Chapter 13 Bankruptcy – Page 2 – Law Office of Rick Morin, PC

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

Don’t Forget Your Social Security Card

Sacramento Bankruptcy Lawyer Rick Morin There is a lot to remember during the bankruptcy process. A very important part of each bankruptcy is the Meeting of Creditors. Are you prepared for yours?

Bankruptcy Meeting of Creditors

At your Meeting of Creditors (sometimes called a 341 Hearing by attorneys), you will be asked some questions. The questions are about your bankruptcy papers and financial affairs. The hearing is conducted under oath by your bankruptcy trustee.

The very first thing that the Trustee will do at your Meeting of Creditors is verify who you are. You can guess why. The court needs to ensure that the person being interviewed is the actual debtor. Why would someone else show up? Trust me, it happens.

The Trustee will request a government-issued photo ID. You are also required to show proof of your social security number. Photo ID is usually your California driver’s license, California ID card, passport, or military ID. Proof of social security number is typically your social security card or your medicare card. Why medicare card? Your medicare card is one of the only other government documents that contains your full social security number.

Why You Need Your Social Security Card

I occasionally see debtors appear at their Meeting of Creditors without one or both of these documents. Most often missing is the social security card. Some Trustees will not conduct the interview without proper paperwork. Others will move forward the interview but require you to come back to court at a later date with the required documents.

If you are like most people, you only want to go to the federal courthouse in Sacramento once. This means that you need to remember to bring your ID and social security card with you to court. Make a note in your calendar or put it in your phone. Don’t forget!

My law firm makes bankruptcy as easy as possible. Please call my office at (916) 333-2222 to discuss obtaining a fresh start with your finances.

April 12, 2016/by Attorney Rick Morin

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

How To Amend Bankruptcy List of Creditors

Sacramento Bankruptcy Lawyer Rick Morin Your bankruptcy petition should be as perfect as possible before it is sent to the court. However, issues can arise after filing. A common problem is the failure to list all creditors. Here is how to amend your bankruptcy petition to fix that problem.

Listing All Creditors is Important

When a bankruptcy petition is submitted to the court, the court mails an official notice to your creditors. The court can only send the notice of bankruptcy to creditors that it knows about. The court relies on debtors to supply the list of creditors.

Creditors can be listed on Schedule D or E/F of the bankruptcy petition. Schedule D is reserved for secured creditors. Schedule E/F is reserved for unsecured creditors.

Occasionally, a debtor forgets to list one or more creditors on the initial paperwork. Or maybe a new collection notice shows up after the bankruptcy has been filed. Good news: the courts permit you to amend your bankruptcy petition after filing.

How To Amend Bankruptcy List of Creditors

List the legal name, address, and debt amount of the new debt on the appropriate bankruptcy schedule.
Write a big “A” next to the name of the creditor. This tells the clerk of the court which debts are being added.
In the Eastern District of California, you are required to prepare an Amendment Cover Sheet. You can download this form from the court website.
Prepare a new Master Address List that contains only the name and address of the new creditor. There is a helpful tool on the court website that helps with this.
Prepare a Proof of Service. You are required to mail the amendment and a copy of your 341 Notice to each creditor that you are now including in the bankruptcy along with two other parties listed below. You must file a Proof of Service with the Court to show that you have mailed the notice to the appropriate parties.
Prepare three envelopes: one addressed to the new creditor; one addressed to your bankruptcy trustee; and one addressed to the United States Trustee’s Office. Include a fully copy of the amendment along with an unsigned Proof of Service. Put these in the mail.
Sign your Proof of Service. You can now take your Amendment Cover Sheet, Amended Schedule, Master Address List, and Proof of Service to the Court for filing.

As you can see, making an amendment to your bankruptcy petition does take some work. It isn’t difficult to do, but the right steps must be followed. Skipping a step can result in an invalid amendment. This means that the new debt might not be included in your discharge.

I help make bankruptcy easy by handling the process from start to finish for my clients. Please call my office at (916) 333-2222 if you want to discuss how bankruptcy can help you.

March 28, 2016/by Attorney Rick Morin

Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

Don’t Hide Assets From The Bankruptcy Court

Sacramento Bankruptcy Lawyer Rick Morin Rapper and occasional actor 50 Cent has been in the news recently. 50 Cent declared bankruptcy in New York. He was on the losing end of a civil lawsuit and chose to file for bankruptcy to restructure his debts.

50 Cent is big on the social media. He was recently hauled before the United States Bankruptcy Court to explain recent social media posts. These Instagram posts showed the rapper posing with large amounts of cash. Why is that a problem? 50 Cent did not declare a large amount of cash on his bankruptcy paperwork. Hiding assets from the bankruptcy court is a very big deal.

Complete Disclosure is Required in the Bankruptcy Court

Bankruptcy filers owe the court and creditors an absolute duty of full disclosure. A typical consumer Chapter 7 bankruptcy petition consists of over 60 pages of documents. These documents require disclosure of assets, creditors, and income information. Answers to numerous questions about the debtor’s financial affairs are also required.

All bankruptcy documents are signed under penalty of perjury. People that lie on the bankruptcy forms or attempt to hide assets can find themselves being investigated by the FBI. Lying or hiding things during the bankruptcy process is a federal felony.

Simply forgetting something isn’t an excuse. In most cases, bankruptcy filers are in control of the timing of their bankruptcy. My office works closely with debtors to ensure the accuracy of their paperwork before it is sent to the court. Extra diligence prior to filing pays dividends during the bankruptcy process.

How to Avoid Trouble

Currently I do not ask debtors whether they have a large stack of money sitting on their bedroom floor. Maybe I should start. Typical assets that are easy to forget about include:

Assets that belong to you but are in the possession of another person.
Intangible assets such as lawsuits, potential lawsuits, pending bonuses, and tax refunds.
Security deposits paid to landlord at the beginning of a tenancy.
Savings bonds.
Pre-paid debit cards.
Seldom-used bank accounts.

When declaring bankruptcy, make sure to take the time to answer all of the required questions carefully. I help people in the Sacramento Area successfully get through the bankruptcy process. Please call (916) 333-2222 to discuss your bankruptcy options.

March 19, 2016/by Attorney Rick Morin

Chapter 13 Bankruptcy

IRS Tax Bankruptcy

Sacramento Bankruptcy Lawyer Rick Morin I see a lot of people that get into trouble with the IRS and Franchise Tax Board for unpaid taxes. Some people adjust their tax withholdings so that they withhold not enough taxes from their wages. This can help with a temporary financial situation, but failing to re-adjust the withholding can result in a large tax burden.

Luckily, there are bankruptcy options that can help resolve tax issues.

Not All IRS Tax Debts Are Dischargeable

In a Chapter 7 bankruptcy, a person discharges their unsecured debts. In some cases, tax debts can be included in that discharge. The rules here are complicated and are meant to provide relief to innocent people that can’t realistically repay their tax bills. I have written about the rules for tax discharge before, so I won’t cover that here.

If not all of your tax debts are dischargeable in a Chapter 7 bankruptcy, there still are bankruptcy options available to you.

Chapter 13 Bankruptcy Helps With Tax Debts

The IRS imposes interest and penalties on unpaid tax bills. If you don’t address your tax debts soon, the interest and penalties will grow quickly. Even getting on a payment plan with the IRS doesn’t stop interest or penalties. This can make it difficult to repay your tax debt to the government.

Chapter 13 Bankruptcy can help! The IRS and Franchise Tax Board are not allowed to charge you interest or penalties while you are in a Chapter 13 bankruptcy. As your Chapter 13 attorney, I can help craft a plan that will pay off your tax obligations owed to the government. This way, you will emerge debt free after your Chapter 13 bankruptcy is over.

Don’t Delay

If you know you have a large tax burden, it makes sense to contact a qualified Chapter 13 bankruptcy attorney as soon as possible. Interest and penalties will only continue to grow your tax debts. Stop the bleeding and get onto a path towards financial recovery before things get too out of hand.

I help people in Northern California reorganize their debts, including IRS tax debts, through Chapter 13 bankruptcy. Please call my office at (916) 333-2222 for more information.

March 5, 2016/by Attorney Rick Morin

Chapter 13 Bankruptcy

Home Bankruptcy Sacramento

A common reason to declare bankruptcy is to seek help with past-due mortgage payments. There is one specific type of bankruptcy that can help in this situation. Read on to learn more about Home Bankruptcy in Sacramento.

If you have fallen behind on your mortgage payments, it can be difficult to get caught up again. The combination of interest, late fees, and keeping up with your normal bills can often be difficult to surmount. Mortgage lenders are better than they used to be about options to keep you in your home, but they aren’t always willing to work with you.

The good news is that a Chapter 13 bankruptcy will keep you in your home. You won’t have to worry about foreclosure for the life of the bankruptcy case. And you will be given an opportunity to repay your past-due mortgage payments over 3 or 5 years.

Spreading out your past-due mortgage payments over 3 or 5 years will make the payments very manageable. Most mortgage companies want you to cure the mortgage arrears in a lump-sum payment. This is not usually possible for most regular people.

Chapter 13 will give you breathing room to get your mortgage caught up. This way, you won’t have constantly worry about foreclosure. Chapter 13 will also help you reorganize your other debts such as credit cards, medical bills, and even taxes.

If you are having trouble repaying past-due mortgage payments, please call my office at (916) 333-2222 to discuss whether Chapter 13 bankruptcy is right for you.

February 28, 2016/by Attorney Rick Morin

Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Creditors

Continued Garnishment After Bankruptcy Filing

Sacramento Bankruptcy Lawyer Rick Morin One of the most powerful provisions of bankruptcy law is called the “automatic stay.” The automatic stay prevents your creditors from taking action against you once you have declared bankruptcy. But what happens if you have a continued garnishment of your wages even after you file for bankruptcy?

By law, your creditors are required to cease all collection activity immediately upon the filing of your bankruptcy case. For my clients that have wage garnishments or bank levies, I always send a notice to the creditor once the bankruptcy is filed. This is followed up by the official notification sent from the United State Bankruptcy Court. The official notice usually goes out about a week after filing. By doing this, it will be difficult for the creditor to say that they never received notice of the bankruptcy.

Not all creditors take appropriate action after receiving notice of a bankruptcy. Some creditors are lazy. Some creditors just don’t care. Some creditors are just too big and the bankruptcy notification gets lost in the shuffle. No matter the excuse, the result to the bankruptcy filer is the same — continued collection activity even after the bankruptcy.

Any post-filing collection activity can be sanctioned by the bankruptcy court. In most cases, I make an attempt to reach out to the creditor to remedy the problem. If the creditor is not responsive, I can file a motion with the bankruptcy court to sanction the creditor for its willful violation of the automatic stay.

If the conduct of the creditor is egregious, the court will often issue a penalty against the creditor. Yes, you read this right. In some cases, you can recover money from a creditor that flouted the bankruptcy rules!

Bankruptcy laws are written to protect both debtors and creditors. My clients always play by the rules, but not all creditors do. I have personally gone after creditors that haven’t followed the rules and won judgements in my client’s favor.

Don’t delay any longer. Call my office at (916) 333-2222 to discuss your bankruptcy options.

February 21, 2016/by Attorney Rick Morin

Bankruptcy Law, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

4 Common Myths About Sacramento Bankruptcy

Bankruptcy Myths Sacramento

As a bankruptcy lawyer in Sacramento, I hear all kinds of misinformation about bankruptcy. Here are the top five myths about bankruptcy that I hear on a regular basis.

Myth 1. I can’t keep my car when I file bankruptcy

It is extremely rare for a person to lose their car during the bankruptcy process. In a typical bankruptcy, the bankruptcy filer doesn’t lose any of their property, much less their car. In most cases, your car is protected from being taken by the bankruptcy trustee. If you are worried about losing your car when you file for bankruptcy, you should discuss your situation with a qualified bankruptcy attorney.

Myth 2. My wage garnishment won’t stop until the end of my bankruptcy

When a person declares bankruptcy, all collection activity has to stop immediately! This includes wage garnishments and bank levies. A garnishment must cease immediately upon the filing of the bankruptcy case. You don’t have to wait until your bankruptcy discharge (at the end of the bankruptcy) to get relief from garnishments. This is why it is important to file your bankruptcy case as soon as you know that a garnishment is about to hit your paycheck. The sooner you file, the better chance you will have at keeping all of your wages to yourself.

Myth 3. The judge is going to criticize the reasons why I got into bankruptcy

This is completely untrue! For the most part, nobody cares why you are in need of bankruptcy assistance. Bankruptcy filers are there for numerous reasons, including job loss, medical issues, gambling, tax problems, or just making poor financial decisions. The important part is that you “play by the rules” in the bankruptcy court by following the requirements of the bankruptcy code.

Myth 4. Bankruptcy is too expensive for me

My law firm strives to make bankruptcy as affordable as possible. While each bankruptcy case is complex and requires serious work to complete successfully, we are able to provide real value to our clients. Lastly, the cost of not filing for bankruptcy is the real problem. If you’re endlessly paying high interest credit cards, payday loans, having money garnished from your wages, or are facing lawsuits, you should seriously consider whether bankruptcy is a better alternative than doing nothing.

If you have questions about declaring bankruptcy in the Sacramento area, please call my office at (916) 333-2222.

February 5, 2016/by Attorney Rick Morin

Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

What Happens to Tax Refunds in Bankruptcy 2016?

Tax Refunds and Bankruptcy Sacramento

It is that time of year again. If you earned wages in 2015, your employer will be sending you a W-2 any day now. Hopefully you will be getting some type of tax refund from either the Franchise Tax Board or the IRS. How does that affect a bankruptcy case?

Tax Refunds in General

The main reason that you would receive tax refunds is because you over-withheld taxes from your paycheck. I would rather over-withhold rather than end up owing each year. Many people use their tax refunds as a type of savings account.

Your tax refund is considered an asset. Someone, the government, owes you money. Until such time that you have received your money back from the government, your tax refunds are considered an “account receivable.”

Tax Refunds and Bankruptcy

As an asset, your tax refund must be disclosed and accounted for in your bankruptcy filing. If you don’t take the appropriate steps to protect your tax refund, the bankruptcy trustee assigned to your case can intercept and take your refund from you.

For most bankruptcy filers in California, tax refunds can be protected under California’s “wildcard” exemption. This exemption allows a bankruptcy filer to protect a certain amount of assets of any type, whether it be cars, cash in the bank, or even a tax refund.

For bankruptcy filers using 704 exemptions to protect significant amounts of equity in a home, the wildcard does not apply. This can leave a tax refund without an exemption and subject to intercept by the bankruptcy trustee. If you’re protection a large equity cushion in your house, surrendering one year’s tax refund is a reasonable tradeoff.

Bankruptcy filers using the 704 exemptions to protect a house should carefully look at their tax withholding. If typically receive a large tax refund each year and you anticipate having to declare Chapter 7 bankruptcy, it would be wise to re-evaluate your tax withholding. You can make adjustments to ensure that there won’t be a tax refund to take.

Thinking about filing for bankruptcy in the Sacramento area in 2016? Call my office at (916) 333-2222 to discuss your bankruptcy options. Don’t delay!

January 25, 2016/by Attorney Rick Morin

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

Uber Bankruptcy Sacramento

The number of people driving for Uber and Lyft these days is increasing rapidly. I have noticed many bankruptcy filers in my office reporting that they are working, at least part time, for Uber and Lyft. What does this have to do with bankruptcy? Let me tell you!

You Must Disclose All Income in a Chapter 7 Bankruptcy

Failing to disclose a source of income to the bankruptcy court can create some issues. Not everyone considers driving for Uber or Lyft to be a source of income, especially if they are just driving sporadically. However, all sources of income, even minor ones, must be disclosed.

Because there are income limits to Chapter 7 bankruptcy, extra income from Uber or Lyft can create issues. If you’re already close to the Chapter 7 Means Test limits, extra income can push you over the edge and into a Chapter 13 bankruptcy. There are some strategies to deal with this issue, but it is important to disclose all of your income sources to your attorney when you first meet.

Driving for Uber during the middle of your Chapter 7 case can also create some issues. In some cases, the bankruptcy trustee assigned to your case won’t want you running a business during your bankruptcy. This is because the bankruptcy trustee owns your liability during the pendency of your case. If you drive for Uber and file Chapter 7 bankruptcy, your attorney needs to check with your assigned Trustee to determine whether that will be a problem for them.

Extra Income in a Chapter 13 Can Increase Your Monthly Repayment

The goal of a Chapter 13 is to repay at least a portion of your debts over time under the supervision of the bankruptcy court. The court averages your monthly income over the preceding six months to determine what they think you should be able to afford to repay to your creditors.

If you are reporting extra income from Uber or Lyft during this six month look back period, your Chapter 13 payment might have to increase. But not everyone drives for Uber on a regular schedule. If you have sporadic side income from a Uber or Lyft, you should make sure that your attorney understands how often (or not) that you are out there driving.

Details really matter in a Chapter 13 bankruptcy case. You don’t want to be stuck in a Chapter 13 plan that you cannot afford. Make sure you discuss any extra income or side jobs with your attorney before you file your bankruptcy case.

I help consumers and business owners deal with debt and their finances in Sacramento. Please call me at (916) 333-2222 to discuss your bankruptcy options today.

January 18, 2016/by Attorney Rick Morin

Bankruptcy Law, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

5 Bankruptcy Things You Need to Know Before Christmas

Sacramento Bankruptcy Lawyer Rick Morin With Christmas just around the corner, many of you will be squeezing your paycheck to cover the extra expenses of gifts for friends, family, and coworkers. This struggle can lead to a hard look at your finances for the new year, and maybe even deciding that 2016 if finally the year to become debt free.

However, Christmas can be a tricky time if you are planning on filing for bankruptcy in the new year.

1. Watch Your Spending: Of course, it’s normal to spend more on average during the holiday season. But for many, it is also the time to finally pay back friends and family for help throughout the year. Maybe paying back mom and dad for letting you stay at their house while you were between jobs, or finally paying off that loan to your significant other to fix your car. Giving back to family and friends can feel like the right thing to do, but large payments can be construed as a preferential payment. In some cases the Court will go after loved ones to get that money back during a bankruptcy.

2. Watch Out for That Christmas Bonus: When filing for bankruptcy, the Court will look at your average monthly income for the last 6 months. This average is very important and will determine what chapter of the bankruptcy code under which you are allowed to file. So, if your income is already on the cusp of the means test, a large bonus might push you over the Chapter 7 limits and into a Chapter 13 reorganization.

3. Gifts: Have any gift items that have been passed down to you or inherited? Your great aunt’s fur coat? Your uncle’s signed baseball cards? Well during bankruptcy, you must disclose all of your personal items and their worth. In order to protect these family heirlooms, always inform your attorney of their existence before the signing — even things that you might consider to not have any real value.

4. New Year, New Forms: This last year the US Bankruptcy Court release new bankruptcy filing forms. These new forms went into effect on December 1st of this year. The Court will not accept bankruptcies submitted using the old forms. Prevent frustration and delay and make sure that your bankruptcy is filed on the correct forms.

5. Increased Prices: Bankruptcy prices might change in 2016. If you want to become debt free in 2016, get started today.

We hope that you have a great Christmas and a happy New Year. Please call the office at (916) 333-2222 if you have any questions about getting a fresh start through bankruptcy in 2016.

December 22, 2015/by Attorney Rick Morin