Myths About Chapter 13 Bankruptcy

Among the many myths associated with Bankruptcy, we see these two repeatedly so let's clear things up a bit. 

1.  Myth:  When a debtor is in a Chapter 13 bankruptcy, the Trustee will check monthly bank statements and check every expenditure a debtor makes for the life of the Chapter 13 Plan.
Truth: When a bankruptcy is filed, the debtor discloses under penalty of perjury their income and expenses. The Trustee understands the income and expenditures as an average and assumes it stays the same until either the end of the bankruptcy or until an amendment is made. The Trustee will not require bank statements each month to verify this information.

2.  Myth:  When a debtor is in a Chapter 13 bankruptcy and they need a different vehicle, they will not be able to purchase another vehicle while in the Chapter 13 Plan.
Truth: A Chapter 13 bankruptcy is three to five years in length. In that period of time many things can happen to someones car, the Court understands this. It is possible to obtain a new or different vehicle, your attorney needs to file a Motion with the court to Incur New Debt. Once the judge approves the motion you can move forward with the issue.


If you want more details on these or any other bankruptcy questions feel free to submit your question(s) via email or call  877-776-4LAW (4529) to speak directly with one of our Bankruptcy Attorneys.

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Rimel Retire's while Clement joins the Eastern District

Frederick E. Clement has been sworn in to take the place of U.S. Bankruptcy Judge Whitney Rimel. A Eastern District Bankruptcy Court Judge who will be missed greatly.

Frederick Clement has been practicing law since 1993 in Redding, California. Mr. Clement is reportedly "looking forward to his new job", but "loves the Redding area and will miss it." Rightfully so, Mr. Clement has been a resident of Redding for over 20 years. He is expected to take chambers in Fresno for his 14-year (renewable) term.


He is a certified specialist in all areas of bankruptcy law and represents individuals and businesses with debt problems before federal and state courts. His resume says he has litigated in state courts, handling business and real estate disputes, and he has been involved in a large number of bench trials and two multi week jury trials.  With seven judges, the U.S. Bankruptcy Court for the Eastern District of California is the fifth busiest bankruptcy court in the nation but it sounds like Mr. Clement has the experience to fill the shoes of an outgoing, fair and competent Judge.

To file a bankrutpcy case in the Eastern District of California or for any further information, please feel free to contact our Fresno Bankruptcy Attonreys
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Bankruptcy Abuse Prevention and Consumer Protection Act, 2005 - February 29, 2012

There is an unfortunate truth in the article on NACBA's website about the 2005 bankruptcy law changes and how they effect debtors. The press from these changes made many people think it was impossible for them to seek bankruptcy relief. 

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act. The idea of this law was to stop people who were thought to be "abusing" the system. The article reports that a study (done by the American Bankruptcy Institute) found that "the law has served only to drive up the costs to the consumer debtor, and changes in creditor returns have been statistically insignificant." NACBA states that the price for Chapter 7 Bankruptcy has risen 40% and Chapter 13 has risen 25% from 2005. However, it is still possible to seek the relief needed to gain a fresh start.  The new law may have made the filing process more complex but Bankruptcy offices such as The Law Office of Timothy Springer specialize in handling Bankruptcy cases and stay up to date on laws and requirements to insure a smooth transaction made as simple as possible for the debtor. Visit their website, or call today, (559) 225-3622, for more information on how bankruptcy can help you.





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If I file Bankruptcy can I keep my credit cards? - February 23, 2012

The general answer is no. More often than not the root cause, pushing someone towards bankruptcy is credit card debt. That debt is what the client wants to get discharged. However, when there is a credit card held by the debtor which is in good standing at the time of filing or has a $0 balance, the debtor assumes many times (incorrectly) that they can keep that card after the bankruptcy. While I cannot speak for all creditors, most of them will still cancel your account. When you file a bankruptcy, you are required to list ALL of your debts, and ALL of your assets. You cannot leave specific cards out and even though you are only required to inform your attorney about cards with a balance, the cards in good standing, and without a balance will soon find out about the bankruptcy and likely close your account. People seem to be frightened at the thought of not having any credit cards to fall back on, what they don’t realize is the hundreds of dollars they are paying towards those credit cards every month will free up and actually become available funds. With those funds you can purchase a prepaid "Debit" card that looks like, and is useable as a credit card.

If you have any questions please contact our Fresno Bankruptcy Attorneys at The Law Office of Timothy C. Springer. You can reach us at (559) 225-3622 to find out more about the bankruptcy process as it pertains to your situation. 

Preparing for Bankruptcy - February 23, 2012

 People file bankruptcy to find relief from a situation where finances have spiraled out of control. They may seek to discharge all the debt, through a chapter 7; or reorganize the debt and pay a more reasonable per month payment through a chapter 13. (Income variables apply when determining qualification) If you are looking to file a Bankruptcy, there are a few things you want to watch out for in preparation of the act of filing.

1) Payments made to creditors or on a personal loan will be scrutinized during this process if the payment made was over $600 and within 90 days of filing the bankruptcy. Try and stay away from these types of transactions prior to filing.
2) Stop using your credit cards if you are considering bankruptcy. Use of cards just before filing will also be scrutinized and possibly even viewed as fraud. Make sure that you discuss any recent transactions along with your intentions with your attorney.
3) Transferring or selling personal property just before filing may cause unnecessary complications in your case. In most cases "exemptions" can be used to protect any property you have from becoming property of the bankruptcy estate. If the Trustee of your case sees you have transferred recently or sold something hastily, they may get it back and then because we didn't protect it by exempting it, it will become property of the bankruptcy estate.

Bankruptcy can be confusing for people who know little about the bankruptcy process (most people fall under this category), it is important to consult a bankruptcy attorney about your situation before taking matters into your own hands, these items are listed as precautions and not legal advice.

If you have any questions about Bankruptcy please contact our Fresno Bankruptcy Attorneys at The Law Office of Timothy C. Springer for more information.
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Is Bankruptcy possible with a reverse Mortgage?

Bankrate's reader, John, submitted a question worth re-posting. He asks, 

"If somebody has a reverse mortgage, could he file for bankruptcy and still keep the house -- of course meeting all the other obligations to the mortgagor?"

-Firstly, Justin Harelik of Bankrate.com suggests to consider three points; home value, current balance and monthly payments. When considering bankruptcy with a reverse mortgage, make sure you can protect or exempt whatever amount of equity you currently have in your home. Hiring an appraiser is the most efficient way of acquiring that amount.
-Secondly, even on a reverse mortgage, you must find the current balance of your home. Mr. Harelik suggests requesting a "10-day payoff" from the lender which should show the current balance. This information will be required for the bankruptcy paperwork.
-Lastly, the monthly payment point comes into play and may reduce or remove the need for bankruptcy at all depending on your situation. You will need to review the loan documents to figure out if you will still have access to the monthly distributions or the home's equity.

 In conclusion, the article outlines that if you find the answers for your situation, you may well be able to file a bankruptcy and keep your home. Once you have the researched these three key points, contact our fresno bankruptcy attorneys at the Law Office of Timothy C. Springer for a free consultation.

Original article posted at Bankrate.com

Beware of Zombie Debt Collection - February 15, 2012

    I saw a great article at Forbes.com about "Zombie Debt Collectors" and how you should beware of them.

     Have you have ever received a solicitation for payment of a long lost debt or a debt you don't recognize at all? If so, you have most likely been targeted as an unsuspecting victim of a Zombie Debt collector. How and why does this occur? Greed is the answer. Creditors stoop to new lows everyday with their aggressive, sometimes fraudulent collection practices. 
     Beware. In an attempt to maximize profits, some companies are buying very old debts and even though they can be: past the statute of limitations, never owed, owed by a deceased parent, previously paid in full, previously settled, or otherwise not legally collectible, they still make the attempt to collect. Collectors pay pennies on the dollar for these debts so for very little, they stand to make a very large profit. Sometimes what seems like a run-of-the-mill credit card offer is actually a guise to get you, the consumer, to sign yourself back on the hook for a portion or all of a Zombie Debt.     
     Consumers don't realize they are reanimating a Zombie Debt, as described in the very, very fine print of the new cardholder agreement and can now be sued for a balance which they were previously not legally responsible for. Consumers must be very careful and weary of creditors who try and circumvent the statute of limitations, it is important protection which is put there for a reason. If you feel that you have been a victim of this Zombie Debt collection practice, contact our office below to explore your options.



For more information on ways Bankruptcy can help rid you of new and old debt, contact The Law Office of Timothy C. Springer
 
See similar stories at Forbes.com, Beware of Zombie Debt Collectors, and
MoneyLand Time.com, Zombie Debt: A Real Life Horror Story.