Bankruptcy Law – Page 3 – Law Office of Rick Morin, PC

Bankruptcy Law, Bankruptcy Rules, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Creditors

List all of your bankruptcy creditors – or else!

Bankruptcy Creditors

Preparing a successful Chapter 7 or Chapter 13 bankruptcy involves many steps. One of the most important steps in any bankruptcy is to ensure that you have listed all of your creditors. Here’s why.

After a Chapter 7 or Chapter 13 bankruptcy is filed, the court will send every creditor a notice of bankruptcy filing. This notice tells your creditors that you have filed bankruptcy. The notice also gives your creditors information about your case such as the date of your bankruptcy meeting of creditors. The notice also contains important deadlines.

The court will only mail this notice to creditors that have been properly listed on the bankruptcy schedules. After all, the bankruptcy court does not know who you owe money to. The court simply takes information that is provided on your bankruptcy paperwork and uses that information to notify all of the relevant parties.

One question that I am often asked is what to do when a creditor has sold a debt or assigned it to a collection agency. My rule is to be as thorough as possible when listing bankruptcy creditors. I prefer to list the original creditor, such as capital one, and also the collection agency that the debt is it assigned to, such as Midland Funding LLC. This ensures that all appropriate parties receive your notice of bankruptcy. It also ensures that each creditor will stop contacting you once your bankruptcy is filed.

Another trick is to make sure that you notify your creditors at the appropriate mailing addresses. Look on your debt statements for a “correspondence address.” This address might be different than the payment address. You also might need to use Google or other tools in order to locate the mailing address for your various creditors. Sometimes this information is not easy to find on a creditor’s website.

The bottom line is that you should take time to ensure that you list all of your creditors at the right address on your bankruptcy paperwork. Bankruptcy law and the rules of the bankruptcy court tell you that only properly listed debts will be discharged in your bankruptcy. The main point of this article is this: list all of your debts, even debts that you are not sure about.

After going through bankruptcy, you don’t want to discover that you forgot to list major creditors. Dealing with creditors after your bankruptcy is over can be difficult. Getting things right at the beginning will help you down the road.

Please call my office if you have any questions about filing bankruptcy in Sacramento. My phone number is (916) 333-2222.

March 4, 2015/by Attorney Rick Morin

Bankruptcy Law, Bankruptcy Rules, Chapter 13 Bankruptcy

Chapter 13 Bankruptcy and Taxes

Sacramento Bankruptcy Lawyer Rick Morin Going through a Chapter 13 Bankruptcy can be confusing enough without tax season sneaking up behind you. In this post, I will go through some frequent questions regarding Chapter 13 bankruptcy and taxes.

What returns are due?

According to the Bankruptcy Code, all Chapter 13 debtors must file all required tax returns for the years ending within four years of your bankruptcy filing. If you’re going to be asking the government for assistance in the form of bankruptcy, the IRS expects that you have played by their rules and filed all of your tax returns. Makes sense!

In addition, you’ll also need to stay current with all applicable federal, state, and local tax returns throughout your bankruptcy. A typical Chapter 13 bankruptcy will last between 3 and 5 years, so it is important to stay on top of your taxes during that time. Even one missed return can put your bankruptcy at jeopardy!

When should I file?

The federal tax returns for the four preceding years must be filed before your Bankruptcy Hearing, or “Meeting of the Creditors”. You can however, apply for an extension for 120 days if you need to. In general though, it’s always best to file as soon as possible so that all debts are known beforehand. (It can also take some time to verify that all the correct returns were filed.)

What will happen if I don’t file?

If for whatever reason you don’t file your tax returns, your Bankruptcy Plan may not be confirmed. This may result in your case being dismissed. You should also note that interest and penalties will be charged on returns not filed by the due date under the Internal Revenue Code. For more than just bankruptcy reasons, it is critical that your taxes are filed on time each year.

Where can I get proof of filing?

Your bankruptcy trustee may ask you to submit copies of transcripts of your tax returns as proof of filing. If you don’t have the copies you can request a free transcript from the IRS website, www.irs.gov or submit a Form 4506-T, Request for Transcript of Tax Return, with the IRS by calling 1-800-908-9946. Keep in mind this process may take 10 to 15 days after the request is received. When you go to court for your Meeting of Creditors, it is best to have all of your tax-related issues sorted. If not, the bankruptcy trustee may continue your hearing to allow you time to resolve any issues.

Have more questions?

If you’re planning on filing for a Chapter 13 Bankruptcy and have more questions regarding your situation, please call my office at (916) 333-2222.

February 12, 2015/by Attorney Rick Morin

Bankruptcy Law, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Local Bankruptcy News

Bankruptcy Hijacking: What You Need to Know

Bankruptcy hijacking has been a problem in Southern California bankruptcy courts for some time. The trend is starting to show up in the Sacramento Bankruptcy Court too. Here is what you need to know about this concerning phenomenon.

Bankruptcy hijacking can be defined as a third party fraudulently taking advantage of a debtor’s bankruptcy case without the debtors knowledge. Sound confusing? It is! Here is an example that illustrates what has been happening in bankruptcy courts up and down the state.

One of the main protections of filing for bankruptcy is known as the “automatic stay.” The stay acts to protect a person from nearly all collection activity while the debtor’s bankruptcy is sorted out by the court. The automatic stay is so powerful that it can even stop a bank from foreclosing on a house. It is this protection that unscrupulous individuals are taking advantage of — and make no mistake, it is seriously illegal.

Let’s say that Person A is about to have their house foreclosed upon. They hire an unscrupulous person, Scam Artist, to “stop the foreclosure.” What Scam Artist does is pretty clever: he or she fakes a grant deed from Person A to Debtor and back dates it prior to the bankruptcy. Scam Artist then faxes the fake grant deed and a copy of Debtor’s notice of bankruptcy to the foreclosure servicer. The servicer, now thinking that the house is protected by Debtor’s bankruptcy stay, pulls back and stops the foreclosure sale. Up until this point, Debtor has no idea any of this is happening.

The first Debtor hears about the scheme is when Bank comes into the Bankruptcy Court and files a “Motion for Relief from Automatic Stay.” This motion is a request by the Bank to have the Bankruptcy Court lift the automatic stay so that Bank can proceed with the foreclosure. Debtor, the Bankruptcy Trustee, and the Court are all very confused when this motion shows up for one simple reason: the property listed in the Motion isn’t listed on any of Debtor’s bankruptcy paperwork. This is for good reason: the property doesn’t belong to Debtor!

Debtor now has to respond to the Motion, incurring time and expense. Debtor also has to endeavor to convince everyone in the process that they weren’t perpetrating a fraud on the Court by not “listing” the house referred to in the Motion. This is a huge mess for everyone involved.

Presumably, Person A has bought themselves a few extra months in their house. But they also have put themselves at risk of criminal prosecution. For the Bank’s part, their sloppy reliance on a forged grant deed has unnecessarily complicated Debtor’s bankruptcy case. There is plenty of blame to go around.

To find out more about the bankruptcy process in Sacramento, please call my office at (916) 333-2222. I can guide you through the Chapter 7 and Chapter 13 bankruptcy process.

February 1, 2015/by Attorney Rick Morin

Bankruptcy Law, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

Top 7 Bankruptcy Myths That Must Die

As a Bankruptcy Attorney in Sacramento, I hear all sorts of myths about the bankruptcy process. Here are some of the bankruptcy myths that I hear over and over again — and the real truth.

1. You Can’t Keep Your Car in Bankruptcy

A lot of folks think that they will need to surrender their car when they file bankruptcy. This is almost never the case. While a debtor has the option to surrender a car (because of a bad loan, for instance), in almost all cases, you do not have to surrender your car in a bankruptcy.

2. You Won’t Get Any Credit Cards for 10 Years

Bankruptcy will appear on your credit report for 7-10 years after you file. But this does not mean that you will not be able to obtain credit for 10 years. Most of my clients report that they receive credit card offers and auto loan solicitations immediately after their bankruptcy case is discharged. Be careful though: the credit offers you receive immediately after bankruptcy will probably have high interest and fees. So it pays to shop around.

3. Civil Court Judgements Can’t Be Included in Bankruptcy

A lot of my clients have dealt with financial issues for years prior to filing for bankruptcy. What gets them to file is the fact that one of their debts has gone to court and resulted in a judgement. As long as the judgement is unsecured, it can be discharged in a bankruptcy. If a creditor has put a judgement lien on your house, there are still options. Call me to discuss.

4. You Have to Surrender Your Tax Refund to the Court

This one has some truth to it. Under certain circumstances, a debtor must surrender their tax refund to the Bankruptcy Trustee. However, in most of my Chapter 7 cases, my clients are not required to surrender their tax refund to the Trustee. The bankruptcy exemptions that you use in your case will determine whether you get to keep your tax refund, so plan carefully.

5. Garnishments and Bank Levies Don’t Stop Until Discharge

This one is absolutely wrong! Wage garnishments and bank levies must stop immediately upon the filing of your bankruptcy. The “automatic stay” goes into effect the second that my office sends your bankruptcy paperwork to the courthouse.

6. Such-and-Such Debt Is Not Dischargeable

There are some sneaky and aggressive debt collectors who will tell you that their debt can’t be discharged in a bankruptcy. If you press them for details, they will shout out a bunch of nonsense. Listen to a professional: in all but the most extreme cases, your unsecured debt will be eliminated in a Chapter 7 bankruptcy. That’s the truth!

7. Your Debts Must Be At Least $X In Order to Claim Bankruptcy

While the number is always different, some people think that there is a minimum debt required to file for bankruptcy. This is not true. There is no debt minimum contained anywhere in the bankruptcy code. Each case is different, and the court will look to your individual circumstances to make sure that you aren’t abusing the bankruptcy process. If you’re are having trouble with your finances and can’t afford to repay your debt, it is a good idea to at least discuss your situation with a bankruptcy attorney.

If you have any questions about these bankruptcy myths or others, please call my office. I can be reached at (916) 333-2222.

January 25, 2015/by Attorney Rick Morin

Bankruptcy Law, Chapter 7 Bankruptcy

6 Alarming Secrets You Didn’t Know About Bankruptcy

1. Bankruptcy Isn’t Free

In Sacramento, a Chapter 7 bankruptcy attorney can run anywhere from $1,500-$3,000. Hiring an attorney will dramatically increase the likelihood of a successful bankruptcy. Even if you are willing to risk your financial future and file your bankruptcy without counsel, you will still need to pay court filing fees, online classes, etc.

2. There are Mandatory Classes

You will be required to take two financial management courses. They might be boring, but they will help you understand how to avoid financial trouble in the future. Each class costs around $30 to $50. At my law office, both classes are included with your bankruptcy package free of charge.

3. You Must List All of Your Debts and Creditors

No, there’s not a magic button that you or your attorney can press that will find all of your debt. A credit report is helpful, however it’s up to you make sure you’re not missing something before you file. Some people believe that they can “pick and choose” which debts to include. Bankruptcy law is clear: you must include all of your debts in the bankruptcy.

4. Going to Court Isn’t That Bad

While it may seem daunting at first, your bankruptcy hearing isn’t nearly as terrible as you may think. You will be meeting with your Bankruptcy Trustee, not a judge. The Trustee will ask you a few simple questions. And, despite being called the “Meeting of Creditors,” creditors rarely bother to attend.

5. If You’re Getting Divorced, It Might be Better to File Together

You can divorce your spouse, not your debt. If the debt is in both your names, creditors can go after both of you – even after your divorce is final. Why go through the added cost of two separate bankruptcies when you can file a joint case and each get a fresh start?

6. Rebuilding Your Credit Will Take Work

Bankruptcy is the first step on the road to recovery. However, it is up to you to make sure that you don’t slip back into bad habits. Bankruptcy will ease the burden of your debt, so that you can start to build up positive credit again.

If you have any questions about filing Chapter 7 or Chapter 13 bankruptcy in Sacramento, please call my office at (916) 333-2222. I will answer all of your questions and make the process as easy as possible.

January 16, 2015/by Attorney Rick Morin

Bankruptcy Law, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Meeting of Creditors

4 Surprising Questions You Might Be Asked at Your Bankruptcy Hearing

For most debtors, the bankruptcy hearing is the most daunting part of the bankruptcy process. Whether you are filing Chapter 7 or Chapter 13 bankruptcy, each debtor is required to appear in court for a “meeting of creditors.”

As I have discussed in the past, the meeting of creditors is an opportunity for the Bankruptcy Trustee and your creditors to ask you questions regarding your financial affairs. Most hearings go well and are done in a matter of minutes. But not always!

Here are four questions that tend to surprise people during a meeting of creditors.

1. Did you disclose all property that belongs to your non-filing spouse?

A married couple is not required to file bankruptcy together. One spouse may file bankruptcy and the other spouse is not required to file. However, because California is a community property state, the debtor must disclose all property owned by both the debtor and his or her spouse. By not disclosing all property owned by the non-filing spouse, the debtor would not be able to “exempt” that property. This means that the property of the non-filing spouse may be subject to liquidation by the bankruptcy trustee!

The lesson here is to list all property owned by either spouse.

2. Have you paid any money to family in the past year?

Money paid to family in the 12 months prior to the filing of the bankruptcy (and sometimes longer too!) can be recovered by the Bankruptcy Trustee. Some debtors don’t think that it is important to disclose payments to family on debts. This is because the debtor intends to repay the family member after the bankruptcy. This can cause a lot of trouble for a debtor in a bankruptcy. All debts, even debts that a debtor intends to repay after the case, must be disclosed to the court.

The lesson here is that if you have repaid a family member a loan prior to the filing of a bankruptcy, you must discuss this with your attorney. There are plenty of options here, but it must be discussed prior to the filing of your bankruptcy!

3. Why are you filing bankruptcy?

Most Bankruptcy Trustees don’t ask the reason behind your bankruptcy filing. But some do! Make sure that you have a concise, easy-to-understand answer to this question. You might be surprised by some of the answers I have heard from debtors while waiting in court.

4. Are you entitled to any money such as lottery winnings?

Can you imagine filing bankruptcy and then winning the lottery? It actually happens. In some cases the bankruptcy trustee will have the right to recover these lottery winnings for the benefit of your creditors. Even though this situation sounds unlikely, if it does actually happen, the debtor must disclose recent lottery winnings. Failure to do so can result in the revocation of your bankruptcy discharge, and in some cases, even prosecution!

If you have any questions about filing Chapter 7 or Chapter 13 bankruptcy in Sacramento, please call my office at (916) 333-2222.

January 11, 2015/by Attorney Rick Morin

Bankruptcy Law, Chapter 7 Bankruptcy, Creditors, Local Bankruptcy News

Bill Collection Scams in Sacramento

Debt Collector

My office has been receiving a surprising number of phone calls recently from people thinking about filing bankruptcy with one common trait: they were recently called by a extremely aggressive bill collector. Read more below to find out what you need to know about these bill collection scams in Sacramento.

Bill collectors get a bad rap because of a minority of people in their industry. However, the number of “bad” collectors appears to be in the rise. At least that’s what the phone calls to my bankruptcy law firm seem to indicate.

Potential bankruptcy filers calling my office all tell a similar tale. They defaulted on a debt in the past 10 years or so and never heard from the company again. Then, out of nowhere, they were flooded with aggressive phone calls. Not only to their personal numbers, but to work and to family and friends.

In one case, a client of mine agreed to pay an aggressive collector some money because he was hounding her at work. What the client did not know at the time was the debt was too old — it was beyond the “statute of limitations.” The client had no legal obligation to pay the debt!

Other clients have told me of stories of collectors threatening them with arrest or criminal prosecution for failing to pay a debt. My advice here is the same that I give to my clients: there are very, very few circumstances in which a person can be arrested for failing to pay a debt in America. This is jut another dirty trick that collectors use to try to get any money that they can.

Again, not all collectors are bad apples. In many cases, they are pursuing legitimate debts or judgements. If you receive collection calls, whether they be legitimate or not, it is important that you consult an experienced consumer attorney.

I have helped many clients deal with bill collectors — and bankruptcy isn’t always the path that we go down. I have negotiated debt settlement offers that keep collectors at bay and also avoid the need for filing bankruptcy. Occasionally we determine that bankruptcy is the best available option. Either way, I’m happy to guide clients through this challenging process.

If you have questions about aggressive debt collectors or bankruptcy in Sacramento, please call my office at (916) 333-2222.

December 28, 2014/by Attorney Rick Morin

Bankruptcy Law, Bankruptcy Rules, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

Importance of Bankruptcy Paperwork Might Surprise You

When a person signs their bankruptcy forms, they do so under penalty of perjury. This means that the government can prosecute a bankruptcy debtor for lying on their bankruptcy paperwork. This alone is a good enough reason to tell the truth and not hide anything. Surprisingly, omissions on your bankruptcy paperwork can have effects in other areas too.

A person filing bankruptcy must realize that the entire bankruptcy petition (except for their social security number) becomes a public record. Anyone that wants to have access to the bankruptcy filing can do so by looking at it at the courthouse or even online via PACER. I always tell my clients that they can expect to receive solicitations from car dealerships and credit card companies after they file their bankruptcy. This is because advertisers search the court docket for bankruptcy filings. Interesting, right?

There is a story circulating amongst Sacramento bankruptcy attorneys that illustrates the importance of telling the truth on your bankruptcy. A debtor filed a bankruptcy and failed to list all of their personal property on Schedule B of their petition. Schedule B is the bankruptcy form where the debtor is required to list all of their personal property, no matter how insignificant. In this case, the debtor did not list some “toys” such as expensive cameras and bicycles. Later on, a burglar stole these cameras and bikes from the debtor’s house. When the debtor filed an insurance claim, the insurance company reviewed the debtor’s bankruptcy petition — 3 years after the bankruptcy! Because the debtor did not list these assets in their bankruptcy, the insurance company denied the claim.

Your bankruptcy petition and schedules could also be introduced as evidence in litigation down the road. Again, since you have to sign your paperwork under penalty of perjury, you should make sure that it is true and accurate!

I assist all of my clients with making sure that their paperwork is true, accurate and complete. My office uses proprietary procedures and check lists to ensure that we don’t miss any details, important or not. A bankruptcy filing is a big deal, and we work hard to do the best that we can every time.

If you have any questions about filing for bankruptcy in Sacramento, please call me at (916) 333-2222. Don’t delay!

December 15, 2014/by Attorney Rick Morin

Bankruptcy Law, Bankruptcy Rules, Chapter 7 Bankruptcy

Can I File Bankruptcy Again?

Sacramento Bankruptcy Lawyer Rick Morin No one ends their bankruptcy thinking that they will need to do it again. However, as most people facing bankruptcy already know, you can’t plan for everything life throws at you. “Can I file bankruptcy again?” is a question that we get asked quite often. Whether there is a medical emergency, divorce, or if you lose your job – a second bankruptcy may be a viable financial option.

As a reminder, in a Chapter 7 all or most of your debts are discharged. In a Chapter 13, you are focused on reorganization so that you can repay some of your debts over time.

While there aren’t any rules on how many times you can file bankruptcy, the court does limit when you can file again. This can be confusing, because the length of time varies based on what type of bankruptcy you originally filed.

For example, you must wait 8 years in between Chapter 7 bankruptcies. The time is computed from the day that you filed your first bankruptcy.

Let’s say instead that you filed a Chapter 7 and now you need to file Chapter 13. In order to receive a discharge under Chapter 13, you only need to wait 4 years from the day that you filed your first Chapter 13.

If you received a prior discharge under Chapter 13 and now want a Chapter 7, you will need to wait six years. However, there are exceptions to this rule. If during your first bankruptcy, you paid back all of your unsecured creditors OR if you paid back at least 70% of the claims and the plan was made in good faith and was your best effort, you will not need to wait 6 years.

As you can see, the rules for when you are allowed to file subsequent bankruptcies can be difficult and confusing. If you find yourself looking at bankruptcy for a second time, call 5 Star Sacramento Bankruptcy Attorney Rick Morin at (916) 333-2222. We can help you figure out what type of bankruptcy is right for you.

November 23, 2014/by Attorney Rick Morin

Bankruptcy Law, Chapter 7 Bankruptcy

How to Discharge Taxes in Bankruptcy

Like credit card debt and car loans, back taxes can be a serious financial burden. Yet in some cases, it is possible to find relief from your taxes through bankruptcy.

The process boils down to 5 rules.

The first two are simple: the tax debt attempting to be discharged must be from a non-fraudulent return, and the debtor must not be willfully trying to evade their taxes. These rules weed out those who want to file bankruptcy as a way to avoid paying their taxes.

The other rules further limit which taxes can be discharged. The tax debt must be over 3 years old and filed at least 2 years before the bankruptcy. The IRS also must not have assessed, or reviewed, the tax return at least 240 days before the bankruptcy was filed.

If you have questions about discharging your tax debt through bankruptcy or would like to ask about your specific situation, please call bankruptcy attorney Rick Morin at (916) 333-2222.

October 21, 2014/by Attorney Rick Morin