Chapter 7 Bankruptcy – Page 7 – Law Office of Rick Morin, PC

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

Chapter 7 Bankruptcy, Office Info

Top 3 Reasons to Hire Rick Morin

There is no shortage of bankruptcy attorneys to choose from in the Sacramento area. However, you shouldn’t put your financial future in the hands of just anyone. Here are the Top 3 Reasons to hire my law firm to handle your bankruptcy.

1. Best Customer Service in Sacramento

Bankruptcy is a huge life decision. My staff and I are dedicated to making sure that you understand what is going on each step of the way. Another way of saying that is that Customer Service is our number one priority.

This means that phone calls, emails and text messages are returned as soon as possible (in most cases in mere minutes). You will be constantly receiving status updates from both me and Hilary regarding the status of your case. Don’t get stuck with another law firm that won’t return your calls after you have paid your retainer. We are here for you each step of the way.

2. I Handle Your Case from Start to Finish

The other guys in town promise you that you receive individual attention. They’re right — but you will talk to a different person each time. In my law practice, I find time to meet with each and every client each step of the way. If you make the decision to hire me, I will be the one preparing your paperwork, helping you sign your bankruptcy, and I will appear in court with you during your bankruptcy hearing. This is how it ought to be.

When you walk into court with me, you will feel comfortable knowing that I personally handled all of the details of your case. And you will also see clients of other law firms meeting with their “attorney” for the first time minutes before they walk into the courtroom. Which would you prefer?

3. I Make Bankruptcy as Easy as Possible

As an attorney, I do all the heavy lifting for you. Sure, I need some help from you. I need financial documents such as pay stubs, tax returns and bank statements. From there, I take all of your materials and turn it into about 65 pages of legal documents that must be filed with the bankruptcy court.

All of my clients agree that the process was painless — especially clients that met with other attorneys before hiring my law firm. Has another lawyer handed you a 50 page questioner for you to fill out? The secret is that they are basically having you fill out the bankruptcy paperwork all on your own. If you’re doing all the work, what exactly are you paying them for?

Lastly, you don’t have to take my word for it. Take a look at Yelp reviews to see what other people have said about their experience with my law firm.

I am confident that my law firm will provide you with the best possible bankruptcy experience. Please call (916) 333-2222 to find out for yourself.

November 30, 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

Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

Bankruptcy Horror Stories

Halloween Living with out-of-control-debt has its own monsters: creditors calling at all hours, lurking lawsuits, bank levies, and garnishments that suck the earnings right out of your paychecks. Bankruptcy can offer a way out, a last minute exit from the debt-collection horror house.

However, the safe path is not always clear. Here are some bankruptcy horror stories that you should avoid:

When filling out her bankruptcy petition, Wendy accidentally provided the wrong Social Security number. She was shocked to learn weeks later that her debts were not getting discharged unless she quickly amended her bankruptcy paperwork to correct this huge mistake.

Brad works the graveyard shift. He knew he might miss his 8:00 am bankruptcy hearing, but he thought, “My attorney would be there. What’s the worst that could happen?” When the court date arrived, Brad’s attorney was frantic. He did his best to delay, but the trustee dismissed his case.

Freddy forgot that his uncle had recently turned into a zombie. Even the undead have wills, and Freddy inherited a ghoulish castle worth over a million dollars. When he didn’t list this large asset on this bankruptcy petition, the Bankruptcy Trustee seized the scary property without delay and sold it for the benefit of Freddy’s creditors.

Sabrina is always looking for a bargain. So, when she reviewed her bankruptcy options she decided to do it herself. A week after she submitted her petition, Sabrina was informed by the court that she did not qualify for a Chapter 7 and that her case was going to be thrown out! Instead of saving money by not using an attorney, she is now accountable for thousands and she will have to deal with negative consequences if she tries to file a subsequent bankruptcy.

Don’t let a botched bankruptcy ruin your fresh start. Avoid the tricks and hire experienced bankruptcy attorney Rick Morin. Call the office now at (916) 333-2222!

October 28, 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

Bankruptcy Law, Chapter 7 Bankruptcy

Business Bankruptcy

corporation While the main focus of my bankruptcy practice is consumer bankruptcy, I do run across folks that own their own business and need to file bankruptcy. The cost and complexity of business bankruptcy mostly depends on two main factors: 1) whether the business is incorporated or is a sole proprietorship; and 2) the assets and liabilities of the business.

Let’s discuss the first factor. If a business is formally incorporated, such as a California Corporation or a LLC, the the business is a separate entity. This means that the business itself is not the same as the person or persons that own the business. A corporation or LLC can file bankruptcy, but they can not receive a bankruptcy discharge. Therefore, most businesses file Chapter 7 to liquidate and wind-down operations, or Chapter 11 to reorganize.

Business bankruptcy for sole proprietors is different. Because the business and its owner are the same thing, a business owner may file for bankruptcy and receive a discharge of his or her business debts. Business bankruptcy also allows a business owner to get out of long-term leases that would otherwise result in civil liability for breach of contract.

Another way that sole proprietorships and Chapter 7 bankruptcy interact is if a business owner wants to keep operating during the bankruptcy. Some bankruptcy trustees do not like a business continuing to operate throughout the Chapter 7 process. This is because the liability of the business belongs to the Trustee during the pendency of the bankruptcy.

Some Bankruptcy Trustees will require a Chapter 7 debtor to stop operating his or her business. Others will require a liability insurance policy that names the Trustee as an insured. Others will require the debtor to file a motion with the court asking the court to abandon the business back to the debtor before the case is over. Because a sole proprietor will typically rely on his or her business income to survive, you can see that it is very important to plan a Chapter 7 bankruptcy carefully in this situation.

If you own a business and are considering filing bankruptcy, please call my office at (916) 333-2222 for more information about business bankruptcy.

October 16, 2014/by Attorney Rick Morin

Bankruptcy Law, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

How to Get a Student Loan Bankruptcy Discharge

For the 40 million Americans who currently have student loans, many assume that student debt cannot be discharged through bankruptcy. However, this is simply not true.

Receiving a student loan bankruptcy discharge can be difficult. However, in some cases student loan debt can be discharged during a Chapter 7 or a Chapter 13 bankruptcy.

First, the debtor must file an adversary proceeding, which is a separate lawsuit within their bankruptcy. During this proceeding, the court will decide if the debtor faces an “undue hardship” in repaying their student loans. Bankruptcy courts have been very strict in determining if debtors meet this qualification. Typically, the Brunner Test, or a similar evaluation, will be used. It states that a debtor faces “undue hardship” when they answer, “yes” to these 3 questions:

1. Is it impossible for the debtor to maintain a “minimal” standard of living?

2. Will the debtor be stuck in this situation for the foreseeable future?

3. Has the debtor actually attempted to repay their loans?

Debtors rarely meet all of these criteria and the court proceeding alone can be intimidating enough. To the majority of filers, the process seems impossible.

Yet, these are the main factors that promote the student loan myth. According to a 2011 study cited in US News & World Report and published by Jason Iuliano, of all the debtors with student loans, only 0.1% attempted to include their student loan debt in their bankruptcies. Of that tiny percentage, at least 40% got some or all of their student debt discharged. This shows that while discharging student loan debt may be difficult to do through bankruptcy, it is not impossible.

If you are struggling with your student loan debt or have questions bankruptcy, please call our office at (916) 333-2222.

October 7, 2014/by Attorney Rick Morin