Sacramento Bankruptcy Lawyer Rick MorinWhere do you find the list of debts that were discharged in your bankruptcy? The answer to that simple question might surprise you!

Bankruptcy Creditors

The debtor in each bankruptcy case tells the court about their specific debts. Whether it be a car loan, credit card, or payday loan, the debtor is responsible for informing the court about all of their debts. After all, nobody knows the debtor’s business more than the debtor themselves.

A bankruptcy does not necessarily discharge all debts. For instance, under current law, student loans are not discharged by the bankruptcy court. Nonetheless, a debtor still lists their student loans on their bankruptcy court. This is because debtors are required to disclose all of their debts at the time of filing.

Where Discharged Debts Go

The bankruptcy court issues a “discharge” at the end of a successful Chapter 7 bankruptcy. The bankruptcy discharge paperwork often times surprises debtors because of what isn’t there.

The discharge paperwork merely states that the debtor’s debts are discharged. That’s right: debts discharged in a bankruptcy are not itemized by the court. Importantly, the court does not specifically enumerate the debts that were not included in the discharge.

Bankruptcy Law Can Be Complicated

Where does that leave a debtor confused about which debts were included in the discharge? Bankruptcy law is complicated. A vast majority of bankruptcy filers choose to hire an attorney to declare bankruptcy. A qualified bankruptcy attorney will determine which debts were discharged by the court.

Contact my office at (916) 333-2222 for questions about declaring bankruptcy in the Sacramento area.

Sacramento Bankruptcy Lawyer Rick MorinThis is third in a series of articles I have wrote about dismissed bankruptcy cases. The first article discusses how to dismiss a bankruptcy. The second article discuss what happens after bankruptcy dismissal. This article will tell you all about what happens to your credit report after a dismissed bankruptcy. This article may suprise you!

Bankruptcy Means Bankruptcy

Many people believe that a dismissed bankruptcy “doesn’t count.” Nothing could be further than the truth. A bankruptcy filing is a public record and is accessible pretty much in perpetuity. Once filed, a case number is established along with a public docket of information. The court will not erase the case number or docketed items when a bankruptcy is dismissed.

Dismissed Bankruptcy and Credit Reporting

As you probably know, the major credit bureaus report bankruptcy filings. You will see a bankruptcy filing reported under the “public records” section of a credit report. As a general rule, a bankruptcy filing will remain on your credit report for 7 to 10 years. Credit reporting agencies make no distinction between a discharged and dismissed bankruptcy when it comes to how long the bankruptcy will remain on the credit reports.

Credit scoring models take bankruptcy filings into account when calculating credit scores. This means that even a dismissed bankruptcy will impact your credit score. As you can see, filing bankruptcy is not a decision to take lightly. The consequences can be long-lasting.

Conclusion

The point of this article should be clear. You should only declare bankruptcy if you really need to. Moreover, you should carefully consider your bankruptcy options before filing to ensure the success of your case.

I help consumers and business owners all over the Sacramento area with bankruptcy. Please call my office at (916) 333-2222 to discuss your bankruptcy options. 

Sacramento Bankruptcy Lawyer Rick MorinNot all bankruptcy cases end in a bankruptcy discharge. For various reasons, some bankruptcy cases are dismissed prior to discharge. What happens after a bankruptcy is dismissed? Read on to learn more.

Some Bankruptcy Cases Are Dismissed

Bankruptcy can be very complicated. Not all debtors make it all the way through their bankruptcy to discharge. The bankruptcy court dismisses most bankruptcies. Other times, debtors themselves request that their bankruptcy case be dismissed.

Dismissal prior to discharge does not necessarily mean that the bankruptcy failed. A debtor may utilize a bankruptcy filing to delay a foreclosure or other legal event until such time that they can make other arrangements. This strategic use of the bankruptcy code is not explicitly forbidden, but is generally frowned upon. However, that does not stop it from happening. This is especially true in Chapter 13 court where a majority of dismissals occur.

Failing to file the required paperwork will also result in case dismissal. Occasionally the debtor does not show up to court when ordered. The bottom line is that not all cases end in a discharge.

Post-Dismissal

What happens after a bankruptcy dismissal depends on the chapter under which the bankruptcy case was filed.

In Chapter 7 cases, the court will dismiss the debtor and the automatic stay will terminate. The court will likely close out the case fairly quickly thereafter.

In Chapter 13 cases, the court will dismiss the debtor and the automatic stay will terminate — just like in the Chapter 13. If the Chapter 13 plan was no confirmed, the Chapter 13 Trustee will refund any Chapter 13 payments received back to the debtor. If the Chapter 13 plan was confirmed, the Chapter 13 Trustee will wrap up the administration of the bankruptcy case and issue a final report to the court. The court will proceed to officially close the case once the Chapter 13 Trustee’s administrative duties are resolved. Timing here could be 30-60 days from dismissal to closure, depending on the circumstances of the case.

Important to remember: dismissal terminates the automatic stay! You may need to make alternative arrangements to protect property once your bankruptcy case is dismissed.

My office handles Chapter 7 and Chapter 13 bankruptcy cases in the Sacramento area. Please call us at (916) 333-2222 to schedule a friendly bankruptcy consultation. 

Sacramento Bankruptcy Lawyer Rick MorinBankruptcy filers are usually anxious to get their discharge from the court. A bankruptcy discharge is the official court order that excuses most debts. How long does that process take? Read on to find out more.

Typical Chapter 7 Case

A typical Chapter 7 case involves eliminating unsecured debts. Here in Sacramento, this process typically takes about 90 days. The 90 days starts when the bankruptcy case is filed with the court and ends with the discharge order. Most bankruptcy cases will be administratively closed by the clerk of the court about a week after the discharge is entered.

Filing Fee Installment Cases

The Bankruptcy Court provides debtors with the opportunity to pay the $335 Chapter 7 filing fee in installments. The court gives debtors 4 months to pay off this amount. Monthly payments are generally about $86 per month.

The bankruptcy discharge will be delayed until all filing fee payments are completed. This means that the discharge will take an extra month compared with paying the filing fee at the time of filing.

Filers can always pay ahead on their filing fee installment. Fliers can also make two payments at month three instead of waiting for month four. If a prompt discharge is important, paying the filing fee at the start of the case is the best idea.

Asset Cases

A small percentage of Chapter 7 cases filed in Sacramento will be classified as an “asset case.” This means that the Chapter 7 Trustee is liquidating some of the debtor’s assets in the bankruptcy.

Asset cases do not change the discharge timeline. A bankruptcy filer in an asset case will still get their discharge around the 90 day mark. But their case will be held open until the bankruptcy estate is fully administered. This will usually take a year from filing.

Please contact my office if you are considering filing for bankruptcy in the Sacramento area. My number is (916) 333-2222.

Sacramento Bankruptcy Lawyer Rick MorinForeclosures are still occurring on a regular basis in the Sacramento area. Bankruptcy can be an effective way to stop a foreclosure. But only certain types of bankruptcy can help. Chapter 7 will not necessarily save your home. Read on for more information about Chapter 7 Bankruptcy and Foreclosure.

The Automatic Stay Halts Foreclosure

The “automatic stay” in bankruptcy stops most legal proceedings pending against the bankruptcy filer. This includes non-judicial foreclosure, the type of foreclosure that is common here in California. When a person files for bankruptcy, the automatic stay takes effect and prevents foreclosure from moving forward.

If a foreclosure sale still happens after the bankruptcy has been filed, the foreclosure is “void.” This means that the sale has no legal effect whatsoever. And the foreclosing creditor has an affirmative duty to unwind its post-bankruptcy actions.

As you can see, bankruptcy can be very powerful tool.

The Automatic Stay in Chapter 7 Can Be Challenged

The goal of a Chapter 7 bankruptcy is to liquidate debts and assets. The filing of a Chapter 7 will result in the stay of legal proceedings as discussed above. However, a creditor can challenge the automatic stay. This is known as asking for “relief from the automatic stay.”

If a creditor can demonstrate that the bankruptcy filer has defaulted on their mortgage by not making payments, the court will likely order that the stay be “lifted.” This means that the property is no longer protected by the bankruptcy. And the creditor can proceed with their foreclosure.

For this reason alone, I advise clients not to file Chapter 7 bankruptcy if they are trying to prevent foreclosure and stay in the home. The Chapter 7 bankruptcy will only provide a few months of protection, at most. This might not be enough time to reorganize finances and bring the mortgage current.

Chapter 13 Might be a Better Option

If your goal is to not only stop a foreclosure, but to stay in your home, Chapter 13 is the much better option. Chapter 13 will allow you to reorganize your finances over three-to-five years. As long as you stay current on your mortgage payments and pay back your mortgage arrears, you can stay in your home.

Bankruptcy is a very important decision. Please contact my office to discuss which type of bankruptcy would be right for your situation. You can reach my law firm at (916) 333-2222.

Sacramento Bankruptcy Lawyer Rick MorinWhether to keep or not keep car payments is something that I typically have to address with my bankruptcy clients. There are several options available to bankruptcy filers. This blog post will focus on situations where the debtor wishes to retain the car and payments.

Be Careful After Filing Your Bankruptcy

Certain bankruptcy laws make it illegal for a creditor to attempt to collect a debt against a person in a bankruptcy case. This applies to mortgage companies and car lenders too. This means that a car lender will stop sending you paper statements after you file your bankruptcy case. After all, they aren’t allowed to ask you for money while you are in bankruptcy. If you have automatic payment arrangements made through your lender, they will stop deducting your car payment each month too.

Some bankruptcy filers mistakenly believe that they don’t need to keep making their car payments because they stopped receiving statements. This is not true, especially if you intend to keep the car after bankruptcy.

Keep Your Car, Keep The Payments

If you have decided to keep a car with loan payments after bankruptcy, it is your job to keep making the payments. As I stated above, you won’t receive paper statements while you are in bankruptcy. It is still your responsibility to mail in your payments on time.

If your car lender doesn’t see you making your regular monthly payments, they might assume that you no longer want to keep the car. The lender can go into the bankruptcy court and file a request to repossess the vehicle from you.

As an example, if you don’t make three months of car payments, the lender will get nervous and ask for relief from the court. You will then have to bring your car loan current in order to avoid the court granting the lender the right to repossess your car. If you haven’t saved the car payments, you might find it difficult to bring the account current.

There are many pitfalls for the unwary in bankruptcy proceedings. Please call my office at (916) 333-2222 to discuss how my law firm makes bankruptcy in Sacramento easy.

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 MorinThe Homestead Exemption in Chapter 7 Bankruptcy is very important. If you are filing for Chapter 7 Bankruptcy in Sacramento and own a home, you need to read this blog.

A Chapter 7 Bankruptcy is considered a liquidation bankruptcy. This means that the Bankruptcy Trustee assigned to your case can take your assets from you and sell them to repay your creditors. In a vast majority of cases, no assets are taking from the bankruptcy filer. Why is that? Because of things called Bankruptcy Exemptions.

What Are Bankruptcy Exemptions?

In California, there are laws that allow a bankruptcy filer to keep a certain amount of property. These exemptions are not unlimited — a super wealthy person probably wouldn’t want to file for Chapter 7 bankruptcy. However, for most people, the bankruptcy exemptions in California are generous enough so that they don’t lose their household goods, cars, jewelry, or other normal items.

If a bankruptcy filer owns a house, things get more complicated. If the market value of the house is more than the amount owed on the loan, then the house is said to have “equity.” And this equity must be treated like an asset and protected with a Bankruptcy Exemption. This will protect the house.

The Bankruptcy Homestead Exemption

A bankruptcy filer can keep protection under the Homestead Exemption if they have equity in their home. But again, this exemption is not unlimited. If the bankruptcy filer has too much equity in their home, the Bankruptcy Trustee can sell the house and use the proceeds to help pay down the bankruptcy filer’s debts.

How much is too much? The Homestead Exemption and other California Exemption numbers are changing all of the time. I don’t want to put down the specific numbers here on the blog because they won’t always be accurate in the future.

Suffice to say: if you are considering a Chapter 7 bankruptcy and you have equity in your home, you really need to meet with a qualified bankruptcy attorney. A mistake here can have grave consequences.

I help homeowners in Sacramento protect their homes with the Homestead Exemption in Chapter 7 Bankruptcy. Please call my office at (916) 333-2222 to determine whether bankruptcy is right for you. 

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.