California Bankruptcy Lawyer Blog

San Francisco Bankruptcy Attorney discusses the Impact of the Obama Administration’s Plans for Mortgage Relief

Many families are eagerly awaiting further details regarding President Obama’s plan to provide foreclosure relief to nearly 9 million people. The guidelines for President Obama’s $75 billion plan are scheduled to be released in early March. The plan is intended to help consumers by offering financial incentives to lenders that will motive them to negotiate loan modifications with debtors and delay foreclosures. While loan modifications and further negotiations with lenders will help millions of debtors, it has been reported by MSNBC that only 8% of the $1 trillion in residential mortgage losses will be affected by the plan. This means that there will still be millions of people that are unable to obtain relief from foreclosure through the plan.

For those people who do not qualify or are unable to participate in the Obama relief plan, filing Chapter 7 or Chapter 13 bankruptcy may be the only option to prevent foreclosure. It is critical to contact a bankruptcy attorney as soon as you realize your home may be in jeopardy. You and your bankruptcy attorney will be able to have a real discussion about your financial situation and help you position yourself to give you the best opportunity to keep your home, regardless of whether you qualify for relief under the Obama plan.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy lawyers in San Mateo, Fremont, Sacramento and San Jose.

San Jose Bankruptcy Attorney discusses the Benefits of the Automatic Stay

If creditors are hounding you day and night you can rest assured that you are not alone. However, knowing that there are plenty of other people in your same position is a small comfort compared to the headaches and stress caused by constant harassment from your creditors.

Filing a Chapter 11 or Chapter 13 Bankruptcy may be the solution to your problems and provide your sanity with much needed relief. Upon filing your bankruptcy petition, an automatic stay will immediately go into effect which will prevent your creditors from taking further action against your property or making any more distressing phone calls. The automatic stay will be one of your best friends throughout the bankruptcy process.

In the event a creditor violates the automatic stay and continues to hound you with irksome phone calls, the Bankruptcy Code empowers you to obtain legal remedies against them. Not only may you be entitled to recover any legal fees associated with prosecuting the creditor for violating the automatic stay, you can also receive damages for the emotional distress the creditor caused you. In exceptionally serve cases, punitive damages may also be awarded against the creditor.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.

Sacramento Bankruptcy Attorney discusses the Impact of Divorce on a Bankruptcy proceeding

You’re in the middle of a divorce, and just when you think things can’t get any worse, the economy crumbles and you are forced to consider filing for bankruptcy. If you are considering filing for a Chapter 7 or a Chapter 13 bankruptcy proceeding, it is important to understand the impact filing will have on your financial obligations resulting from the divorce proceedings. A divorce generally creates two categories of financial obligations: the obligation to support your children and your former spouse; as well as the obligation created by the division of your marital property. The bankruptcy court primarily only deals with debts that you have at the time you file your petition for bankruptcy. Marital settlement agreements often create financial obligations that mature at some point in the future, which may be after the date you file for bankruptcy. If you are the higher wage-earner, filing for bankruptcy will not discharge your obligation to pay your child and spousal support obligations, but you may be able to discharge some of your financial property obligations. By the same token, if you are the spouse receiving spousal and child support and are considering bankruptcy, you are still entitled to receive payment from your former spouse. Most likely, all of your support payments would be off-limits or “exempt” from your creditors. You should also be aware that if you are going to be receiving a property settlement as a result of a divorce within 180 days of filing for bankruptcy, that your property settlement may become property of the estate.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.

San Jose Bankruptcy Lawyer Talks About the Circuit City Bankruptcy

The current recession is not just hurting the Wall Street stockbrokers. Businesses that the consumers visit on a regular basis are also being hit, hard. Well known Circuit City has been in Chapter 11 Bankruptcy since November 2008. As a reminder, the goal of a Chapter 11 Bankruptcy is to give the Debtor a chance to “reorganize’ their debt. This could be redefining the terms of the loan or finding alternative funding.

Circuit City, when it filed bankruptcy in 2008, had over $2.3 billion dollars in debt with declining sales. The top 30 unsecured creditors were owed over $600 million dollars. Therefore, Circuit City really had no easy way to reorganize a debt of that magnitude. For example, even if the top 30 creditors agreed to a 25% debt reduction of debt, that would still mean $450 million dollars was owed. Furthermore, the top 30 creditors included big named vendors such as HP, Samsung, and Sony. A reduction of Circuit City’s debt would mean each of those creditors would have to record a loss as well. How do these companies justify the loss to their shareholders just to keep Circuit City open? Therefore the reorganization of debt was both massive and complex.

Circuit City tried to find a buyer as alternative funding. A buyer could have infused capital into the company with some sort of payment arrangement on the debt. A buyer could have given the creditors hope that Circuit City would keep selling inventory so that they could pay off the debts they owed. Unfortunately, nobody was willing to purchase Circuit City in this kind of market.

The failure to find alternative funding or any realistic reorganization of the debt meant liquidation was the only option. In the Bankruptcy world, the liquidation means that Circuit City would close all of its stores. They have hired liquidation specialists who will help each store sell their inventory at a controlled pace then close the stores. The lesson to learn is that not every Chapter 11 Bankruptcy is a successful reorganization. However, Circuit City’s liquidation through the bankruptcy court was transparent enough that there was no wide scale panic by consumers or creditors. That should considered a win for the bankruptcy court.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.

Fremont Bankruptcy Attorney Talks About Celebrity Financial Woes

Ever watch those people on Extreme Makeover: Home Edition and think "they are so lucky?" Well, getting an extreme makeover does not mean their problems go away. There is quietly growing number of people who were lucky enough to get the extreme makeover finding themselves in financial troubles which may lead to foreclosure of their homes or bankruptcy. The Vardons with the blind, autistic son are having problems for a refinance they took, Sadie Holmes who ran a charity from her home office is facing foreclosure for code fines for code violations, and the Harpers faced foreclosure for defaulting on a loan (as a reminder, they also got enough money to pay property taxes for 25 years). How is this possible?

As any non-Extreme Makeover: Home Edition person can attest, one still has to live within their means. A person cannot take on more monthly debt than they can handle, even if they live in a 7,000 square foot mansion. For example, the Harper's took out a $450,000.00 loan with their house as collateral which meant a monthly payment of about $2,700.00 per month. Assuming they were not doing well in the first place (in order to qualify for Extreme Makeover: Home edition) that monthly payment easily exceeding their income after living expenses. If the monthly payments cannot be made then default and eventual foreclosure will soon arise.

Each of the now unlucky winners could file for bankruptcy relief. If done correctly, then the debtors may be to keep their homes. But if that happens, it won't be because Ty Pennington showed up to save them.

If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.