California Bankruptcy Lawyer Blog

San Jose Bankruptcy Attorney discusses another Chapter 11 Bankruptcy Success Story

Delphi Corporation, once the world’s largest auto parts manufacturer, is likely to emerge from Bankruptcy within the next few weeks. Delphi has refocused its product line to supplying powertrain components, connectors and wiring harnesses, and teamed other products and divisions.

With a large contribution from General Motors (GM) comprised of approximately $2 billion in cash and a $500 million loan, Delphi projects to be profitable within 12-18 months of emergency from Chapter 11 bankruptcy.

Utilizing the protections provided during the pendency of its bankruptcy, Delphi has been able to cut restructure its debt, dispose of underproducing plants and restructure its facilities. Delphi is expected to exit its CH 11 bankruptcy small but with a more global presence.

Delphi is another example of the benefits of restructuring through a Chapter 11 bankruptcy proceeding. Once a cash starved company teetering on the brink of collapse, Delphi now has the potential to emerge leaner and more profitable than ever before.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs. Please feel free to complete our free bankrupcty evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.

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Posted In: Bankruptcy Law , Bankruptcy Trustee , Business Formation , Chapter 11 Bankruptcy , Creditors and Debt

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Sacramento Bankruptcy Attorney discusses the Pitfalls of Pursuing Voluntary Loan Modifications

It has been predicted that there will be over 8 million foreclosures in the United States over the next four years. Thousands of people are trying to negotiate voluntary loan modifications with their lenders to prevent themselves from becoming a statistic. Unfortunately, the most recent data shows that less than 10% of the consumers who participate in voluntary loan modification programs actually receive a modified loan that results in a reduced principal loan balance. Current data also reflects that approximately 45% of strapped consumers who participate in voluntary modifications actually end up with higher monthly payments as a result of the modification. Consumers who modify their loans may also end up capitalizing their unpaid interest and fees, which get placed on the back end of the loans, and ultimately increases the consumer’s overall debt.

Even with all of the programs to incentivize lenders to make meaningful loan modifications to struggling consumers, the execution of these programs is falling short. Consumers are often given the “run around” or told to get further behind on their payments in order to receive assistance. Asking well intentioned consumers to intentionally fall behind on their payments or further damage their credit just to be given the time of day is patently unfair. Furthermore, many consumers voluntarily attempt to modify their loans for months before they are finally told that relief will not be granted. A serious restructuring of the voluntary loan modification process needs to take place in order to adequately protect consumers and provide much needed relief.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs. Please feel free to complete our free bankrupcty evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Loan Modifications

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San Jose Bankruptcy Attorney Speaks About GM Bankruptcy

Just a few months ago, Chrysler filed for Chapter 11 Bankruptcy. On Monday, June 1, 2009, General Motors (GM) followed suit. From a historical perspective, GM has been a carmaker for about 100 years and was the largest carmaker for 77 years (until last year) The stark picture today has GM with $172.8 billion in debt with only $82.3 billion in assets. The US government has already “loaned” GM about $50 billion dollars which will be mostly converted into equity into the new company that GM will become.

Under the US Bankruptcy protection, GM plans to do many of the initiatives that were always recommended but impossible due to contracts, laws, and shear audacity of the plans because the other options (if the actions were not taken) would be to liquidate the entire company. Some of the actions to be taken within the next 60-90 will be the sale of unprofitable divisions like Saturn and Hummer. One of GM’s idle plants will be retooled to make smaller and more fuel efficient cars to meet the surge in demand for a greener lifestyle. Other countries are moving forward to aid GM’s foreign divisions like Saab and Opel. These actions normally would have rocked the company headlines and, if the stock reacted negatively, could have lead to proxy fights or corporative executive terminations that may have killed the initiative.

It is unclear how the new GM will do but Bankruptcy gives GM the chance to find out. While not every business needs to be as drastic as GM, even small business owners may discover that Chapter 11 Bankruptcy can provide them with the breathing space to implement the deepest most necessary changes to make their business profitable.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs. Please feel free to complete our free bankrupcty evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney discusses the Importance of Work Life Balance

The Sagaria Law bankruptcy team attended a 2-day conference in Chicago, Illinois this past week. The theme of the conference was “Get a Life.” At first, the title seemed a bit abrasive. As bankrupcty attorneys, we are constantly striving to reach new goals and better serve our bankruptcy clients. We have massive amounts of deadlines and our actions have serious consequences for our clients. Telling us to “Get a Life” seemed a bit unfair.

However, after listening to the speakers over the course of the conference, it became exceedingly obvious that we all, in fact, do need to “Get a Life.” In any profession or career, a balance of work and personal time is critical to continued success. The speakers motivated us to streamline our processes and provided us with added tools to increase customer satisfaction and retention.

At Sagaria Law, we pride ourselves on our commitment to excellence in providing bankruptcy services to consumers, and in every area of our practice. With our new arsenal of strategies and techniques for improved customer service and greater efficiency, all of the bankruptcy attorneys and staff here believe we are on our way to “Getting a Life.”

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs. Please feel free to complete our free bankrupcty evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt , Loan Modifications

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Fremont Bankruptcy Attorney discusses GM’s historic Chapter 11 filing

Last week, General Motors (GM), once the United States largest private sector employer, filed for Chapter 11 bankruptcy. The United States government invested $30 billion to support GM through its restructuring process. The Government now owns approximately a 60% stake in the automobile company.

The goal of the Chapter 11 restructuring is to allow GM to cut its under-producing dealerships, unprofitable plants, and other dead weight liabilities. GM intends to emerge from bankruptcy leaner and with only its most profitable brands, dealerships and contracts. GM, with the assistance of the Obama Administration, has been negotiating with the United Auto Workers (UAW) union to decrease its labor costs and the high cost of its current benefits’ plan.

The GM filing comes on the heels of the Chrysler filing in April. The Chapter 11 bankruptcy filings for these two car companies will allow them to emerge stronger and more efficient to help them reclaim market-share. These bankruptcy filings should be viewed as a positive step towards the companies’ future of sustainable growth and profitability.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs. Please feel free to complete our free bankrupcty evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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Sacramento Bankruptcy Attorney discusses the Phoenix Coyotes Chapter 11 Bankruptcy Filing

The Phoenix Coyotes recently filed for Chapter 11 Bankruptcy protection much to the chagrin of the NHL. The team has accumulated approximately $73 million in debt over the past 3 years. As part of the Coyotes’ chapter 11 reorganization plan, the Coyotes’ owner Jerry Moyes has proposed selling the team to James Balsillie, the Co-CEO of Research In Motion (RIM) Ltd. Balsillie has offered to pay $212.5 million for the team, which would pay 100% of the teams secured debt and $95.5 million to unsecured creditors. However, as a condition of the sale Balsillie wants to be able to relocate the team to Ontario, Canada.

This case is interesting because, as a member of the National Hockey League, the Coyotes would normally need the permission of the NHL and the other 29 team owners to sell and relocate the team. Moyes has attempted to circumvent this process by going directly to the Bankruptcy Court and proposing that the team be sold to Balsillie. The NHL is investigating the propriety of the Coyotes’ bankruptcy filing and vigorously contesting the sale of the Coyotes to Balsillie. Statements from the NHL have made it clear that the NHL intends to keep the team in Glendale, Arizona. The NHL intends to keep the sale of the Coyotes out the jurisdiction of the bankruptcy court and return the issues of relocation and sale to the League’s purview.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs.

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Posted In: Bankruptcy Law , Business Formation , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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San Jose Bankruptcy Attorney discusses Lien Stripping in a Chapter 11 bankruptcy or a Chapter 13 bankruptcy

Debtors filing for Chapter 11 bankruptcy or Chapter 13 bankruptcy protection have the option to avoid junior secured liens on their property if their property is underwater. For example, if a debtor’s home has a first mortgage of $100,000 and a second mortgage of $30,000 but the property is only worth $80,000, there is no equity in the home to secure the lender’s second mortgage. Bankruptcy law permits debtors to “strip off or lien strip” the $30,000 second mortgage and convert it to unsecured debt. Once the loan has been “stripped” the debtor’s property will solely be secured by its first mortgage of $100,000.

The Obama Administration proposed a plan that would give bankruptcy courts the authority to “cram down” a debtor’s first mortgage to the fair market value of the property. In the example above, since the property is only worth $80,000, the first mortgage would “cram down” from $100,000 to $80,000 to reflect the property’s current value. That proposed legislation is currently stalled in Congress, but debtors remain hopeful for future relief.

Debtors who have already filed for bankruptcy protection and had their cases discharged are not precluded from this benefit. A debtor can petition the court to reopen their bankruptcy case in order to exercise their right to bring a motion to avoid a lien.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs.

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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Fremont Bankruptcy Attorney discusses the benefits of a Chapter 11 bankruptcy filing as demonstrated by Z Gallerie

Z Gallerie, the 30 year old home furnishings chain, filed for Chapter 11 bankruptcy in April of this year. The filing allowed the company to voluntarily reorganize its operations to increase its bottomline by closing under-producing stores and relieving itself from liability on those leases. Z Gallerie also closed a distribution center to cut away additional dead weight. The company has sought the court’s approval for use of “cash collateral” to continue paying its vendors and employees during its reorganization process.

The company has not announced any additional store closings since its initial purge in March, and should be able to continue operating its remaining stores, website sales, and honor existing company programs. Z Gallerie’s revamping of its organization by disposing of poor performing stores will likely enable it to triumphantly emerge from Chapter 11 bankruptcy.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs.

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Posted In: Bankruptcy Law , Business Formation , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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San Jose Bankruptcy Attorney discusses Requirements and Restrictions for Chapter 7 and Chapter 13 Bankruptcies

If you are considering filing for Chapter 7 bankruptcy (liquidation) or Chapter 13 (repayment plan) bankruptcy protection there are a few requirements and restrictions that you should be aware of. While this is not intended to be an exhaustive list, it highlights some of the critical factors that all consumers should know.

1. Credit Counseling Requirement:

a. Prior to filing his/her petition for bankruptcy under any chapter the debtor must complete a Credit Counseling Course. The cost for these classes can range from $30.00 to $50.00 and must be completed prior to filing for bankruptcy.

2. Timing Requirement:

a. A debtor who has previously been discharged in a Chapter 7 must wait 8 years to file another Chapter 7 petition.

b. A debtor who has previously been discharged in a Chapter 13 must wait 4 years to file a subsequent Chapter 7 bankruptcy petition.

c. A debtor who has previously been discharged in a Chapter 13 bankruptcy must wait 2 years to file a subsequent Chapter 13 petition.

3. Residency Requirement:

a. A debtor must reside in a state for a period of 2 years prior to filing the bankruptcy petition to qualify for that state’s exemption laws. This law is intended to prevent people from moving to another state for the sole purpose of obtaining more favorable exemption laws.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs. Please feel free to complete our free bankrupcty evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Bankruptcy Law , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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Sacramento Bankruptcy Attorney discusses Chrysler, Vick and Cram Downs in Bankruptcy

Some creditors are balking at Chrysler’s Chapter 11 reorganization plan. They believe they would receive more in a Chapter 7 liquidation plan. In order for Chrysler’s reorganization plan to be approved by the bankruptcy court over the objections of a creditor class, the plan must “crammed down.” Meaning the bankruptcy court will have to tell the impaired classes that have refused to agree to the reorganization plan that they are out of luck. Recently, the Court refused to “cram down” Michael Vick’s reorganization plan because the Court did not believe the plan was feasible, without a guarantee that Vick would be making a high figure salary as a professional football player.

However, Vick didn’t have the backing of the U.S. Government. The Obama administration has proposed to finance Chrysler’s restructuring with $10.5 billion in loans. Canada would contribute $2.4 billion of that loan amount, but the rest would come from the taxpayers’ coffers. In addition to receiving another $10.5 billion in loans, Chrysler would also likely be relieved of its responsibility to repay the $4.0 billion loan previously made by the federal government.

The intent of the plan is to get Chrysler in and out of bankruptcy as quickly as possible. With the continued assistance of the federal government, the Court will likely approve Chrysler’s reorganization plan over the creditors’ objections.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs. Please feel free to complete our free bankrupcty evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Francisco Bankruptcy Attorney Talks About Life After Bankruptcy

One of the biggest fears by any debtor is that once bankruptcy is filed, it will lead to a life of horror. Debtors believe that if they file bankruptcy their names will carry a scarlet letter to be shunned by all reputable lenders. Debtors often believe they will be stuck going to shady characters who will charge outrageous interest rates with horrendous consequences equivalent to the fabled leg breaking stories from loan sharks if the file for bankruptcy. Aside from very good fiction, these stories are hardly ever the truth.

Most debtors feel a sense of relief and cautious optimism after the bankruptcy is completed, but it takes time. Sometimes it is hard for debtors to believe that the Bankruptcy court can wipe away tens of thousands of debt without ever speaking to the debtors. There is no “big showdown” where the creditor comes and preaches fiscal irresponsibility while pointing a finger of righteousness. The bankruptcy judge will not wave his gavel demanding to know how the debtors could let this happen. After months (sometimes years) of receiving “certified” letters demanding money with threats of lawsuits or phone calls from credit collectors who will name the debtor’s employers, friend and family as people they will call, the debtors receive a simple letter from the Bankruptcy court stating that their bankruptcy is complete and a discharge was granted. The phone calls stop and mail is just regular junk mail. Debtors have been known to call their bankruptcy lawyers repeatedly asking if there is anything else they can do to help bankruptcy, as if they wanted the nightmare to continue.

After the discharge, a very peculiar event happens. The Debtors begin to receive credit card applications. Their credit scores begin to rise. Some even start to save money. Now that the debtor does not have any more debt, they no longer have missed payments or higher than average debt. They factors would have normally lowered their credit scores are gone and, instead, they have positive events like paying their car loans on time. Credit card companies love giving bankruptcy debtors credit cards because bankruptcy cannot be filed again for another 8 years. The debtor can even purchase a new car within the first year of bankruptcy.

Bankruptcy was meant to give debtors a fresh start which is what happens. It is unfortunate that the media makes bankruptcy sound like such a scary thing. If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs.

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney Talks about the Chrysler Bankruptcy

On April 30, 2009, Chrysler’s filed for a Chapter 11 Bankruptcy. The Chrysler Bankruptcy would be a huge undertaking because the company is one of the big three automakers in the United States. To see how this bankruptcy will work, it is helpful to look at a different large bankruptcy. In late 2008 and early 2009, the Circuit City Bankruptcy rocked the retail world because it signaled the shut down a major player in products that consumers purchase on a regular basis. Circuit City filed for Chapter 11 bankruptcy which is what Chrysler would do. Under the Chapter 11 bankruptcy, Circuit City was able to continue business including selling during the holiday season and pay their employees for the work. Circuit City was given protection against creditors while it looked for a new source of capital or a buyer. Neither could be found so Circuit City had to be shut down.

In Chrysler’s case, they have Chapter 11 creditor protection while it looked for solutions to its problems. Based on reports, Chrysler had to file for Bankruptcy so that it could close the investment from Fiat of Italy. Fiat had previously been identified as a potential buyer ranging from a 20 percent to 35 percent stake in the company. Chrysler owes $6.9 billion to lenders and once a few begin collections, could cause the whole company to shut down. (A car cannot be sold unless it has all the parts, like the wheels) The Chapter 11 protections are needed because Chrysler needs to continue operating while the deals are being worked out.

The straw that broke the camel’s back and forced Chrysler into bankruptcy is being blamed on a small minority of creditors. The lenders originally wanted 65 cents to the dollar with a 40 percent equity stake in whatever company Chrysler becomes. The government wanted the lenders to get 22 cents on the dollar with 5 percent of the new company. The key note was that government came to the table with money to help finance any deals but wanted to spend as little as possible while the lenders want as much as possible. The risk for the lenders was that the deal fell apart and Chrysler was liquidated similar to Circuit City where they could receive much less than 22 cents on the dollar and only after items have been auctioned off. (One can imagine that there are few buyers of car building plants in the US) The other risk was that under Chapter 11 laws, Fiat (or any other buyer) can choose which assets to keep and which to get rid. This pits the lenders against each other as the owners marquee property can command a premium while the undesired debts are left with hats in hand asking for bail outs.

In the end, most of the major lenders agreed to the government’s proposal prior to bankruptcy but a few minority lenders held out. The final group of lenders who withheld approval were called “speculators” by President Obama. Many of the lenders were hedge funds and boutique investment funds who alleged that the big banks were yielding to the government’s proposal because of prior bailout money. Now that bankruptcy is filed, the decision as to whether Chrysler’s plan is accepted or not will lie with the Bankruptcy Judge instead of the lender’s hands.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs.

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Posted In: Bankruptcy Law , Bankruptcy Trustee , Business Formation , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Francisco Bankruptcy Attorney Discusses Loan Modifications

There are many different variations of “loan modifications” being used in the market today. The most traditional loan modification is one where the lender changes the terms of the loan to accommodate the borrower. This usually occurs when the borrower is in a financial bind and has defaulted on their loan. The borrower does not have the funds to fix the situation by paying their arrears or they cannot make their current payments due to a financial hardship. The lender then modifies the loan (which is different from a refinance) to accommodate the borrower. A loan modification is discretionary and need not be approved by the banks. The modifications can include a reduction of interest rate, decrease in principal of the loan, or adding any arrears to the principal and extending the loan. Recently, President Obama released several billions of dollars to the banks to encourage them to modify certain loans.

Alternatively, many debtors have contacted “loan modification specialists” who often advertise late at night promising substantial reductions of a mortgage. Behind the lofty promises, these specialists often work in two ways. The first is a person who will basically negotiate with your lender on your behalf. Their goal is to try and get you the best loan modification possible. These “specialists” are usually people who have very good connections with the lenders and leverage their knowledge of the industry to get you to fill out the proper forms and get the best deal they can. These “specialists” need not be attorneys. The second type of “specialist” is a person who will go through your loan documents looking for errors. When a debtor borrows money for a mortgage, there is a substantial amount of paperwork involved which requires many levels of accurate and truthful disclosures. During the past 8 years, there have been several lenders who were less than experienced which resulted in non-compliant mortgages. Any mistakes present due to the need for quick mortgages give these “specialist” a bargaining chip to force the lender into a better deal on the debtor’s mortgage. Rumors are that certain mistakes can result in hundreds of thousands of dollars of reduction in home loans. These specialists usually want money upfront and the debtor should expect that money to be non-refundable regardless of the outcome. Since the money would basically be non-refundable, the debtor should be very careful as to who they select as their specialist. Luckily for the debtor, if these specialists do not succeed, bankruptcy is still an option for them.

Generally speaking loan modifications and bankruptcy are like oil and water. The two concepts do not work well together. If a debtor is in the middle of loan modification then any subsequent bankruptcy filing will put a stop to the process until the bankruptcy is finished. Also, if a debtor is in bankruptcy, the bankruptcy court must approve any loan modifications.

A loan modification and a bankruptcy can co-exist but it requires a lot of extra paperwork and many more hoops to jump through. It is better for a debtor to actually finish one before starting another. Technically speaking, if a debtor does a loan modification and then immediately files for bankruptcy, then the debtor’s transaction may fall into the presumption of abuse. The presumption of abuse is important because if the debtor pulled out money or paid down some balance then the debtor may have to return the money or reverse the transaction. However, most lenders will not cry foul unless the debtor intends to renege on the new deal.

If you have a question regarding Bankruptcy please contact us at 1-800-941-6730 or visit www.bkanswers.com and we can connect you with one of our experienced Bankruptcy Attorneys. After you have spoken with one of our bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. 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 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your needs.

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt , Loan Modifications

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Sacramento Bankruptcy Attorney discusses when it may be appropriate for a corporation to file for Chapter 7 Bankruptcy

For individuals, filing for bankruptcy under Chapter 7 means a fresh start and a discharge of nearly all debts. Unfortunately for a corporation, a Chapter 7 bankruptcy filing does not provide the same relief because its debts will not be discharged. This means for many struggling corporations that it is in the officers and majority shareholders’ best interests to just sell the remaining assets (if any), close the doors, and walk away. However, a Chapter 7 bankruptcy can be helpful under the following circumstances:

1. If there are a significant number of assets to be liquidated, officers may want to file for a Chapter 7 bankruptcy in order to benefit from the services of a Court appointed trustee. The trustee will then be responsible for liquidating the assets and relieving the corporate officers from the burden of finding buyers and organizing sales.

2. Filing for Chapter 7 bankruptcy can also protect officers and shareholders who have personally guaranteed the corporation’s obligations, such as leases, certain types of taxes, etc., from creditors who are looking to levy or put liens against assets that could be sold to pay off debts.

3. Creditors may also try to pierce the corporate veil and name officers and/or shareholders in lawsuits to obtain payment, even though they are not personally liable to repay the corporation’s debt. If the corporation believes it is likely to be facing numerous lawsuits from litigious creditors, a Chapter 7 filing will generally protect the officers and shareholders from personal liability.

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, Roseville, San Francisco, Salinas and San Jose.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney Discusses Bankruptcy Statistics and the Economy

The current state of the economy has caused many people to turn to bankruptcies to rid themselves of debt. In March 2009 alone there have been 131,000 bankruptcies of all types filed in Bankruptcy Court. This number represents the most bankruptcies filed for any month since 2005. With every passing month, it seems that more and more people are filing. There has been a 9.2% in increase in March 2009 from February 2009. Since March last year bankruptcies rose 38% and have risen 79% from 2007. It is projected that 1.5-1.6 million people will file bankruptcy in 2009 which would exceed 2008 by 45%. The high percentage of bankruptcies comes off the heels of March's unemployment rate climbing to its highest since 1983 with 663,000 people losing their jobs. The unemployment rate is now 8.5%. Almost 1.1 million people filed for bankruptcy in 2008, 32 percent more than the 827,000 filed in 2007 and 86 percent higher than the 590,500 filings in 2006. So far this year, bankruptcy filings total 323,500.

However 2005 still holds the record for most filings from the 630,000 Americans sought bankruptcy protection in the two weeks before revisions to federal bankruptcy laws in October made it more difficult for individuals to erase debts. At this rate, more and more people who find themselves unemployed will seek the cover of bankruptcy in order to wipe out their debts and let go of their homes.

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, Roseville, San Francisco, Salinas and San Jose.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Francisco Bankruptcy Attorney Talks about Law Firm Bankruptcy

As a sign of the times, even major law firms are not immune from the dropping economy. Heller Ehrman filed for Chapter 11 Bankruptcy back in December of 2008. The interesting question is how does a law firm go into bankruptcy? For a sneak peek in the workings of a law firm, a lawyer for Heller Ehrman charges a client for each hour (or fraction thereof) that they spend working on the client’s case. The client is then billed for the work. Assuming that Heller Ehrman was collecting at a reasonable rate and managing the billable work of each attorney, it should never have gotten to a place where it owed money because its employees are retained only if they are producing positive results. (Unlike a car dealer who has to have employees even if no cars are sold).

In Heller Ehrman’s case, the problem was not the amount of work or the client’s not paying. Instead, Heller Ehrman was in a dispute with the landlord over the lease. The two parties reached a settlement agreement which needed a lump sum cash payment. The landlord recorded this agreement as an attachment to Heller Ehrman’s property which created a liability. This attachment affected Heller Ehrman’s balance sheet and caused the banks to deny Heller Ehrman credit when Heller Erhman tried to borrow the money to pay the sum. Without the money to pay the landlord, Heller Ehrman went into default and had to file bankruptcy to protect itself the landlord coming after it for more money.

The scenario above should sound extremely similar to real life people who are faced with bankruptcy now. Many people who have dutifully paid their credit card bills on time every month are suddenly receiving letters from the banks that their credit has been re-evaluated. Due to a higher credit risk (such as a new debt) the bank is cutting the credit limit or raising interest rates. The credit card user, who needed the credit to pay their money expenses, suddenly has no credit and no way to meet their bills. The users are then forced to default on payments to creditors such as the landlord, mortgage company, or utility company. The default creates more debt and restricts the user from getting more credit. The user is then forced to file for bankruptcy.

In Heller Ehrman’s case, it was possible that if the banks did not cut off Heller Ehrman’s credit, it would have paid the landlord and paid back all the money it owed. But the bank’s denial of credit forced the company into a bankruptcy that it did not want. For an individual creditor’s case, if the credit card had not denied credit then the debtor would have paid their bill and repaid the credit card holder plus all the interest. But the denial of credit forced the debtor into default which led to bankruptcy. The parallel shows that debtors, whether they are large law firms or individual debtors, often never want to be in bankruptcy. It is the arbitrary actions of creditors that force them into it.

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, Roseville, San Francisco, Salinas and San Jose.

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Posted In: Bankruptcy Law , Business Formation , Chapter 11 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney discusses a Chapter 11 Success Story

Filing for Chapter 11 bankruptcy protection is a scary scenario for debtors of all financial sizes. However, it is a worthwhile process to keep the company’s doors open and the business operation. An inspiring example of this is the rehabilitation of the Tropicana Resort & Casino on the Las Vegas Strip. In May of 2008, Tropicana Entertainment, the owner of the 51-year-old resort and casino filed for Chapter 11 bankruptcy protection. The Tropicana was able to keep its roulette wheels spinning during the restructuring process and has recently announced that it believes it will be able to emerge from bankruptcy as early as this spring.

The Tropicana appears to have been able to make the necessary changes to make it a viable entity again, less than one year after filing bankruptcy. The Chapter 11 restructuring plan is currently being reviewed by the casino’s unsecured debtors and they have until mid-April to approve the proposal. Assuming everything proceeds as planned, the Tropicana’s bankruptcy confirmation hearings are scheduled to begin on April 27, 2009.

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 bankrupcty attorneys in San Mateo, Fremont, Sacramento, Roseville, San Francisco, Salinas and San Jose.

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Posted In: Bankruptcy Law , Business Formation , Chapter 11 Bankruptcy , Creditors and Debt

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Sacramento Bankruptcy Attorney discusses Cash Collateral

While filing for Chapter 11 bankruptcy may protect your business from creditors through the Automatic Stay, debtors need to be aware that filing the petition for Chapter 11 automatically creates a bankruptcy estate. This estate includes all of the property owned by the business at the time of filing which includes cash. What debtors may not be aware of is that the cash generated by the business post-filing is also likely to be considered property of the estate. The problem with this scenario arises when the business goes to pay its monthly bills, utilities, vendors, etc. Bankruptcy Code section 363(c)(2) specifically prohibits debtors from spending cash collateral without the consent of all interested parties to the bankruptcy. That means debtors must have permission from either all of its creditors, or a court order, before it can pay any bills using cash collateral.

Unauthorized use of cash collateral can have severe consequences for debtors, including hefty monetary sanctions, as well as possible dismissal of the bankruptcy proceeding. As such, it is recommended that an Emergency Motion for use of cash collateral be filed in conjunction with the debtor’s Chapter 11 petition. The Court can then make orders “carving out” cash collateral for the business’s use to enable it to remain operational during the bankruptcy proceeding.

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, Roseville, San Francisco, Salinas and San Jose.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Lawyer Talks about Bankruptcy in Other Countries.

Bankruptcy is not a concept unique to the United States, almost every modern country has some form of bankruptcy. The laws vary from country to country and it is interesting to note the subtle differences. For example, in the United States, the US Trustee’s Office is the government’s branch to analyze and control much of the bankruptcy process, although the Federal Bankruptcy Court makes any final decisions. In Australia, the US Trustee counter part is called the Insolvency and Trustee Service Australia (ITSA). People filing bankruptcy in Australia may have certain restrictions placed on them such as a need for official permission to travel overseas.

In Canada, the US Trustee counterpart is called the Superintendent of Bankruptcy. In Canada, a debtor can, in the alternative to a bankruptcy, offer a “proposal” for paying off their debt. This sounds very similar to a chapter 13 plan except because the debtor pays a “Proposal Administrator” and the creditors are barred from taking further legal action as long as the proposal is honored.

In the United Kingdom, only individuals and partnerships can file for bankruptcy, corporations must file for a liquidation or administration. In Scotland, a bankruptcy is called a sequestration. The US Trustee counterparts are called an Official Receiver or a licensed insolvency practitioner.

In Hong Kong, a bankruptcy process starts when a creditor files a Creditor’s Bankruptcy Petition against the debtor as a means to collect a debt. A debtor would have to file a Petition against themselves to start a bankruptcy on their own. A debt can also propose an Individual Voluntary Agreement which is a negotiated payment plan to avoid a bankruptcy.

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, Roseville, San Francisco, Salinas and San Jose.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney Talks About Muzak Bankruptcy

The current recession is hitting all areas of the economy including companies that people love to hate. If the economy does not recover soon, then people may have to ride elevators without the calming string versions of their favorite rock songs because the company who makes elevator music, Muzak, filed for Chapter 11 Bankruptcy in February. The company missed a large payment of over $100 million dollars to it creditors.

Muzak was a wonder story by itself as its cash flow has doubled over the last three years which shows that demand for soothing sounds is still strong. The company also makes on hold messages systems, install sound systems, and drive through systems for retail buildings. Oddly enough, the company states that the weakening global economy was not a factor for its bankruptcy filing as it has solid cash flow and rising profits. However, Muzak has several hundreds of millions of dollars of debt due this year and the tightening credit market surely had some play because Muzak (along with most companies) will find banks reluctant to issue more credit.

As a reminder, a Chapter 11 Bankruptcy does not mean that Muzak has closed its doors but rather that it will be given time to restructure its debt. This may mean a reduction of debt or a new repayment plan. Once the debt is restructured, Muzac should emerge a leaner and more profitable company. Plus, elevator rides are extremely boring without our familiar Muzac.

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.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Creditors and Debt

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Sacramento Bankruptcy Attorney talks about Property of the Estate Acquired Post-Petition in a Chapter 11 filing

Most debtors understand that when they file a petition for bankruptcy under Chapter 11 that a new legal entity referred to as an “estate” is created, which is an entity that is separate and apart from the debtor. The “estate” is broadly defined by federal bankruptcy law to cover nearly all of the debtor’s property that he or she has an interest in at the time the petition is filed. What debtor’s who file for bankruptcy under Chapter 11 may be surprised to know is that 11 USC § 1115 provides that all property covered under 11 USC § 541 that the debtor acquires after the petition is filed and before the case is closed, dismissed, or converted to a case under chapter 7, 12, or chapter 13, is included in the property of the estate. In addition to all property acquired after the date the petition is filed, earnings from services performed by the debtor after the commencement of the case are also the property of the estate. This definition of “estate” applies to all Chapter 11bankruptcy filings effective 180 days after April 20, 2005. It is important for debtors who file Chapter 11 bankruptcy to understand that the property they acquire after filing the petition, including earned income, will most likely be considered property of the estate. Furthermore, debtors who file for bankruptcy under Chapter 11 generally must use property acquired post-petition to fund their reorganization plan, regardless of whether the property is technically considered 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 lawyers in San Mateo, Fremont, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy

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Fremont Bankruptcy Attorney discusses Student Loans in Bankruptcy

The current financial crisis has caused unemployment rates to skyrocket all over the country and bankruptcy filings have increased. The national unemployment rate is currently around 8% while California has recently reported unemployment statistics of 10.1%. That means that one in ten people in the state of California is unemployed. It also means that thousands of people with tens of thousands and sometimes even hundreds of thousands dollars in student debt are unemployed.

Under the current Bankruptcy code, educational loans are generally not dischargeable in bankruptcy. Unfortunately these rules apply regardless of whether the debt was acquired directly by the student. This means that parent borrowers are subject to the same standard and cannot obtain bankruptcy relief from the student loans incurred on behalf of their children, even though their bankruptcy proceeding may in all other aspects be completely independent of their children. However, there is a provision in the code under § 523(a)(8) which permits discharge of a student loan where the debt “would impose an undue hardship on the debtor and the debtor’s dependents.” This relief can be obtained by filing a petition with the court for undue hardship. It is ultimately up to the bankruptcy judge in each case to determine whether the debt will be discharged. However, in cases where student loans are crippling a person’s finances it can be well worth the effort.

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.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney discusses Chapter 13 Eligibility

Are you the owner of an LLC or LLP and trying to avoid the high cost of a Chapter 11 bankruptcy by filing a Chapter 13? Unfortunately you’ll have no such luck. Chapter 13 bankruptcy filings are limited to individual debtors. While LLCs and LLPs are separate “entities,” they do not meet the “individual” requirement for a Chapter 13 bankruptcy. This means that while the debtor may file for a personal bankruptcy under Chapter 13, and place his/her personal debts into a 5 year repayment plan, the debtor’s LLC or LLP must file separately under Chapter 11.

The rules are less strict for individuals who are self-employed or operate an unincorporated business. In that situation, the individual can obtain relief under Chapter 13 as long as the individual’s unsecured debts are less than the statutory limit. But again, this does not apply to partnerships and corporations.

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.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy , Creditors and Debt

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Sacramento Bankruptcy Attorney Talks About Winery Bankruptcy

The current economic climate is affecting all types of industries besides banks such as Washington Mutual or consumer electronics, such as Circuit City. Even local wineries as close as El Dorado County are feeling the effects of this down economy. MC2 Wines, which has does business under Conti Estate/Charles B. Mitchell Vineyards, filed for Chapter 11 bankruptcy in early February of this year. The Winery believes it has less than $50,000.00 in estimated assets and millions in liabilities, including multimillion dollar agricultural loans as would be expected for a winery.

As a reminder, a Chapter 11 does not automatically mean that MC2 Wines will close its doors. The Chapter 11 gives MC2 Wines a chance to reorganize its debts to create a plan to become more profitable. In this case, MC2 Wines will probably negotiate a payment plan to certain lenders, try to discount certain debts to a payoff amount, or try to find an alternative source of capital.

This is a slow and complicated process. For example, MC2 Wines obtained grapes from other wineries in order to produce different types of wine. (A common practice in the industry) Now that MC2 Wines filed for bankruptcy, it cannot afford to pay those other wineries for the grapes. The other wineries now want to halt the sale of the wines produced with their grapes because the other wineries would probably fair better if they sold the actual wine than taking a reduced amount or a long term payment plan.

If MC2 Wines is unable to come up with a plan or find alternative capital then the government will move to liquidate MC2 Wines. This would mean closing the doors on MC2 and may put the actual winery up for sale.

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.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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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.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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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.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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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.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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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.

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Posted In: Bankruptcy Law , Business Formation , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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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.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Lawyer Talks About PACER

The US Bankruptcy Court is considered a Federal Court. This is different from a State Court because the Bankruptcy Court is not controlled by State law but is controlled by Federal Law. Federal Law is the law of the nation and, generally speaking, applies for every person in the US uniformly. Of course, the United States is very large and it is an incredible challenge to track all Bankruptcy cases across the US. For example, if Joe the Debtor files for bankruptcy in his home state of Iowa but how does Wyoming know that? Well, the Federal government has utilized the power of the internet and created a internet/web based case tracking system called P.A.C.E.R.(Public Access to Court Electronic Records.)

PACER allows the public to search for cases across the nation, state, county, or district. PACER will allow people to view files that have been submitted to court, find upcoming hearings, read about the outcomes of past hearings, and apply for email notification of future actions. (some restrictions apply). The files available on PACER can be read, saved, or printed from the remote computer.

PACER is a powerful tool for information because a person does not need to go to a courthouse or hire somebody to look for information, they can do it themselves. Furthermore, PACER is available 24 hours a day/7 days a week. Therefore, people can get their information after hours or on the weekends. PACER is a strong step towards a transparent government.

However, PACER is not free. PACER does charge about $0.07 per page. Generally, a page is 54 lines of data. This includes charges to examine a docket (history of actions) of a case. Search results are billed by the page as well. PACER will usually try to collect when the user reaches $10.00 worth of transactions which can accrue very quickly if the user is doing open ended searches for names like “Smith” or “Jackson.” The government will take credit cards as a form of payment for the user’s convenience. The user can get started at pacer.psc.uscourts.gov

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 Attorneys can assist you with all aspects of your case. We have experienced bankruptcy attorneys in San Mateo, Fremont, Salinas, Sacramento and San Jose who can answer your questions about chapter 7 bankruptcy, chapter 11 bankruptcy, chapter 13 bankruptcy, lien stripping, debt, etc.

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Sacramento Bankruptcy Attorney Discusses 2005 Bankruptcy Law Revisions

On October 17, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) went into effect. This legislation was the biggest reform to the bankruptcy laws since 1978. The legislation was enacted after years of lobbying efforts by banks and lending institutions and was intended to prevent abuses of the bankruptcy laws. The changes to Chapter 7 were extensive.

The most noteworthy change brought by the 2005 BAPCPA occurred within 11 U.S.C. § 707(b). The amendments effectively subject more debtors who make above a certain income, as calculated by the Code, above the debtor’s state’s median income to an income based test. This test is referred to as the “means test.” The means test provide for a finding of abuse if the debtor’s income is higher than a specified portion of their debts. If a presumption of abuse is found under the means tests, it may only be rebutted in the case of “special circumstances.” Debtors whose income is below the state’s median income are not subject to the means test. Notably, the Code calculated income may be higher or lower than the debtor’s actual income at the time of filing for bankruptcy. This has led some commentators to refer to the bankruptcy code’s “current monthly income” as “presumed income.” If the debtor’s debts are not primarily consumer debt, then the means test is inapplicable.

Another major change to the law enacted by BAPCPA deals with eligibility. §109(h) provides that a debtor will no longer be eligible to file under either chapter 7 or chapter 13 unless within 180 days prior to filing the debtor receives an individual or group briefing from a nonprofit budge and credit counseling agency approved by the United States trustee or bankruptcy administrator. The new legislation also requires that all individual debtors in either chapter 7 or chapter 13 complete an instructional course concerning personal financial management. If a chapter 7 debtor does not complete the course, this constitutes grounds for denial of discharge.

If you have questions regarding bankruptcy and credit issues, please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have bankruptcy attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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San Jose Bankruptcy Attorney Talks About Non-Dischargeable Debts

Any person in Bankruptcy or researching bankruptcy has probably discovered that Bankruptcy is not the scary life ending event that has been portrayed in the media. In fact, they have probably discovered that Bankruptcy is a government approved way to discharge (legal term for get rid of completely) most of their debts. For example, a debtor may expect that their $50,000.00 credit card debt will be wiped away completely without any expectation to ever repay that money. Ever. Given the finality and ease of bankruptcy (if you have an attorney) it is easy to see why the creditor fuel media tries to give bankruptcy a bad image.

However, tougher new bankruptcy laws have made certain debts non-dischargeable. What that means is that certain debts will survive the bankruptcy and the Debtors will still owe them. While the list is not that extensive, a little common sense will show that these are the kind of debts that the public, as a whole, would not want a debtor to just do away with.

Some examples of non-dischargeable debts are certain taxes and fines. The government will not “reward” a person for failing to pay their income taxes because it encourages cheating the government. Debts created through fraud, false information to a creditor, or malicious injury. If a Debtor lied to get the money or meant to hurt somebody, the government will not provide that debtor with a pass for the money they received. This includes injury due to drunk driving. Alimony and child support survive a bankruptcy because that money is meant to support an exspouse or the Debtor’s children. If the Debtor did not pay the money, then the State may have to pay through welfare which is not good for anybody. Therefore no pass for the Debtor.

While the examples above make sense from a social standpoint, there are a few odd exceptions. One example is student loans. Due to skewed politics, the 2005 change in bankruptcy laws prevents the discharge of all student loans. The true oddity is that the US encourages people to go to college as a means to get ahead in life but disallow the discharge of student loans if the “getting ahead” failed. Student loans are also extremely easy to obtain as a Student does not need a job or employment history (which is needed for all other loans) but there is no relief if a student debtor who has never held a job realizes that they cannot make ends meet. Finally, Student Loans are usually acquired when a person is extremely young so they can best take advantage of the “fresh start” promise of a bankruptcy which is now denied and the Student Debtor must look forward to 30 years of bad credit, collections, or lawsuits. Isn’t college great?

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. We specialize in Chapter 7 bankruptcy, Chapter 11 bankruptcy, Chapter 13 bankruptcy, lien stripping, etc. Call today for your free consultation. We have attorneys in San Mateo, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Creditors and Debt

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San Jose Attorney Talks About Lien Stripping

Debtors that are in serious financial trouble may have or will soon have several liens placed on them. A lien is a recorded document that states that the Debtor owes the creditor a certain amount of money. Once recorded, the lien will attach to any real property owned by the Debtor in the County it was recorded. By recording this obligation, the creditor reserves the right to collect their money if the Debtors ever sells the property before the Debtor gets the money. This lien is very similar to a First Deed of Trust or Second Deed of Trust that a traditional mortgage lender might file before they loan out money.

The creation of a lien is a very powerful tool for the creditors. Specifically, this lien may survive the Debtor’s bankruptcy. This means that the Debtor may discharge the debt during bankruptcy but if the Debtor ever sells property, the lien will still be paid because it is attached to the property and not to the Debtor.

However, all is not lost to the Debtor if a lien is created. The Debtor may be able to eliminate the lien all together if they file a bankruptcy as quickly as possible. There is a small window of opportunity to remove a lien completely if certain timing conditions are met.

If the window is missed, the Debtor may be able to remove the lien from a specific piece of property through a process called Lien Stripping. Basically, to strip a lien, the Debtor will have to show the court that the real property has no equity to repay the lien after valid claims are paid. An example of a valid claim is the first mortgage which is tied directly to the property. If the property has no equity at all after the first is paid then the lien can never be paid by the Debtor and should be stripped from the property.

It may be even possible, under the right conditions, that a second mortgage can be stripped from the property. If this is possible then the Debtors may be able to absolve themselves of over $100,000.00 of debt.

If you have a question regarding lien stripping please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Fremont Bankruptcy Attorney Discusses Building Credit After Filing for Bankruptcy

In light of the credit crunch and the wave of foreclosures that have swept the country, buying a house after bankruptcy has become a lot more difficult. At the very least, lenders will generally not offer a home loan for someone who has filed bankruptcy in the last 2 years. Getting a loan after that will largely depend on the size of the down payment you can make and whether your income is verifiable. That being said, even then the loan you will qualify for will likely have high interest rates and monthly payment. This being the case, maintaining on time payments and perfect credit history after bankruptcy is extremely important. Even the slightest sign of consistently delinquent payments, overuse of credit, or having too much debt and your eligibility for a mortgage loan will be thrown into question. Unfortunately, the sub-prime mortgage crisis has made life after bankruptcy even more difficult.

If you have already filed, there is no reason to dwell on the credit impact. Instead, you should start focusing on the ways that you can start improving it. Despite what you may have heard, removing a bankruptcy from your credit is unlikely (unless of course you filed Chapter 7 more than 10 years ago and it should be off your credit report anyway). Bankruptcy is intended to give you a fresh start, but from a credit standpoint, it will take time for you to rebound.

Here are a few tips to improve your credit score after filing for bankruptcy: First, always make on time payments to your creditors. Getting the credit in order to do this may be more difficult, however, getting secured credit cards or gas cards are easy ways to get credit again after declaring. Second, don't max out your credit lines. This is a simple way for potential lenders to see if you have a problem abusing credit---if you are using the full line it is a huge warning sign that you may be a big spender. Third, don't apply for too much credit. In the same light as the above, applying for several credit cards or loans at once is a warning sign you may be abusing your credit.

If you have other questions regarding bankruptcy and credit issues, please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Sacramento Bankruptcy Attorney Discusses Chapter 13 Bankruptcy

When faced with a Chapter 11 bankruptcy or a Chapter 13 bankruptcy there are some questions that have to do with liens. Liens can be stripped off of the debtor's assets in Chapter 11 or Chapter 13 when there is not enough equity in the asset. This is determined after deducting senior liens from the property's current market value, to secure the unsecured in whole or in part, where the lien exceeds the value of the debtor's property. Section 506 of the Bankruptcy Code acknowledges that a lien is only a secured claim to the extent there is value in the asset to which it attaches. To the extent that the claim exceeds the value of the collateral, that portion of the claim is unsecured. In Chapter 11 or Chapter 13, even voluntary liens, such as mortgages and security interests, can be stripped down to the value of the collateral, with the exception of voluntary liens secured only by the debtor's residence.

Lien stripping happens a lot with vehicles where there will be a reduction of car loan liens to the present value of the car. Thus a lender holding a $12,000 claim secured by a car now worth $10,000 has a secured claim of $10,000 and a unsecured claim for $2,000. Two thousand dollars of the lien may be stripped off the car in a reorganization. The plan must provide for payment in full of the secured portion of the debt; the unsecured portion can be paid little or nothing along with other unsecured claims.

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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney Discusses Automatic Stays

When you file for bankruptcy you receive e an “Automatic Stay.” An automatic stay is an injunction where creditors have to stop trying to collect debts from you. The automatic stay is to protect and buy you time against pressing debts, while you are awaiting the finalization of your bankruptcy discharge. This means, that upon filing for bankruptcy, the automatic stay will come into effect and provide assistance to you in the following areas: Creditors can no longer harass you with non stop phone calls, creditors can no longer send you harassing letters in the mail, any foreclosures on your home will be stopped, any creditor lawsuits will be stopped, repossession on your property will be stopped, you can stop your utilities, water, gas or electric from being shut down for 20 extra days, stop any wage garnishment, child support or alimony.s
The automatic stay will remain in effect until the debtor receives a discharge or if a judge lifts the stay due to the request of a creditor.

The automatic stay can provide relief for a lot of your financial stresses. This is especially important during the time you are awaiting your bankruptcy finalization and you receive discharge. Also you have the ease of mind that anyone, like creditors, who knowingly violate the automatic stay, will be liable for damages caused by their violations.

If you or someone you know has questions about bankruptcy, please contact Sagaria Law. Our team of bankruptcy attorneys can answer any such questions you may have and assist you through the process. We represent clients from Santa Clara County, Alameda County, San Mateo County, Sacramento and surrounding areas. Contact our office today to schedule your free consultation to speak with one of our attorneys at 1-800-941-6730 or visit www.sagarialaw.com.

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Posted In: Bankruptcy Law , Chapter 7 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney Discusses New Changes In Bankruptcy Law:

Under the old bankruptcy rules, people who filed under Chapter 13 had to devote all of their disposable income to their repayment plan. The new law adds a wrinkle to this equation. Although Chapter 13 filers still have to hand over all of their disposable income, they have to calculate their disposable income using allowed expense amounts dictated by the IRS – not their actual expenses. These allowed expense amounts must be subtracted not from the filer’s actual earnings each month, but from the filer’s average income during the six months before filing.

Before you can file for bankruptcy, counseling is required, even if it’s obvious that a repayment plan isn’t feasible or you are facing debts that you find unfair and don’t want to pay. You are required only to participate, not go along with any repayment plan the agency proposes. However, if the agency does come up with a repayment plan, you will have to submit it to the court, along with a certificate showing that you completed the counseling, before you can file for bankruptcy.

Toward the end of your bankruptcy case, you will have to attend another counseling session, this time to learn personal financial management. Only after you submit proof to the court that you fulfilled this requirement can you get a bankruptcy discharge wiping out your debts.

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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy

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Sacramento Bankruptcy Attorney Discusses Chapter 13 Bankruptcy

There are many considerations and preparation when thinking about bankruptcy in terms of owning a business. Most likely, if you own a business, you will be filing a Chapter 11 bankruptcy where you will have to come up with a payment plan to pay off the debts. If you own a larger business and this constitutes a large bankruptcy, committees of creditors and stockholders typically negotiate a plan with the company to relieve the company from repaying part of its debt so that the company can try to get back on its feet. One committee that must be formed is called the "official committee of unsecured creditors." They represent all unsecured creditors, including bondholders. If the company has publicly held bonds, the "indenture trustee," often a bank hired by the company when it originally issued a bond, may sit on the committee.

Additional official committees may sometimes be appointed to represent stockholders. The U.S. Trustee may appoint another committee to represent a distinct class of creditors, such as secured creditors, employees or subordinated bondholders. After the committees work with the company to develop a plan, the court must find that it legally complies with the Bankruptcy Code before the plan can be implemented. This process is known as plan confirmation. This can take a few months or a few years.

The debtor company develops a plan with the various committees. The company or its counsel usually prepares a disclosure statement and reorganization plan and files it with the court. If it is complete (if the company is publicly held, it is reviewed by the SEC), creditors (and sometimes the stockholders) vote on the plan. The Bankruptcy Court confirms the plan, and the company carries out the plan by distributing the securities and other payments called for by the 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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy

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San Jose Bankruptcy Attorney Talks About Ability to Pay

When filing a Petition for Bankruptcy, a Debtor must pay the filing fee. This is the fee paid to the Bankruptcy Courts to process the paperwork. If all goes well, that should be the only administrative fee that a Debtor will pay. For a Chapter 7 bankruptcy, the fee is $299.00 and for a Chapter 13 bankruptcy, the fee is $274.00. But what happens if a debtor is in such dire straights that they can not even come up with the filing fee? Is that Debtor denied a bankruptcy?

The short answer is that all is not lost. A Debtor may apply to pay the filing fee in installments. The Debtor must fill out an application (available at www.caeb.uscourts.gov) to pay fees in installments (Form EDC 2-021) and submit the forms with the Petition. If approved, the Debtor will pay the filing fee over the span of 120 days. The Debtor is allowed a maximum of four installment payments. That means the debtors can take about 3 months to pay the filing fees. There is no specific minimum installation payment requirement but the Debtor cannot take more than 4 payments to pay off the entire fee amount.

The main effect on the Debtor’s bankruptcy is that the Debtor cannot pay an attorney, a bankruptcy petition preparer, or anyone else in connection with the bankruptcy, until the fees have been paid. That means a Debtor may not be able to get additional legal help if the bankruptcy petition hits a problem.

Finally, if a Debtor is filing for Chapter 7 Bankruptcy and their income is at or below 150 percent of the poverty levels based on family size without any means to pay the filing fee, the Court may grant a fee waiver. The form (Official Form 3B) must be turned in with the Petition. If denied, then the Debtor may be allowed to pay the fees over installments.

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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Creditors and Debt

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Redwood City Bankruptcy Attorney Talks About the Different Trustees

After a Debtor files for a Petition for Bankruptcy, the Debtor enters a legal world where any words, called "terms of art" are used. This is the lingo or slang that the Bankruptcy Court, bankruptcy attorneys, and everybody else in the bankruptcy world are using to describe a Bankruptcy case. Some of the common terms are Debtors, Creditors, Court, and Trustee. While Debtors and Creditors are fairly self explanatory, some of the others should be clarified. When referencing the Court, the user is referencing the Judge, the Court Staff, and the Court Clerk. Therefore when the Court makes an order, the reality is that Judge made the order. Or if the papers are filed with the Court, then the papers are probably submitted to the Court Clerk or part of the official file. Finally, if the Court will provide a translator that is probably the Court Staff setting up the logistics.

When referencing the "trustee," the Debtor should be aware that there are at least 3 different kinds of trustee. There is the Panel Trustee who has the job of administering the bankruptcy estate. (As a reminder, when a Debtor files for Bankruptcy, the government "takes over" the debtors assets which is now called the "bankruptcy estate.") The Panel Trustee is supposed to try and get as much money as possible from the bankruptcy estate to make sure that the creditors get what they can. The Panel Trustees are not paid by the Court but rather get paid from the filing fees or from a percentage of the money distributed to creditors.

The Standing Trustee is a title usually reserved for Chapter 13 and Chapter 12 bankruptcies. The Standing Trustee has the job of collecting the monthly payments from Debtors and paying out the creditors per the agreed upon repayment plan. The Standing Trustee does not get paid by the Court either but does collect a percentage of the money distributed.

Finally there is the US Trustee. These Trustee's are part of the Department of Justice and are separate from the Court. They main role is to be a watchdog in the bankruptcy proceedings. They are to monitor a bankruptcy, supervise the other trustess, and identifying fraud. In practice, the US Trustee will review all bankruptcy petitions, pleadings, and will participate in hearings if necessary. The US Trustee is the one most likely to bring a motion to dismiss a bankruptcy if they find any errors.

If you have a question regarding Trustees please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Bankruptcy Trustee

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Fremont Bankruptcy Attorney Discusses Chapter 13 Bankruptcy

A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. It the debtor’s current monthly income is less than the applicable stated median, the plan will be for three years unless the court approves a longer period “for cause.” However, if the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. During this time, the law forbids creditors from starting or continuing collection efforts.

Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 as long as the individual’s unsecured debts are less than $336,900 and secured debts are less than approximately $1 million. These amounts are adjusted periodically to reflect changes in the consumer price index. A corporation or partnership may not be a chapter 13 debtor.

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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy , Creditors and Debt

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San Jose Bankruptcy Attorney Talks About Chapter 13 Bankruptcy

There are a few different options if you are someone who is thinking about filing for bankruptcy there are a few options. If you are unable to qualify for a Chapter 7 bankruptcy, there is a chance that you will file under a Chapter 13. Chapter 13 bankruptcy is more like a payment plan option. Instead of discharging your debts, under Chapter 13, you come up with a schedule that is feasible for you regarding when and how much you will be able to pay back. The plan has to be accepted by the creditors as well. The installment payments are over three to five years. If the debtor’s current monthly income is greater than the applicable state median, the plan is usually for five years. In no case may a plan provide for payments over a period that is longer than five years. The plus to this is that during this time the law forbids creditors from starting or continuing to collect the money. Therefore, those annoying phone calls and letters hounding you to pay will cease. For many, the silence alone is peace of mind enough to file for bankruptcy.

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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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Fremont Bankruptcy Attorney Discusses Student Loans in Bankruptcy

Being a student is always an exciting and fun time in anyone’s life. However, for some, their educations serve as a financial weight that some people cannot bear. For some, they think that filing for bankruptcy will solve their problems and discharge all the debts that were accumulated during their free-wheeling school years. However, unbeknownst to them, student loans are not dischargeable in bankruptcy unless you can show that your loan payment imposes an "undue hardship" on you, your family, and your dependents. Non-dischargeable debts are those debts that you cannot totally eliminate when you file for bankruptcy and will have to be paid by you.

It is almost impossible to show an undue hardship unless you are physically unable to work and the chances of your obtaining any type of gainful employment in the future are non-existent. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, privately funded student loans are treated the same way that loans funded and guaranteed by the federal government or nonprofit institutions. Prior to the new law, if you had a loan from a private-sector lender that was not guaranteed, it could be discharged under chapter 7. The new law gives these loans the same protection as the guaranteed loans.

If you would like to discharge your student loans under the "undue hardship" exception, you must file a separate motion with the bankruptcy court and then appear before the judge to explain your hardship. This is not an easy task, so if your student loans are the main part of your debt, you would be better off not facing the harshness of bankruptcy as courts are extremely reluctant to discharge student loans.

If you have a question regarding different debts or filing 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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Sacramento Bankruptcy Attorney Discusses Chapter 11 Bankruptcy

There are many people out there who are unable to file for a Chapter 7 or a Chapter 13 bankruptcy because they own a business or corporation. Most of these people will look to a Chapter 11 in order to cope with their debts. A Chapter 11 bankruptcy is a reorganization procedure used by businesses, including sole proprietors, partnerships, and corporations. The debtor in Chapter 11 files a petition which includes a list of assets and liabilities, and a detailed statement of financial affairs. The debtor will typically act as his own trustee, called a "debtor in possession", and will remain in possession of all estate property. The court can appoint a trustee for cause shown, including mismanagement.

About one month after the filing, the debtor and his attorney attend a meeting of creditors. The debtor files monthly operating reports, showing income and disbursements, profit and loss, and a balance sheet, and pays quarterly fees to the U.S. Trustee based on the amount of money disbursed. The debtor has the exclusive right to file a plan during the first 4 months. Thereafter, creditors are permitted to file plans. The Chapter 11 plan is accompanied by a disclosure statement, which describes the debtor’s financial circumstances.

The plan places creditors holding similar types of claims into the same class. Creditors whose claims are impaired are allowed to vote on the plan. There usually needs to be a majority vote by the creditors in order for the plan to be accepted by the Court.

If you have a question regarding different debts or filing 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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy

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San Jose Bankruptcy Attorney Discusses the Chapter 7 Means Test

It is inevitable if you are considering filing bankruptcy that you will hear about the Means Test. Before the bankruptcy laws were changed, a person who wanted to file for bankruptcy could file for a Chapter 7 or Chapter 13 based on their preference. However, under the new laws, the first step in determining if you can file for Chapter 7 bankruptcy is the amount of income you make. It is a measurement of your current monthly income against the median income for a household of your size in your state. If your income is less than or equal to the median, you can file for Chapter 7 bankruptcy. If it is more than the median, however, you must pass the Means Test in order to file for Chapter 7.

The purpose of the means test is to figure out whether you have enough disposable income, after subtracting certain allowed expenses and required debt payments, to make payments on a Chapter 13 plan. To find out whether you pass the means test, you subtract certain allowed expenses and debt payments from your current monthly income. If the income that's left over after these calculations is below a certain amount, you can file for Chapter 7. IF you do not pass the Means Test, you’re unable to file for Chapter 7 bankruptcy, where your debts are discharged, and you may have to file a Chapter 13 bankruptcy where you will have to come up with a payment 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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Bankruptcy Trustee , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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Sacramento Bankruptcy Attorney Talks about Different Debt

The Bankruptcy Petition is both a scary and a confusing process. There are many forms to complete and the information in the forms come with few instructions. For example, a Debtor is asked to list their monthly “Auto” expenses but does not accurately define if the expenses must include insurance, gas, parking, and maintenance or if the expenses should be a yearly average. An extremely troublesome problem is that a Debtor is asked to classify their debts into three main groups, Secured Debt, Unsecured Debt, and Priority Debt. (There are also Administrative Debt and Consumer Debts which are treated differently and not on the regular debt forms.)

A Secured Debt is debt backed by property. The Debtor has taken money and used a piece of property to secure the debt. That means the creditor has the right to take the property to satisfy the debt if the Debtor fails to repay the loan. The two most common examples are mortgages and auto loans. In a mortgage, the lender has a secured interest in the property (usually recorded as a Deed of Trust) which allows the creditor to foreclose on the property if the Debtor fails to pay the mortgage. In the example of cars, the creditor has a security interest in the car which gives them the right to repossess the car if the Debtor fails to the pay the loan. Secured Debts can rarely be discharged in Bankruptcy without losing the property.

A Priority Debt is debt that government has recognized as special and will be paid ahead of most other debts. (Usually only second to secured debt.) There are many types of priority debts but the most common ones are taxes, wage claims by employees, alimony, child support, and debts incurred pending the bankruptcy. These debts usually cannot be discharged because the government, as a public policy, has decided that the debts need to be repaid.

An Unsecured Debt is debt that is not backed by any property except the Debtor’s promise to repay. This is usually credit card debt and personal loans. When a creditor makes these kinds of loans, the creditor knows that they are taking a risk since there is no security tied to the loan. The creditor, in turn, is allowed to charge a higher interest rate for these debts. It is usually the unsecured loans that drive a debtor to bankruptcy because 25% interest is too high for any reasonable debtor to hope to repay.

The key to remember is that a Debtor must properly classify their debt in the bankruptcy. A misclassification may lead to a delay in the bankruptcy process, an objection to the bankruptcy, a dismissal of the bankruptcy or the survival of the debt through bankruptcy.

If you have a question regarding different debts please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law

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San Jose Bankruptcy Attorney Discusses Pre-Bankruptcy Credit Counseling

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 now requires people who plan to file for bankruptcy protection to get credit counseling from a government approved organization within 180 days before they file. They also must complete a debtor education course to have their debts assigned and discharged.

As a rule, pre-bankruptcy credit counseling and pre-discharge debtor education may not be provided at the same time. Credit counseling must take place before you file for bankruptcy; debtor education must take place after you file.

A pre-bankruptcy counseling session with an approved credit counseling organization should include an evaluation of your personal financial situation, alternatives to bankruptcy, and a personal budget plan. A typical counseling session should last about 60 to 90 minutes, and can take place in person, on the phone, or online. The counseling organization is required to provide the counseling free of charge for those consumers who cannot afford to pay. If you cannot afford to pay a fee for credit counseling, you should request a fee waiver from the counseling organization before the session begins. Otherwise, you may be charged a fee for counseling which will generally be about $50, depending on where you live, the types of services you receive, and other factors.

Once you have completed the required counseling, you must get a certificate as proof. Check the U.S. Trustee’s website to be sure that you receive the certificate from a counseling organization that is approved in the judicial district where you are filing bankruptcy.

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 Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Creditors and Debt

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Fremont Bankruptcy Attorney Talks About Chapter 13 Plan Payments

Debtors in a Chapter 13 bankruptcy have agreed to a repayment plan to their creditors. Specifically, in the bankruptcy petition, the debtors propose a Chapter 13 payment plan. The plan will pay off certain secured and priority creditors in full and then, if feasible, unsecured creditors will get none, some or all of their claims paid off. The amount that unsecured creditors receive varies based on the debtors’ income and expenses. This amount is calculated by a formula that was created by the US Government which severely limits the type of expenses that debtors can claim.

Once a plan payment is proposed in the Chapter 13 Bankruptcy Petition, the US Trustee and court must approve it. There are a few levels of review but, ultimately, a plan is approved for a term of either 36 months or 60 months. Once approved, the Debtors are expected to pay this amount each month, on time, in either a cashier check or money order.

If Debtors cannot make the payments make the payments for any reason, it is much better to be proactive than reactive. The Debtors should contact the Trustee’s office by phone or letter to explain why the payment shall be late. Specifically, the Debtors should explicitly outline when the payment will be made or how the late payment will be repaid at a later date. For example, if the payment will be 1 week late, then a phone call and letter stating that it will be 1 week late is acceptable communication. However, if the Debtor needs to miss a month and wants to make up the payment over a series of payments, the US Trustee should contacted and the repayment plan approved. Finally, if the Debtors can no longer make the payments due to a change in circumstances, such as injury or loss of employment, the US Trustee needs to be contacted so that they can consider their options. The options include permanent modification of the plan, conversion to a chapter 7 bankruptcy, or dismissal of the chapter 13 plan all together.

If you have a question regarding your Chapter 13 Plan please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Bankruptcy Trustee , Chapter 13 Bankruptcy

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Sacramento Bankruptcy Attorney Talks About Finishing a Bankruptcy

When a debtor files a Petitioner for Bankruptcy, the US Trustee is now officially the owner of all of the debtor’s assets. The US Trustee is so intertwined with the debtor’s finances that the debtor may not even make a major purchase, such as a new car, without the US Trustee or Court’s permission. This raises the question, once the US Trustee is involved in a debtor’s business, how does one get the US Trustee out?

The real answer is that the US Trustee is involved until the end. The end, in a bankruptcy, is either when the debtor’s bankruptcy case is dismissed or discharged. A dismissal occurs when the debtor’s bankruptcy petition is not granted for various reasons. One reason could be that the debtor voluntarily dismissed because they no longer wanted the bankruptcy. Another reason could be due to noncompliance by the debtor in one shape or form which causes the Court to dismiss the petition. In either case, a dismissal usually means that debtor may refile their bankruptcy petition although a waiting period may be put in place. Once dismissed, the US Trustee no longer has any interest or control over the debtor’s assets.

In a discharge, the Bankruptcy Court makes a final ruling in favor of the debtor and has discharged all remaining debts. For a Chapter 7 bankruptcy, the discharge will occur relatively quickly and can happen within 90 days of the filing. For a Chapter 13 bankruptcy, the discharge is not complete until all the plan payments are done. In either case, once discharged, the US Trustee no longer has any interest or control over the debtor’s assets. That means the debtor is free to go shopping for a new car or sell whatever assets they walk away with.

If you have a question regarding discharge please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Bankruptcy Trustee

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Sacramento Bankruptcy Attorney Discusses General Banrkuptcy Procedures

With the economy taking such a fall these days, many people are finding it more and more difficult to pay their bills and keep up with the expenses that living in California demands. Many of these people are turning to bankruptcy in order to start over. The most common filings are for chapter 7 bankruptcy, chapter 13 bankruptcy and chapter 11 bankruptcy. The first steps to bankruptcy starts when the debtor files a petition with the court. The petition consists of financial information about their assets, debts, income, and a list of the assets the debtor claims as exempt. The petition is then filed with the court.

Next, about one month after the initial filing of the petition, the debtor is asked to attend a meeting of creditors. The debtor is put under oath, and the creditors have the right to ask the debtor about the debtor's assets and expenses. The meetings are usually limited to the debtor confirming that the bankruptsy papers contain a true and accurate listing of all of their assets and debts. If complications arise, such as litigation with a creditor or the trustee, the debtor may have to attend a court hearing or additional examintations, and he will receive such notice from the court or his attorney.

Discharge Notice

If there are no objections to the debtor's discharge, then the debtor receives a written notice from the court, stating that he has been discharged of all of his dischargeable debts.

If you have a question regarding bankruptcy, please contact our office at 1-800-941-6730 for a free consultation or visit www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 11 Bankruptcy , Chapter 13 Bankruptcy , Chapter 7 Bankruptcy

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Sacramento Bankruptcy Attorney Discusses Chapter 7 Bankruptcy Exemptions

Many people believe that once you decide to file for bankruptcy you will lose everything, The images of the Repo-Man coming in and taking all your worldly possessions always haunts the minds of many bankruptcy clients. However, these images rarely ever happen. In fact, most people do not know most people are abke to keep most of their personal items, their cars, and even their homes. In California, if you qualify as a Chapter 7 bankruptcy, there are two exemptions that you can qualify for in order to keep some of the more substantive things in your life.

Under the first exemption, you would be allowed to keep the following:

- Your home, if you don't have more than $50,000 in equity in the house (today's value less costs of sale less payoff balances on all liens and mortgages); if single and not disabled or $75,000 for families if no other member has a homestead; $125,000 if 65 or older or disabled; $100,000 if 55 or older, single and earned less than $15,000 or married and earned less than $20,000 and creditors forced the sale. Sale proceeds are exempt for 6 months after received.

- Up to $2,000 in building materials to improve your home

- Your motor vehicle, if you don't have more than $1,900 in equity in the vehicle (today's value less costs of sale less payoff balances on all liens and mortgages).

- Appliances, furnishing, clothing and food needed

- Jewelry, family heirlooms and art up to a total of $5,000 in value

- Burial plots

- Health aids

- Unemployment, disability, veterans', workers' compensation and social security benefits

- Alimony

- Retirement plan and life insurance proceeds

- Business partnership property

- Tools of your trade, up to $5,000 in value

- Bank deposits from Social Security Administration up to $2000

Under the second exemption, you can keep the following:

- Your home, if you don't have more than $18,450 in equity in the house (today's value less costs of sale less payoff balances on all liens and mortgages).

- Your motor vehicle, if you don't have more than $2,950 in equity in the vehicle (today's value less costs of sale less payoff balances on all liens and mortgages).

- Appliances, furnishings. Books and musical instruments, up to $475 in value per item

- Jewelry, up to $1,225 in value

- Burial plots up to $18,450, instead of $18,450 in your home

- Health aids

- Unemployment, disability, veterans', workers' compensation and social security benefits

- Alimony

- Retirement plan and life insurance proceeds

- Tools of your trade, up to $1,850 in value

- Up to $925 "wild card" exemption of any property, unused portion of home exemption or burial plot exemption.

If you have a question regarding bankruptcy, please contact our office at 1-800-941-6730 for a free consultation or visit www.sagarialaw.com. Our team of bankruptcy attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.

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Posted In: Bankruptcy Law , Chapter 7 Bankruptcy

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