Sacramento Bankruptcy Lawyer Rick MorinTo be successful in bankruptcy, full and complete disclosure of your debts is required. This isn’t always possible. But there is good news. You can amend your bankruptcy to include a forgotten creditor.

Try to Disclose All Debts at Time of Filing

To the maximum extent possible, list all of your debts on your bankruptcy petition the first time. The court will send notifications to each of these creditors. The initial notification is very important. It tells creditors about your bankruptcy case. The initial notice also contains important deadlines.

If a creditor is not listed at the time of filing, they will not receive the initial notice of your bankruptcy. If the unlisted creditor takes action against you, it wont necessarily be their fault.

Consequences of Not Listing a Creditor

As discussed above, not listing a creditor can create some problems. The first one is obvious. The creditor might not ever find out about your bankruptcy. This means that the creditor might not take appropriate steps to prevent further collection activity against you.

In some cases, an unlisted debt may not be excused by the bankruptcy court. This means that you could emerge from bankruptcy still owing one or more creditors money. This would be a very unwelcome surprise at the end of a bankruptcy proceeding.

What to do Next

If you discover that you forgot to list a creditor on your initial bankruptcy paperwork, contact your attorney. You should do this as soon as possible. There are steps that can be taken, including amending your bankruptcy paperwork, to fix this problem.

If the unlisted creditor is not discovered until after your bankruptcy case is over, again I would advise you to contact your bankruptcy attorney as soon as you can. In certain circumstances, you may need to take additional action. In other cases, nothing else is required because of a unique feature of bankruptcy law in the Ninth Circuit.

I am a bankruptcy attorney in Sacramento, California. Please call my office at (916) 333-2222 if you have questions about bankruptcy proceedings in Northern California. 

Sacramento Bankruptcy Lawyer Rick MorinA Bankruptcy Trustee is appointed in each Chapter 7 and Chapter 13 bankruptcy case here in Sacramento. Read on for more information about who these people are and the job they do.

Sacramento Chapter 7 Bankruptcy Trustees

At the start of a Chapter 7 bankruptcy in Sacramento, the court automatically assigns a Trustee. The Trustee is picked from a list that the United States Trustee maintains. Each assignment is random. You never know which Trustee will be picked for a case.

Chapter 7 Trustees are there to administer the bankruptcy case. This means that they review the court paperwork, conduct a Meeting of Creditors, and collect property (if appropriate) from the debtor.

Your creditors can object to the appointment of the Chapter 7 Trustee. Your creditors can also elect their own trustee. However, this is very rare in a typical consumer bankruptcy in Sacramento.

Most consumer bankruptcy cases do not require the Trustee to collect assets. In these no-asset cases, the Trustee completes their administration of the bankruptcy case within a few months. Most Chapter 7 cases last between 90 and 120 days.

Sacramento Chapter 13 Bankruptcy Trustees

The job of Chapter 13 Trustees in Sacramento is much different. And there are only two Chapter 13 Trustees in Sacramento at this time.

Chapter 13 Trustees oversee your entire Chapter 13 case from start to finish. Most Chapter 13 cases last anywhere from three to five years. This means that a Chapter 13 Trustee is doing a lot more work than a Chapter 7 Trustee.

Chapter 13 Trustees collect your monthly Chapter 13 payment. They are required to distribute your money to your creditors in accordance with your Chapter 13 plan.

If you fall behind on your Chapter 13 payments, the Trustee will notify the bankruptcy court. The Trustee can ask the court to dismiss your bankruptcy case if you do not keep up with your payments.

My law firm helps people in the Sacramento area get help with their finances. We handle both Chapter 7 and Chapter 13 cases. Please call us at (916) 333-2222 to discuss whether bankruptcy is right for you. 

Sacramento Bankruptcy Lawyer Rick MorinThere 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. 

Sacramento Bankruptcy Lawyer Rick MorinYour 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

  1. List the legal name, address, and debt amount of the new debt on the appropriate bankruptcy schedule.
  2. Write a big “A” next to the name of the creditor. This tells the clerk of the court which debts are being added.
  3. In the Eastern District of California, you are required to prepare an Amendment Cover Sheet. You can download this form from the court website.
  4. 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.
  5. 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.
  6. 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.
  7. 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. 

Sacramento Bankruptcy Lawyer Rick MorinRapper 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. 

Sacramento Bankruptcy Lawyer Rick MorinI 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. 

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. 

Sacramento Bankruptcy Lawyer Rick MorinOne 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. 

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.

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!