to help you out. His number is (510) 451-6200.

You Will Not Lose Your Retirement in Bankruptcy–Usually

 

When filing in Oakland bankruptcy court, care must be given to retirement funds so they're protected.
Investments must be in true retirement accounts to be protected in bankruptcy.

One big fear often leads to a nervous question when I first meet with clients: “Will I lose my retirement when I file for bankruptcy?” The short answer, at least in Northern California, is generally no.

The two California exemption lists (lists of what you get to keep after your case is over) both list retirement accounts. This means that your creditors cannot get at your retirement and you will still have it after your case completes.

What’s important to remember, however, if that your retirement account actually has to qualify as a genuine retirement account under federal tax law. Therefore, IRAs, union pensions, private retirement account and similar products are exempt and protected in bankruptcy.

You’ll run into problems, however, if you try to get cute when you have a retirement account and file a case in Oakland bankruptcy court. I have had clients tell me during their first visit to my office that they have a retirement account. When I ask further questions and request documentation, I’ll occasionally discover that the clients are actually talking about an investment account. When I question them on it, the response I’ve received is, “Well, yeah, we’re going to use those investments to fund our retirement!” Whoops!

This is kind of like common law marriage in California: there ain’t no such thing! Either your account qualifies under tax law as a retirement account or it isn’t a retirement account. It doesn’t matter if the client intends to use the funds as a retirement account. If the IRS don’t see it as a retirement account, it’s not a retirement account.

If you live in the Oakland area and are considering bankruptcy, you should talk with an experienced bankruptcy attorney about all aspects of your finances. Be sure to make sure you talk about how your retirement is going to be handled.

Image credit: By Fletcher6 (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons

If You Forget to List a Creditor in Chapter 7 Bankruptcy

In Chapter 7, Forgetting a Creditor Is Not the End of World.

Under the right circumstances, missing a creditor in a San Leandro bankruptcy case is not a problem.
Forgetting to list a creditor in bankruptcy is usually not as a serious as the detonation of an atomic bomb–usually.

Every once in a while, I get a frantic phone call from a former client who has just realized that she forgot to list a particular creditor when we filed a chapter 7 bankruptcy case several years before. “Is it too late to add the creditor?” she’ll ask.

There are two parts to the answer–at least in most chapter 7 bankruptcy cases filed in the Oakland bankruptcy court. The first is that, no, you can’t add the creditor; the second is that even though you can’t add the creditor, it most likely doesn’t matter and the debt has still been wiped out.

How can this be, you ask. It’s one of the wonders of the bankruptcy law as they have been interpreted by the Ninth Circuit, the court of appeals that interprets law for the West Coast states including California.

The simple version is that bankruptcy is intended to help people start over financially. The order at the end of the case called a discharge order indicates that all debts owed to creditors that can be wiped out have been wiped out. It doesn’t say anything about whether the creditors received any kind of notice of the bankruptcy because a discharge doesn’t necessarily require that the creditors receive notice.

Notice to the creditors is necessary for two big reasons. First, so the creditor can have time to object to its claim being wiped out through discharge. Second, so the creditor can have time to file a proof of claim in the case and get paid if there’s any money available to be paid out to creditors. When there is money to be paid out, there will be a deadline for creditors to make their claims. If they miss the deadline, they don’t get paid.

No Deadline in Bankruptcy Case Means No Deadline to Miss

For most regular people in most regular bankruptcy cases in the Oakland and San Leandro area, however, there are simply no assets to be paid out to creditors. What this means is that there is never a deadline for creditors to file their claims. If there’s no deadline to miss, they don’t get hurt if they don’t know about the deadline. That’s the second issue I mentioned above.

If They Can’t Object for Fraud They Likely Can’t Object

On the first issue, creditors are supposed to be notified of a bankruptcy case so they have time to object. The thing about objecting is that they can only object for certain specific reasons. One of the biggest is if they feel the debtor incurred the debt fraudulently. (For instance, they lied on their credit applications and said they were brain surgeons making $500,000 a year–and they really weren’t.) Obviously, most debt is not fraudulent debt so most creditors would have no reason and therefore no ability to object. Again, without a reason to object for fraud, the creditor really hasn’t been harmed by not being told about the bankruptcy case.

Now, lest anyone should get any funny ideas, you need to keep in mind that you are required by bankruptcy law to list all of your creditors in your bankruptcy case. You don’t get to pick and choose. You list all of them and then you sign at the bottom under penalty of perjury that you have listed all of them.

I would not want to be a debtor standing in front of a bankruptcy judge in Oakland (the location of the court for San Leandro and San Lorenzo bankruptcy cases) and explaining why I intentionally didn’t list a creditor. I really would not want to do that. This little tidbit is only for honest debtors who honestly forgot to list a creditor.

Lie in Bankruptcy Case and Go to Prison

Dishonest debtors who deliberately leave out creditors when they file their bankruptcy cases may find themselves wearing bright orange jumpsuits, eating three square meals a day on a tiny tray and learning to get along with a burly roommate named Bubba. None of my clients have been to prison yet and I intend to keep it that way. We disclose all creditors in bankruptcy cases filed by my office!

Always talk to an experienced bankruptcy attorney before you do anything in preparation for a bankruptcy case. I am confident that you won’t regret it.

Five Points for Dealing With Bill Collectors in California

This information is only for current and former clients of Pixton Bankruptcy Law. If you are not yet a client of San Leandro bankruptcy attorney James Pixton, you can call for an appointment at (510) 451-6200 x101.

After a client has hired Castro Valley bankruptcy law firm Pixton Bankruptcy Law, one of the big questions James Pixton gets is this: What can I do about the bill collectors phone calls I keep getting?

Here’s the video response from Jim Pixton:

Here’s the transcript:

I love the question, because I love the answer! Five points to keep in mind once you’ve hire Pixton Bankruptcy Law:

  1. When the phone rings and you see on the caller ID that it’s a California bill collector ANSWER IT!
  2. Tell the person on the line that you are filing a chapter 7 or a chapter 13 bankruptcy case.
  3. Tell the person that your attorney is James Pixton at Pixton Bankruptcy Law. (You will hear silence followed by chattering teeth and maybe a whimper or two.)
  4. Tell the person that James Pixton’s phone number is (510) 451-6200.
  5. Once you’re certain they’ve had time to take down that information, say very clearly, “Don’t call me anymore!” and then hang up.

At that point, the bill collectors should put a flag on your file that says “bankruptcy.” With that flag on your file, their computers will start calling my office to bother me rather than calling and bothering you. Let me know immediately if you have any further problems with any of those particular bill collectors.

What is a Homestead and What Does It Have To Do With Bankruptcy in Oakland?

Thinking of filing for bankruptcy in Oakland or nearby, but worried about what will happen to your house? When you hear the word “homestead” do you start thinking about the Ponderosa, the Cartwrights and six-shooters? Speaking of “Bonanza,” didn’t it always bother you that the same parents who produced Adam and Little Joe could also give life to Hoss–and what kind of a name is Hoss, anyway?

It turns out that the term homestead still has meaning in our modern day. Homestead is actually a legal term for property that a property owner is claiming as his residence. Under California law, residents are allowed to protect their homesteads from demands of creditors up to certain values depending on their age and the size and makeup of their family.

As of 2012, a single person can protect up to $75,000 of equity in his homestead. If we’re talking about a married couple or someone living with his minor children, they can protect $100,000 of equity in their homestead. If the homeowner is over the age of 65, he can protect up to $175,000 of equity whether he’s married or not.

There are a bunch of other rules for homesteads besides these common ones.

So if you file for bankruptcy with an Oakland bankruptcy attorney, that bankruptcy attorney will take a look at how much you owe on your house and how much your house is worth. As long as you are able to exempt (protect) all the equity in your house with one of the homestead bankruptcy exemptions, you should be fine when you file your bankruptcy case to wipe out your credit cards, some taxes, medical bills and other stuff in collections.

Since homesteads in bankruptcy can be kind of complicated, you really should talk to a bankruptcy lawyer in Oakland or nearby. There are a number of good ones, including the one who wrote this article. SmileGood luck to you with your bankruptcy plans.

Which Bankruptcy Exemptions Can You Use If You Just Moved to California?

Be careful about bankruptcy exemptions if you’ve just moved to Oakland from anywhere outside California. As I’ve explained in another post, you are allowed to protect and keep certain property. In California, the California legislature has decided on two lists that you can choose from. These lists apply whether you’re filing in Oakland, San Francisco, San Jose, Sacramento or anywhere else in the State of California. For most people who file for bankruptcy in California one or the other of these lists will allow them to protect pretty much everything that they own.

If you’ve moved from out of state in the past few years, however, you need to be careful. Under the current bankruptcy laws, we have to look at where you’ve been living for the past two to three years in order to determine if you’re entitled to use California’s exemption laws or if you have to use the laws of some other state.

Basically, the rules that determine which state’s exemptions you get to use are as follows:

1. The 730-Day Rule: Have you resided uninterrupted in the same state for the past 730 days? By the way, that’s two years (365 x 2 = 730). If the answer is yes, you use that state’s exemptions. If the answer is no, you go to the next rule, the 730 + 180-Day Rule.

2. The 730 + 180-Day Rule: Where did you reside for the greatest number of days in the 180 days preceding the 730 days prior to filing your case? How’s that for confusing? What it really means is that you look at where you lived the most between 2 and 2.5 years ago. Wherever that is, you get to use the exemptions of that state.

3. If it turns out that neither 1. nor 2. applies to your situation (i.e., you were living outside the country), you’re supposed to use the federal exemptions instead of the exemptions of a particular state. At this point, you definitely should talk to a lawyer who has a lot of bankruptcy experience so you can make sure you protect the maximum amount of property you can.

Does all of this really matter? Absolutely! The exemption lists vary a lot from state to state. California has one of the more debtor-friendly lists out there. You definitely wouldn’t want to file in California only to discover that you were not entitled to all the exemptions that would normally be available to a California resident. Again, this is why you should speak with an experienced bankruptcy lawyer.

Debt and the Elderly | Often Bankruptcy Is Not Necessary.

Often the elderly do not need bankruptcy.I have helped out a lot of senior citizens during my time as a bankruptcy attorney in Oakland. More often than not, I don’t file a bankruptcy case for them for the simple reason that they often don’t need one. Instead I help them understand that they often can simply do nothing–and that includes stopping any further payment of creditor card bills. In the United States and in California in particular, we want to protect our seniors a bit more than the younger generations. To do that, the federal and state governments have set up some very strong protections for the elderly.

Your Social Security Checks Are Protected from Your Creditors

Social security is protected from creditorsThe first is this: Social security is protected from pretty much all creditors. (The only rare exception may be the US government and in that case, there still may be options to avoid having your social security check intercepted.) This is important. No creditor, no one you owe money to, no one who is trying to collect on a bill you owe can touch your social security! It is protected. This is true for monthly social security payments you have in your bank account (up to a certain limit) and for your right to future payments of social security.

I make a big point of this because I’ve had lots of scared and beaten down seniors come to my Oakland bankruptcy office frightened out of their wits because a bill collector has been telling them that their kind of debt can’t be wiped out in a bankruptcy, or their kind of debt is fraud so it’s kept out of bankruptcy. Rubbish like that. The problem of course is that my elderly clients aren’t familiar with the law and are often susceptible to the lies of bill collectors.

By the way, California and federal law require bill collectors to be truthful in their communications with the people they are trying to collect from. Violations of federal and state fair debt collection practices laws can subject creditors to fines and punishment. Pensions and other private retirements are also protected from creditors. Keep in mind, however, that these exemptions amounts are not unlimited, so you should probably talk to a knowledgeable Oakland bankruptcy attorney before you make decision about how to deal with creditors.

If Social Security Is Protected, Bankruptcy May Not Be Necessary

So, here’s my important point: Seniors in the Oakland area who are having serious debt problems may not need to file for bankruptcy. Since creditors can’t take their pension or social security, they really can’t do anything to a senior who does not own any real estate. This folks are referred to as being “judgment proof.” In other words, even if a creditor sued and got a judgment against them, the creditor still couldn’t get anything from them. That’s very good news for the elderly and should allow them to sleep better at night.

Beware of Lying Bill Collectors | Just Because They Say It Doesn’t Mean It’s True

Seniors should talk to an attorney if they feel that bill collectors are being too aggressive.Unfortunately, unscrupulous debt collectors might continue to call and harass seniors even knowing that they can’t get anything. Their hope is to create such nuisance that the senior will make some sort of payments just so the collector will quit calling for another month. Again, this probably violates federal and state laws with regard to debt collection. But it also can cause a lot of stress for the senior.

In many cases, the elderly individual may elect to file a bankruptcy case in Oakland just to get the harassing bill collectors to stop calling. I have filed this type of case for many clients. We talk about all the issues I discuss above and I reassure them that if they do nothing, no one can take their retirement or social security. Nevertheless, for their peace of mind they elect to file a simple chapter 7 bankruptcy case and wipe out the debt once and for all. No more debt, no more phone calls.

Order a Free Book on Debt and the Elderly

I have written a book entitled Debt and the Elderly: A Guide for SF Bay Areas Seniors, Their Family Members and Caregivers. It’s available for free to Oakland-area residents who might be considering bankruptc. Just fill out the form below and I’ll send it right out to you. It will answer a lot of questions that seniors or those who care about them or for them are asking these days about debts and bill collectors.

Can I Still Wipe Out Credit Card Debt in Bankruptcy?

Yes, you can! Over the years, a lot of very bad information about bankruptcy has slithered its way into our collective brains and doesn’t seem to want to leave. One of the biggest falsehoods is that bankruptcy no longer wipes out credit card debt. This myth surfaced in a big way in 2005 when Congress passed big changes to the bankruptcy laws. There was a lot of frantic scurrying about and a lot of bankruptcy cases filed because people had it in their heads that credit cards would no longer be discharged (wiped out) in bankruptcy. That wasn’t true then it still isn’t true.

In my Oakland bankruptcy office, I would say that credit cards are one of the number one reasons my clients file for bankruptcy. They have been struggling for years to pay off credit cards with huge interest rates while at the same time trying to put food on the table and new socks and shoes on their kids’ feet. The problem of course is that when hundreds or even thousands of dollars each month goes to credit card interest instead of household expenses, Average Joe and Jane are left with little choice but to pay the basics like clothes, food, gas and insurance with the same credit cards they’re trying to pay off. As many of us know, it’s a vicious cycle.

Again, the short answer is that credit cards can be wiped out in bankruptcy here in Oakland.

A warning: just because credit cards debt can be wiped out in bankruptcy does not means that you can go out and charge up all your cards and then head into an attorney’s office to file a bankruptcy case and wipe them out without any problem. If you make major charges on cards in the months leading up to a bankruptcy filing, the credit card companies may choose to file law suits against you Oakland bankruptcy court and try to convince the court that you made all those charges without any intent to repay. This is considered a type of fraud. If the Oakland bankruptcy judge agrees with the credit card companies, the judge can declare that one or more of your debts does not get wiped out even though you filed a bankruptcy case.

If you are considering bankruptcy, you should be very careful about credit card use. You should also consider speaking with an experienced Oakland bankruptcy attorney about the charges you have already made on your cards.

Oakland-area bankruptcy attorney James Pixton is an expert at deciphering credit card issues and can give you an idea of whether you need to worry about particular accounts or charges. He can also help you come up with a game plan to decrease the likelihood that you’ll have problems if you go forward with a bankruptcy case.

To contact bankruptcy attorney James Pixton, give him a call at (510) 451-6200 x101. You can also fill out the quick form below:

Difference Between Secured Debt and Unsecured Debt and Why It Matters in Bankruptcy

This Alameda County craftsmen cottage is probably collateral for a loanThe difference between secured debt and unsecured debt is an issue that I bring up with every single one of my bankruptcy clients here in the Oakland-East Bay area. The basic difference is this: Secured debt involves collateral as well as the obligation of the person who signed the loan documents, while unsecured debt just involves the personal obligation of the person who signed up for the loan. In the United States, the collateral we’re most familiar with in consumer (non-business) situations is either a car or a house.

If you borrow money from a bank to get a new truck, the truck will be collateral for the loan.The idea is that the collateral provides an additional assurance to the lender that it will get repaid what it is owed. For instance, while a bank might hesitate to loan Average Joe $50,000 based only on Joe’s signature, that same bank might be more willing to consider lending the money when it gets to use the new Made-In-America pickup that Average Joe is going to buy with the $50,000. The pickup acts as collateral which means that if Average Joe doesn’t make the payments, the bank can repossess the pickup, sell it and then use the proceeds (the money from the sale) to pay off or at least pay down the loan.

It’s the same with a home loan. The house itself is the collateral for the loan. If the borrower fails to make payments, the bank can begin a process of selling the house called foreclosure. When the house sells in the foreclosure, the bank uses the proceeds to pay off or at least pay down the loan.

So why does this all matter in bankruptcy? Well, bankruptcy wipes out personal liability (an individual’s legal responsibility to pay) on debts, but in most cases, it doesn’t wipe out the bank’s right to go after collateral. That right to go after collateral is called a lien, a french word that means a leash. Basically the bank holds your car or your house by a leash. If you don’t pay, they grab a hold of that leash and yank the collateral out for from underneath you.

[There are, however, times when a bankruptcy can wipe out a lien as well as personal liability. One of those times is when you have a second mortgage or a line of credit on your house and the home has lost a lot of value. If the circumstances are right, you can wipe out that lien in a chapter 13. Click here to learn more.]

So for most unsecured debt, you file bankruptcy, get your discharge and your liability is wiped out forever. You’ll never have to pay on that debt again, the lender can no longer do anything to collect on it. For secured debt, while the discharge wipes out your personal liability, you will still have to decided whether you want to keep the collateral or give it up. If you want to keep it, you will have to continue making the payments. If you don’t want to keep it, you can give the collateral back to the lender that will be the end of it. Since your personal liability has been wiped out in your bankruptcy case, giving the collateral back to the lender means that the lender no longer has any power to collect on that debt from you.

When you meet with bankruptcy attorney James Pixton, one of the things he’ll discuss with you is what you want to do with loans and collateral. If you want to keep the collateral there are a few different options. Go ahead and make an appointment today. Call (510) 451-6200 or fill out the handy form below:

Richmond Bankruptcy Attorney Explains Qualifying for Chapter 13 Bankruptcy

Qualifying for Chapter 13: A skilled lawyer can help you clear all the hurdles.Chapter 13 bankruptcy is a special kind of bankruptcy. Unlike the simple and quick chapter 7, chapter 13 has a set of different and more complicated rules to go along with it. Those who file for chapter 13 often have different goals from chapter 7 filers. A home foreclosure is often in the mix, or possibly a car repossession. Sometimes a huge tax bill is looming. Chapter 13 can protect people from these kinds of creditors and can get them up to five years to catch up or repay some or all of their debts. Again, how much gets paid depends on those complicated rules. An experienced bankruptcy attorney can run the numbers for you and give you more details.

Although chapter 13 is a very versatile tool, Congress decided that they wanted to limit who was allowed to file for chapter 13. They puts some caps on the amount of debt allowed, and set out what type of persons can file. I know those caps served a purpose at some point. The problem is that with the rising cost of living and the larger debt load carried by so many people in the recession, it’s not too difficult to find yourself over the caps and disqualified from bankruptcy.

Right now, the cap for secured debt (debt with collateral like a house or a car) is about $1.08 million. The cap for unsecured debt is about $380,000. For most “consumers” (regular folks who draw a paycheck and work for someone else, these caps are usually not a problem. For small business owners, however, these numbers can cause some problems. A good bankruptcy lawyer can help you figure out if you are bumping up against those caps and might need to consider chapter 11 instead.

There are a couple things to keep in mind about the chapter 13 caps.  First, real property that is underwater might be split into a secured part and an unsecured part if the value of the property is less than the amounts of the loans against it. For instance, if you owe $600,000 on your house, but it’s only worth $420,000, the bankruptcy court might look at the debt as $420,000 of secured debt and $180,000 of unsecured debt. If you’re a small business owner and have a couple hundred thousand dollars of unsecured business debt, you could have a problem. Again, an experienced bankruptcy attorney can help you figure this out.

Another thing to understand is that “disputed” or “unliquidated” debt is not counted in the unsecured and secured totals. A disputed debt is one that you say you don’t owe. Say you’re involved in a car accident and it’s not clear who’s at fault. Even though you may have been sued by the other driver, that debt is still disputed because you may or may not owe it. Unliquidated debt is debt that you can’t readily attach an amount to right now. Even if you were clearly responsible for that car accident, you don’t know exactly how much the damages are going to be until a judge or a jury decides. That means it’s unliquidated and doesn’t count in the total for purposes of qualifying for chapter 13.

A final thing to keep in mind about chapter 13 is that the person filing for chapter 13 must be employed or have “regular income.” “Regular income” is kind of a wishy-washy term, but it is clear that “no income” is not “regular income.” So if you have no income, you won’t be able to stay in a chapter 13. With no income, chapter 7 might be a better choice or indeed the only option.

Alameda bankruptcy attorney James Pixton careful analyzes his clients’ numbers to make sure they can file the bankruptcy case that is best for them. Call (510) 451-6200 to make an appointment or email him at james@pixlaw.com.

What Documents Are Required for Filing a Bankruptcy and Why?

During the course of a bankruptcy case, explains Oakland bankruptcy attorney James Pixton, the debtors are required to disclose certain financial information. The idea is that they need to show all of their financial affairs in exchange for the federal bankruptcy court’s protection and for that all-important discharge order that comes at the end of the case.

Here is a pretty basic list of the documents you’ll have to come up with:

Your last-filed tax return. This means that if you haven’t filed since 1965, that’s the tax return you’re going to have to come up with. If you haven’t filed a tax return in a while, you will definitely want to talk with an experienced Chapter 7 or Chapter 13 bankruptcy attorney about how that will affect your bankruptcy case. In Oakland bankruptcy court, you may find that the trustees are most interested in your returns for the past few years. They’re looking for assets and a non-yet-filed tax return might mean a tax refund for the trustees to pursue.

Your paystubs for the two-month period just prior to the filing of your bankruptcy case. You are supposed to provide these to the trustee in your case. The trustees are supposed to look them over although it’s not too clear to me just what they’re supposed to be looking for. My experience is that trustees do require them, but pay very little attention to them.

Monthly statements for all bank and financials account showing the balances of the accounts as of the date you filed your bankruptcy case. These documents are required for a much clearer purpose. In their quest for assets that they can get a hold and use to pay creditors, the trustees will want to see how much money you had when you filed. Sometimes, a careless debtor will file a case with a significant amount of money in the bank accounts that he is unable to protect completely. Again, this is where an experienced Oakland bankruptcy attorney like James Pixton is vital. You need to make sure that you can protect as much of your money as possible. An experienced bankruptcy attorney means fewer surprises.

Oakland bankruptcy attorney James Pixton’s phone number is (510) 451-6200 x101. He has a by-appointment-only office at 1300 Clay Street, Suite 600, Oakland, CA  94612. His main office is just a few minutes away in beautiful downtown Alameda, California (the East Bay’s best kept secret). Give him a call and come in for a visit.

How Will Bankruptcy Affect My Credit Score?

This is often one of the biggest questions looming in the minds of people who are having trouble paying their bills and are thinking about bankruptcy. It seems like everyone has an opinion–and some of them come from brain-dead idiots who have no business talking about things they don’t understand. See the links at the bottom if you want to see morons at work.

Here’s the first thing I tell people when I meet with them in my Oakland bankruptcy office: Don’t believe the horror stories you hear about the blood bath that results when credit scores collide with bankruptcy. It’s not as bad as the credit card companies would have you believe. That’s the second thing I tell them. Think about it. If everyone knew how quick and simple bankruptcy can be, more people would do it and millions (or billions) of dollars more in credit card debt would be wiped out! The credit card companies don’t want you to know that, so they continue to float boatloads of misinformation out there about bankruptcy. The longer they can keep you from bankruptcy, the more money they can continue to suck out of you even when you can’t afford it.

Here’s the simple truth about the affect of bankruptcy on your credit score:

  • Chapter 7 stays on your credit report for 10 years although it impacts your score less as time goes on.
  • Chapter 13 stays on your credit report for 7 years and its impact also lessens with time.
  • If you currently have stellar credit and file a bankruptcy case, you can expect a large drop in your score.
  • If you have had trouble paying bills and your credit score is already low, however, a bankruptcy will likely improve your score because it wipes out balances due. You go from owing lots of money to owing no money or very little money.
  • You can buy a car on credit the day after your chapter 7 is over, and you can buy a car on credit in the middle of a chapter 13 case if you need one! How’s that for surprising?
  • If you qualify in all other respects, lenders will loan you money to buy a house in as little as 2 years after filing a bankruptcy. Even more surprising?
  • Bankruptcy law prohibits discrimination in employment due to bankruptcy.
  • Although credit may be available to you after you file a bankruptcy case, it will most likely be at a higher rate of interest. That’s understandable, but it’s still less expensive than repaying all that credit card debt (that you couldn’t afford to repay anyway)!
  • The best way to improve your credit score after a bankruptcy is to pay your bill on time for the rest of your life. You plan to do that anyway, right?
  • As a practical matter, a chapter 7 bankruptcy can drop you score between 200 and 300 points.
  • According to Bankrate.com, you can rebuild to an excellent credit score (above 750) “within a few years after your bankruptcy case has been discharged.” That doesn’t sound like a bloodbath, does it?

Now, here are some practical thoughts. If you were in my office and talking to me about the effect of bankruptcy on your credit score, I might have this conversation with you:

Client: I am so worried! Won’t bankruptcy kill my credit score?

Me: Well, sure, your score will go down but it will also recover again over time.

Client: But, but…how will I survive if I can’t get credit?

Me: What do you mean when you say, “How will I survive?” Do mean will you die if you don’t have credit?

Client: No, no, no…I mean how will I get by financially if I can’t get credit?

Me: That’s a good question. I’m glad your asking it. OK, so if you had no debts at all and you needed to buy something new, how would you buy it? Would you put it on a card or would you just pay cash for it.

Client: Well, I’d just pay cash for it.

Me: So if you had no bills and you were paying cash for everything, then you really wouldn’t need credit so much, would you?

Client: No, I guess not.

Me: And I’ve already told you that you can qualify for a car loan and a home loan not too after you file, right?

Client: Yes.

Me: OK, now think about this: Right now, you have $75,000 of credit card debt (pretty typical for the San Francisco Bay Area). Do you have the ability to pay that off?

Client: No.

Me: And you want a good credit score so that banks will loan you more money that you will also be unable to repay?

Client: Oh, I see what you mean.

Me: I guess this is the big question to consider: What good does it do to have a great credit score and access to lots of additional credit if you don’t have the ability to pay off the debt you now have?

Client: I never thought about it that way! I kept thinking I needed more credit so I could borrow more. I sound like a drug addict, don’t I?

Me: No, you don’t. But I find it’s always helpful to look at credit and bankruptcy in the right way.

I suppose the final thought I have about credit and bankruptcy is this: People file for bankruptcy because they no longer have the ability to repay their debts. In other words, they file when they have no other choice. What this means is that if you are still making decisions based upon how it will impact your credit score, you may not have reached that point where you have no other choice.

If, on the other hand, you run the numbers and find that you can’t pay rent and utilities and credit card bills–and still have money left to feed the family, your credit score really no longer matters. What matters is putting food on the table and a roof over your kids’ heads. If bankruptcy will help that happen, I can help. Call me at (510) 451-6200 to make an appointment. You can also email me at james@pixlaw.com.

And now, those links I promised. Click here, here, here, or here. Idiots! All of them!

If you want to meet with Oakland bankruptcy attorney James Pixton, you can make an appointment for his office at 1300 Clay Street, Suite 600, Oakland, CA 94612. His phone number is (510) 451-6200 x101. Be aware that the Oakland is by appointment only. There is no staff there and Attorney James Pixton meets clients there only as needed. All paperwork should be sent to his PO box in Alameda, California.

Free Consumer Report Reveals Ten Dumb Things That Can Torpedo Your Bankruptcy Case

Ten Dumb Things...Before you hire a lawyer and definitely before you try to file a bankruptcy case on your own, you should request this important booklet, “Ten Dumb Things That Can Torpedo Your Bankruptcy Case in the San Francisco Bay Area.” It’s a long title, but a very short and informative booklet.

Oakland bankruptcy attorney James Pixton has written this guide to help consumers understand how careful they need to be in the months and weeks leading up to the filing of their bankruptcy case.

When it comes to bankruptcy in the Bay Area, what you don’t know as a consumer can really hurt you. If you take certain actions, you can unknowingly create a huge headache for yourself once you get a bankruptcy case number.

The bankruptcy trustees in Oakland, San Francisco and San Jose–attorneys and accountants hired by the US government to review your assets and financial situation–can in certain circumstances go after property that you have given or sold to others. In some instances, this is property that you could have protected if you had first sought the advice of an experienced bankruptcy attorney before the property changed hands.

Understanding bankruptcy law about giving away or selling property is vital to a successful bankruptcy case. Request this free guide and you’ll be on your way to a great bankruptcy experience.

Order the guide by providing your name and email address. You’ll get a link allowing you to download the guide.

[contact-form-7 id=”335″ title=”Free Torpedo Report”]

Bankruptcy Helps You Sleep Peacefully!

No More Stress or Jumping When Phone Rings!
How would it be? That is a question you could answer for yourself pretty soon. Imagine being able to buy groceries without worrying about how you’re going to make the car payment. Bankruptcy can help you! Getting school clothes for the kids and filling up the gas tank in the same trip because you now have money in your bank account at the end of the month. Bankruptcy can help you!

Paying the mortgage with a cash advance will be a thing of the past–just a bad memory after bankruptcy. Those late night arguments over the finances with your husband or wife will just end. No more ugly mess to fight about! Bankruptcy wipes it all out!

How would it be? Well, you can find out that it’s a great feeling to be back on your financial feet again. And Pixton Bankruptcy Law can help you find that feeling.

If you live in Oakland, Alameda, Hayward–or anywhere in the San Francisco Bay Area–relief is just a phone call (or email) away. (510) 451-6200 or no-debt@pixlaw.com

YOUR NEW LIFE BEGINS TODAY!

What is a Bankruptcy Trustee and What Does He Do in a Chapter 7 Case?

Bankruptcy trustees are the folks responsible for reviewing each bankruptcy case filed and finding out whether there are going to be any assets with which to pay creditors.

We file most of our cases in the bankruptcy courts in Oakland, San Francisco, and San Jose. Each of these courts has a list of about eight “panel trustees.” These trustees are usually attorneys or accountants although that is not a requirement. When we file your case, a computer randomly assigns your case to one of these trustees.

The trustee receives an electronic copy of all the documents we file in the case and his job is to look it over to determine whether you have assets that can be used to pay creditors. Now before you panic about this, keep in mind that most cases are what we call “no-asset chapter 7 cases.” A no-asset chapter 7 case is one where the trustee looks it over and concludes that there are no assets there that can be collected and used to pay creditors. If the trustee makes this determination, his job is pretty much done.

One the most important events in your bankruptcy is what is called the meeting of creditors or the 341 meeting. This is a reference to section 341 of the Bankruptcy Code. That’s the section that requires all debtors to show up at the local federal building with their attorneys on particular day and answer a short list of questions asked by the trustee. The trustee asks these questions in order to decide whether there are assets to go after. He’s already reviewed your paperwork. Now he just wants to tie up any loose ends.

This meeting with the trustee usually lasts about three to five minutes. Following the meeting, the trustee will usually file a “Report of No Assets” which means that he’s done his research and rummaging and has determined that there are no assets for him to get a hold of. At this point, the trustee usually does nothing further in your case.

So what if the trustee happens to locate an asset in your case that can be used to pay creditors? Again, this is very rare. I have been filing cases for clients for over a decade and I can probably count on one hand the number of “asset” chapter 7 cases. In all but one of those cases, we knew going in that there were assets for the trustee to liquidate. In the one case that came as a surprise, it was when the client decided not to tell me about huge tax refund he was getting. The trustee questioned him about the refund and then went after it. The lesson? Always be up front and honest with your attorney.

OK. So if there are assets, the trustee has powers from the Bankruptcy Code and the federal government that allow him to take property from debtors, sell it and use the proceeds to pay creditors. The trustee gets to keep a percentage of the proceeds and that’s how he makes his living. If the trustee gets enough to pay creditors only a small percentage of what they’re owed, then that’s all they get. If the trustee manages to rustle up enough assets to pay off all the creditors, then he does so and returns any remaining proceeds to the debtor at the end of the case.

Generally speaking, I like pretty much all the trustee’s in the San Francisco Bay Area area. They are polite, friendly and respectful of the debtors. They know you’re nervous and under a lot of stress. They try hard not to do or say anything that will hurt debtors feelings or add to their stress level. Still, keep in mind that the trustee has a job and that’s to collect assets that can go to pay creditors. If the trustee feels like you’re not being honest or forthcoming in response to his questions, you’ll see him get nasty pretty quickly. Although they’re good guys, they have a job to do and they do it efficiently. Our job as debtor and debtor’s attorney is to help him understand your financial situation. If we do that, we’ll get along with him just fine.

Chapter 7 or Chapter 13 in an Alameda Bankruptcy?

What’s with all these chapters and what do they have to do with my debts? You’ve been wondering that for years and now you’re going to get the answers straight from the hometown Alameda lawyer’s mouth.

The federal government has a set of laws called the Bankruptcy Code. The Code is divided up into chapters. For some reason, they decided to go with odd chapters only–until they got to chapter 12 (don’t ask). So we’ve got a chapter 1, a chapter 3, and so on up through chapter 13. Chapters 1 though 5 deal with the general stuff in bankruptcy that are common to all the different types of bankruptcy. Alameda residents, Oakland resident, Berkeley residents, or any Alameda County residents who file for bankruptcy are all subject to the provisions of these chapters. In fact, it’s the same set of general rules across the country.

Chapters 7, 11 and 13 are the bankruptcy chapters that talk about the different routes folks can take to eliminate or reduce their debts. For most people, a chapter 11 bankruptcy case is barely a tiny blip on the radar. I’m just mentioning it now and will only say that this chapter is usually for big companies with millions (or even billions) of dollars of debts and assets. Most people in Alameda never need to consider chapter 11.

Chapters 7 and 13 are the ones that regular people care about. Chapter 7 is considered to be just the plain, old, regular bankruptcy. We prepare your paperwork; we file; we handle things with the court, the trustee, the creditors and anyone else who needs handling; and about three months later, you get a discharge order from the judge. The discharge order means that all your debts that can be wiped out have been wiped out.

Chapter 13 is very different animal. It lasts somewhere between three years (36 months) and five years (60 months). During that your case is going, you make a monthly payment to a trustee who then makes monthly distributions to your creditors. Certain creditors, like car lenders and the IRS (of course) get paid ahead of other “lower priority” creditors. Doing the math, you can see that you’d need to make between 36 and 60 payments. At the end of the payment period, the judge issues a discharge order and sends us each a copy here in Alameda, and the rest of your debts are wiped out.

The big question of course is how much your monthly payment is going to be. That’s where Alameda bankruptcy attorney–James Pixton–works his magic. Using years of experience and a razor sharp legal mind, he calculates what bankruptcy law requires you to pay and does everything he can to see that the payments are as low as possible.

So which do you choose? Call (510) 451-6200 right now and make an appointment today with Pixton Bankruptcy Law. You’ll meet with Alameda bankruptcy attorney James A. Pixton at his quiet, cozy office on Oak Street (one street over from Park street) for a free initial meeting. He will talk in detail about the advantages and disadvantages of chapter 7 and chapter 13 and will help you decide which one is best for you.

Remember: Pixton Bankruptcy Law is the friendliest law office in Alameda! You’ll like us–and we’ll like you!

I Filed for Bankruptcy! Is My Life Over Now?

Here at Pixton Bankruptcy Law, our Alameda clients often come to our office wondering whether filing a chapter 7 or a chapter 13 will basically destroy their lives. We say with confidence that it won’t. Our clients are often surprised at how upbeat Attorney James Pixton is as he carefully explains to each client how the bankruptcy process works. He absolutely believes that bankruptcy can change his clients’ lives for the better. That’s one of the reasons why James Pixton loves being a bankruptcy lawyer! Give him a call at (510) 451-6200. Listen to his enthusiasm!

So does bankruptcy have any effect on our clients’ lives? Sure, but usually less than they think. Yes, your credit score will take a hit, but then it will start making a quick turnaround once your debts are wiped out. Bankruptcy can stay on your credit report as long a ten years, but that doesn’t mean that you have bad credit for the entire ten years. The older the bankruptcy is, the less impact it has on the score.

Attorney James Pixton keeps in touch with many of his former clients who have gone through bankruptcy. He has seen many of them buy homes only a few years after the completion of their case. Keep in mind, however, that Pixton Bankruptcy has no way to guarantee similar results for all its Alameda clients. We just want you to know what’s possible.

Call us at (510) 451-6200 for a no-cost appointment with Alameda bankruptcy attorney James Pixton. If you prefer, you can email him at james@pixlaw.com. He types pretty fast, so he’ll get right back to you.

Oh No! They’ve Repo’ed My Car!

If they repo guy took your car, we may be able to get it back if you hurry!Has your car been taken by the repo man? If it hasn’t been sold, we can get it back in most cases. By filing a chapter 13 bankruptcy with Pixton Bankruptcy Law in Alameda, you will get the immediate protection of federal bankruptcy law. This means that a lender and repo man who have repossessed your car will have to give it back and then give you time to catch up on the payments.

That sounds like a pretty good deal doesn’t it? If you call Alameda attorney James Pixton, he’ll give you the details. His number is (510) 451-6200. Did we mention that he’s the friendliest attorney in Alameda, California?

So what makes it possible to get your car back? Well, every once in a while Congress gets things right. When they built the bankruptcy laws, they put in some provisions that require car lenders to step back, leave car owners alone and let them catch up. Federal bankruptcy law is some of the most powerful law in the land–just below the US Constitution (that’s according to the Constitution). When you file for bankruptcy, you bundle yourself up in some strong rights and protections.

Here’s another thing. If you’ve owned your car for long enough, we can often eliminate thousand of dollars from the loan amount by get the bankruptcy judge to allow you to pay what it’s worth rather than what you. Call Alameda’s finest bankruptcy law firm, Pixton Bankruptcy Law and let us give you the details. Our number is (510) 451-6200. We look forward to a cheerful chat with you.

Remember! You’ve got to hurry! If the repo man has done his job and now the car’s been sold, you’re out of luck. When you call us, be sure to tell us that you’ve lost your car and want to get it back. We’ve saved the wheels of a lot of Alameda residents. Saving wheels often means savings jobs. Another reason why we at Pixton Bankruptcy Law love what we do.

Help! My House is Going to Sale! Alameda Foreclosures!

Alameda foreclosures. We can stop a home foreclosure sale in Alameda! Even if it’s right on the eve of the sale! Call Alameda bankruptcy attorney James Pixton now at (510) 451-6200 so you can set up an appointment to meet. Be sure to let us know that a sale date is coming up.

The mere mention of the word “foreclosure” sends a shudder through Alameda homeowners as though an icicle had been dropped down the back of their shirt. In the typical Alameda mind, home ownership is a symbol of success and acceptance. When we buy that house, we have arrived. Here in Alameda, like everywhere else, we take our home ownership very seriously. When that dream is threatened, it’s scary, it’s depressing and it’s stressful.

The recession throughout the United States–and here in the San Francisco Bay Area–has done enormous damage to the dream of home ownership. In Alameda County each month, hundreds of homes go into foreclosure. What this really means is that the home owner has fallen behind on his monthly mortgage payment and the lender has grown tired of waiting for late payments to come in. The lender starts foreclosure proceedings. In another article, we’ll talk about how the foreclosure process works here in Alameda–and throughout California.

If your lender has started the foreclosure process, Alameda foreclosures attorney James Pixton may be able to help you. Even if you’re right up against a sale date, Pixton Bankruptcy Law can in many instances file a bankruptcy case to stop foreclosure and get you some time to breath. Chapter 13 was designed to help Alameda homeowners catch up on their mortgage payments.

If you’re like a lot of the residents of the City of Alameda, you have a pretty hefty mortgage. It doesn’t take much to upset the apple cart. Layoffs, divorce and devastating illness are all contributing factors to foreclosure. When the money gets tights, it’s easy to fall behind on the mortgage, especially here in the East Bay.

Sometimes a homeowner no longer wants to hang onto his house. In that case, a chapter 7 might be a good move. As the busiest bankruptcy attorney in Alameda, James Pixton has the experience to quickly help you understand your options. Chapter 7 bankruptcy can get the homeowner more time to figure out how to exit the home and get into a rented home. Often a chapter 7 is necessary if there’s a second mortgage that doesn’t get paid when the house is sold.

At the Pixton Bankruptcy Law, Alameda attorney James Pixton meets personally with all potential clients to talk over the options. If foreclosure is coming up, James will help you decide whether to keep your house or let it go. James’ job is to help you understand your options and to know what your rights are.

Give Alameda foreclosures attorney James Pixton a call at his office today. (510) 451-6200. Like every other bankruptcy in the Oakland area, he offers a free half-hour appointment. At the end of your meeting, you will have a much better idea of what will work for you and what won’t. Want James does, that other attorneys don’t, however, if provide you with no-cost books and other materials to help you make important decision.

Call the Alameda office of bankruptcy attorney James Pixton soon at (510) 451-6200. Peace of mind awaits you.

Will I Lose My House or My Car if I File for Bankruptcy in Oakland?

Keeping the house or the family car is often one of the biggest concerns on the minds of our clients when they first walk through our office door in Alameda or call us on the phone to discuss bankruptcy. “Will filing for bankruptcy in Oakland leave us homeless and with no way of getting to work?” they ask anxiously.

The short answer is NO! In most cases, people do not lose their home or car just because they file for bankruptcy. They lose them if they are unable to pay for them. That happens even if you don’t file for bankruptcy. It’s the way things work here in Alameda, in Alameda County and throughout California.

Protecting a Home with Bankruptcy in Oakland. In many cases, filing a bankruptcy case can help you either catch up if you’ve fallen behind on your mortgage. In a chapter 13 case, you can get up to five years to get caught up. Chapter 13 was built by Congress to help Americans stay in their homes if they are able to continue making their payments and can catch up on arrears if given time. Many residents of Alameda are currently catching up the mortgage with a chapter 13.

In addition, a little know fact is that chapter 13 can often eliminate a second mortgage. Call Pixton Bankruptcy of Alameda today at (510) 451-6200 to schedule a no cost-no obligation consultation. We can help you decide if chapter 13 will help you save your home!

Protecting a Car in Bankruptcy. The great news is that you can keep your car in either chapter 7 or chapter 13 as long as you can afford the payments. As long as you navigate the bankruptcy system correctly, you’ll keep driving your car. Let Pixton Bankruptcy Law show you the way. Whether you live in Alameda or elsewhere, we know bankruptcy law and we can show you how to protect your car during and after the bankruptcy process.

Here’s another piece of good news: Chapter 13 can often reduce the amount you have to pay on your car. If you’ve owned your car for long enough, we can file a chapter 13 and get you into a payment plan where you pay only what the car is worth instead of what you owe on it. Often, we can save our clients thousands of dollars. Call us at (510) 451-6200 for details.