Bankruptcy Attorneys Chapter 7, Chapter 11 & Chapter 13 - Stonehavenlaw.com

Bankruptcy Attorney – Chapter 7 & Chapter 13 Bankruptcy

2010-07-05T23:27:00.000-07:00

Bankruptcy is the federal court process that is meant to give people a financial "fresh start" from burdensome debts either through liquidation or reorganization, under the protection of the bankruptcy court. While there are many chapters in the bankruptcy code, the most common bankruptcy sections for distressed individuals looking for temporary or permanent relief are Chapter 7 and Chapter 13.

Chapter 7 bankruptcy is the most common form of bankruptcy in the United States. Also referred to as "liquidation," individuals who reside or own property in the United States may file for Chapter 7 bankruptcy in a federal court. Chapter 7 strives to completely eliminate all of your legal liability to pay unsecured debt such as debt from medical bills, credit cards, and unsecured personal loans. Our Attorneys can help you determine if you qualify and whether or not Chapter 7 bankruptcy is the best option for your particular situation.

With Chapter 13 Bankruptcy, also referred to as "reorganization," you don't have to hand over any property, but you must use your income to pay some or all of what you owe to your creditors over time. Chapter 13 consolidates debt and reorganizes it into an affordable monthly payment plan approved by the court.

Free Consultation - Inland Empire Bankruptcy Attorney

2010-07-05T23:24:00.000-07:00

All of the attorneys at the Stone Haven Law Group are members of the State Bar of California and have extensive experience helping individuals in financial crisis. We take great pride in the attention that we put into each case, and will do everything we can to put you and your family in a better position for the future.

The Stone Haven Law Group is committed to helping individuals and families in the Inland Empire. We specialize in Chapter 7 bankruptcy and Chapter 13 Bankruptcy and offer an initial FREE CONSULTATION. Simply call 909-257-3056 today.

Ready to Stop Harassing Calls from Creditors?

If you are facing difficult financial times and want a fresh start, you should call the Stone Haven Law Group for a FREE CONSULTATION. We can help eliminate your debt and get your life back on track.

Convenient Inland Empire Location at 9121 Haven Ave, Suite 250
Rancho Cucamonga, CA 91730

Financial Crisis? Inland Empire Bankruptcy Attorney

2010-07-05T23:23:00.000-07:00

Financial Crisis? Inland Empire Bankruptcy Attorney

• Are you ready to STOP harassing phone calls from creditors?
• Are your monthly payments overwhelming you?
• Have you fallen behind on your mortgage payments?

If you answered yes to any of these questions you should call the Stone Haven Law Group for a FREE CONSULTATION. We can help eliminate your debt and give you and your loved ones a fresh start.

Call Today: 909-257-3056
Free Consultation with an Attorney
www.stonehavenlaw.com

Convenient Inland Empire Location at 9121 Haven Ave, Suite 250
Rancho Cucamonga, CA 91730

Your Car and Chapter 7 Bankruptcy

2010-01-27T14:36:00.000-08:00

If you own your vehicle outright, the State of California allows you to exempt from $3,300 to $2,550, depending on which exemption code you use, of the value of your vehicle. If your vehicle is worth more than the statutory automobile exemption, there are other State exemptions that allow you to retain your vehicle; your attorney will be able to help you with this.

If you are making payments on your vehicle, you have three choices. First, you may surrender the vehicle. If you choose to surrender the vehicle you will be forgiven of any deficiency on the loan, the amount of the loan less the amount the vehicle was sold at auction. Second, you may redeem your car by paying the lender in full. The Third choice is you reaffirm the loan, basically enter into a new contract with your lender and keep the same terms of the original agreement. If you choose to reaffirm your loan you may negotiate with the lender for a better interest rate or reduced payoff, if the payoff is more than the value of your vehicle. You have a bargaining chip in the negotiations because the lender knows that you have the right to surrender the vehicle and they can either choose to have used inventory or a regular monthly payment.

It is important to realize that if you choose to reaffirm your automobile loan and later are unable to make the payments, the lender will have the right to reposses the vehicle, sell it at auction and begin the collection of the deficiency amount from you. The lender may obtain a court judgment. The judgment allows the creditor to attach a lien to your home, levy your bank account or garnish your wages until the deficiency is paid off.

All reaffirmation agreements must be entered in your Bankruptcy Case before your case is closed and because of the serious consequences of default, these agreements must be reviewed and approved by either your attorney or the Judge appointed to your case, to insure the creditor is acting in good faith and it appears you can afford to reaffirm the loan.

Tax Debts in Bankruptcy

2010-01-07T11:19:00.000-08:00

I short sold rental property, thinking I was doing the right thing, I owe the money and wanted the lender to be paid on the debt rather than just giving the property back. Now I have heard that I will have to pay income taxes on the amount I was forgiven in the sale. I already owe income taxes from 2002 and 2003. I have heard that a bankruptcy will eliminate my tax debts. Is this true?

Dear Blogger:

Bankruptcy may help eliminate or restructure your debt, depending on which Chapter you qualify for, however, only some taxes can be eliminated in bankruptcy. You may hear radio commercials offering the hope of eliminating tax debts in bankruptcy. But it's not as simple as it sounds. Most tax debts can't be wiped out in bankruptcy – you'll continue to owe them at the end of a Chapter 7 bankruptcy case, or you'll have to repay them in full in a Chapter 13 bankruptcy repayment plan.

If all of the following conditions are true and you qualify to file a Chapter 13 bankruptcy your tax debts will be paid at the same rate as your credit card debts through your Chapter 13 plan and after the successful completion of your plan, your tax debt will be eliminated; if all of the following conditions are true and you qualify to file a Chapter 7 bankruptcy your tax debts will be eliminated:

* The taxes are income taxes - payroll taxes or fraud penalties, can never be eliminated in bankruptcy.

* You did not commit fraud or willful evasion – you commit fraud when you file a fraudulent tax return or willfully attempt to evade paying taxes, one example is using a false Social Security number on your tax return. Bankruptcy can't help.

* The debt is at least three years old. - Your tax return must have been originally due at least three years before you file for bankruptcy. Did you file an extension to file your tax returns? Then you must calculate the three years from the extension due date.

* You filed a tax return. You must have filed a tax return, for the year of the tax debt you want to eliminate, at least two years before filing for bankruptcy.

* You pass the "240-day rule." The income tax debt must have been assessed by the IRS at least 240 days before you file your bankruptcy petition, or must not have been assessed yet.

* All of these time limits may be extended by an “offer in compromise” or a previous bankruptcy.

One more thing – did the IRS record a tax lien in the county where you live in within the last 10 years?

Do you want the good news or the bad news first? Well, so we can end this blog on a positive note I will give you the bad news first. If the IRS recorded a tax lien in the county you live or own property within the last 10 years, you’ll have to pay off the tax lien in order to sell the property. The good news is that as long as the tax debt passes the 3 year, 2 year and 240 day rule your bankruptcy will eliminate your personal obligation to pay the debt which prevents the IRS from going after your bank account or wages.

The rest of the good news is that if you must pay your income taxes because they do not qualify for forgiveness under the 3 year, 2 year and 240 day rule; and you qualify for a Chapter 13, you know exactly how much you must pay off during your bankruptcy because the amount of the debt is frozen on the date you file your bankruptcy. As long as you successfully complete your Chapter 13 plan, you are free from that tax debt.

Each bankruptcy is an individual case. Your circumstances may be similar to others filing for bankruptcy, however, the totality of your circumstances make your case different from anyone else’s. Depending on the amount of taxes you owe, and the rest of your circumstances, a Chapter 13 bankruptcy may be your light at the end of the tunnel, a great alternative allowing you to pay your tax debt and get on with your life.

Income Tax after a Short Sale?

2009-11-23T19:39:00.000-08:00

I could not afford the rental property I purchased when I was making more money and was advised to short sell the property, after I short sold the property I received a 1099 from the lender and had to include the amount I was forgiven as income on my 2008 tax return and because of my decrease in income, could not pay the taxes and now I owe income taxes. Help.

This is a good question, and one we are asked very often. Now, let’s look at that income tax debt caused by a short sale. (Had our blogger simply surrendered the rental through a bankruptcy our blogger would not have incurred the income tax debt.)

Income tax is a priority debt that may or may not be forgiven in bankruptcy. The factors determining whether it will be forgiven are (1) what tax year the debt was incurred, (2) the date the tax return was filed and (3) whether the tax has been assessed. Our blogger will need to request a tax transcript from the government entity the taxes are due to, to make an accurate assessment, but generally if the taxes were due for the tax year 2005 or before, there is a high likelihood this debt will be forgiven.

Our blogger’s tax debt if from the tax year 2008 and will survive a Bankruptcy. Our blogger can file a Chapter 7, if our blogger qualifies, or a Chapter 13.

The good news about paying tax debt through a Chapter 13 bankruptcy is that the amount of the tax debt is determined at the date the petition is filed, no interest will be paid, unless the government tax entity has filed a lien against our bloggers property. As long as our blogger successfully completes the Chapter 13 Bankruptcy our blogger will be out from under that tax debt completely.

If our blogger qualified for a Chapter 7 but elects to file a Chapter 13 then our blogger could be free from this priority debt in as little as three (3) years. If our blogger qualified for a Chapter 13 only, then our blogger would qualify for a five (5) year Chapter 13. If our blogger qualifies for and files a Chapter 7, the tax debt will survive the bankruptcy. Our blogger may enter an agreement to pay the tax debt in installments with the government tax entity outside of bankruptcy, but the downside of that installment plan is that interest continues to accrue until the tax debt is paid in full.

Want to learn more about bankruptcy? Are you facing income tax from a short sale? The Stone Haven Law Group offers a free telephonic consultation to discuss you situation and the “fresh start” of Bankruptcy. Please call Stone Haven Law Group at (909) 457-8200 to discuss your options.

Which Chapter is Right for Me?

2009-11-23T19:31:00.000-08:00

I used to make great money but now the company I work for cut bonuses, overtime and my regular hours. I am unable to pay my credit cards, some which I have had for years and never missed a payment and the creditors are calling me. I know I owe the money but just cannot pay right now. Which Chapter is right for me?

Meet the new face of bankruptcy. This nation’s worst downturn in 70 years pushed more formerly affluent people into bankruptcy than in previous recessions. Overall, personal bankruptcy filings were up 36.5 percent in the first half of 2009 from the same time a year ago, and experts predict the number of filings will keep rising even as the economy recovers. We are finding more and more of our clients had annual income of $60,000 or more, were careful with their money and through no fault of their own are simply unable to make their payments. Leslie Linfield, executive director of the Institute for financial Literacy, calls it “a middle-class recession”

Our blogger needs to find out what remedies are available through bankruptcy. The remedies of Chapter 7 and Chapter 13 are different. First, what type of Bankruptcy does our blogger qualify for? If our blogger qualifies for a Chapter 7, but needs the remedies of a Chapter 13, then our bloggers’ Chapter 13 can be for as few as three (3) years or as long as (5) years, depending on the debts our blogger must pay (in a Chapter 13, priority and secured debts must be paid, the unsecured creditors receive a percentage payment on the amount they are owed) and how much “disposable income” our blogger has. We know our blogger has tax debt. This must be paid in full through a Chapter 13 plan and is a determining factor in the minimum amount the Chapter 13 monthly plan payment will be.

The changes in the Bankruptcy Code added a three (3) part test to determine if our blogger qualifies for a Chapter 7 (liquidating) Bankruptcy or Chapter 13 (repayment plan) Bankruptcy. The first and second parts of the test are based on our bloggers last six months of income from all sources, multiplied by two, to determine our bloggers “annual income”. The third part of the test is based on our bloggers current income and expenses.

Part One compares our bloggers “annual income” and household size with the local standards of “median income level” for the same size household. If our bloggers annual income exceeds the “median level income”, then our blogger qualifies for a Chapter 13.

Part Two subtracts our bloggers secured monthly payments (i.e. monthly mortgage or auto payment), allowable necessary expenses (IRS standards based on household size), and mandatory tax and insurance deductions from our bloggers monthly income (“annual income” divided by the number of months in a year). If there is no “disposable income” remaining after these expenses are deducted, then our blogger qualifies for a Chapter 7 and can also elect a three (3) year Chapter 13.

The third and last part of the test looks to our bloggers current monthly income and expenses. After subtracting expenses from income, if there is “disposable income” which when multiplied by 60 would pay 25% of our bloggers total unsecured debt, our blogger qualifies for a Chapter 13.

Sounds complicated? The changes in the Bankruptcy Code made it more difficult for the honest debtor to seek relief, but not impossible.

Call the attorneys at the Stone Haven Law Group today to learn more about whether bankruptcy is right for you and which Chapter may apply.

10 Thinks Bankruptcy Court Won’t Tell You, Smart money Magazine by Elizabeth O’Brien, Published September 30, 2009.

Can I get rid of this student loan debt?

2009-11-23T19:27:00.001-08:00

I am in default on my student loans. Can bankruptcy help me get rid of this debt?

Student loans are non dischargeable, generally. To discharge a student loan obligation through bankruptcy you must file a complaint requesting that your government-owned student loans be discharged pursuant to section Bankruptcy Code Section 523(a)(8). The standard for the Court to determine your student loan obligation discharged was set in the case Brunner v. New York State Higher Education Services Corp. in 1987. This means you need to satisfy the so-called “Brunner Test” and the court is to consider: (1) you current level of income and expenses, and determine whether you can maintain a minimal standard of living for you and your dependents if you are required to repay the loans; (2) whether there are additional circumstances suggesting that your current financial condition is likely to continue for a significant portion of the repayment period; and (3) whether you have made a good faith attempt to repay the loans.

The “Bruner Test” is a very high standard and basically, unless you care for or are suffering from a disability that will continue for your lifetime, that prevents you for earning sufficient income to support you and your family and you have made a good faith effort to repay your loans, you will be unable to discharge your student loan debts through a bankruptcy.

Testimony in the Congress hearings in 1998 intended undue hardship claims to be considered in light of “the availability of various options to increase the affordability of student loan debt, including deferment, forbearance, cancellation and extended, graduated, income-contingent and income-sensitive repayment options.” H.Rep. No. 750, 105th Cong. 2d Sess. 408 (1998).

There are other options to consider on your student loans. One such option is through the United States Department of Education, William D. Ford Federal Direct Loan Program (“Direct Loan”), offers various repayment options for student loan debtors. One of these is the Income Contingent Repayment Plan (the “ICR” plan). Essentially, once a student loan debtor is on an ICR plan, monthly payments are calculated on the basis of adjusted gross income, family size, and total amount of Direct Loan debt. This can give student loan debtors the flexibility and breathing room they need during difficult times. The maximum repayment period under an ICR plan is twenty-five years. Direct Loan provides a handy calculator for approximating ICR plan payments. The calculator is located http://www.ed.gov/ offices/OSFAP/DirectLoan/ calc.html.

If you make payments under an ICR plan for twenty-five years, and there are still amounts left owing, those unpaid amounts are forgiven. Of course, there may be tax consequences as a result of this forgiveness.

Call the attorneys at Stone Haven Law Group at (909) 457 – 8200 to discuss more about your particular loan and your circumstances.

Can bankruptcy stop the Credit Card Harassment?

2009-11-23T18:40:00.000-08:00

My hours at work were cut about 6 months ago. I am happy to have a job but now I have fallen behind on my credit card payments. They are calling me at all hours. I am worried they will start calling my work. What can bankruptcy do to help me?

Once you retain the services of any attorney you have the right to tell your creditors that all further communications are to go through your attorney. If you also write a letter to your creditors advising them all further communications are to go through your attorney and send it certified, return receipt through the United States Post Office or other mailing service in which you have proof an agent of the creditor received the letter, then, if the creditors continue to call, you have a cause of action against the creditor and its agent. This is one of the benefits of hiring an attorney to prepare and represent you in a bankruptcy.

You are not alone in the financial stress you are experiencing. Research by the Federal Reserve indicates that household debt is at a record high relative to disposable income. Many households have experienced a reduction in work hours, thus a reduction in income. In fact, the American Bankruptcy Institution statistics show that in second quarter of 2008, 32,387 bankruptcies were filed in the State of California. In the second quarter of 2009, 53,505 bankruptcies were filed in the State of California. That is more than 60% increase in filings.

Your credit card debts are discharged through a bankruptcy, as long as there is no fraud involved. You may be forgiven of all the debt through a Chapter 7 or for a percentage of the debt through a Chapter 13. See previous blogs to understand which Chapter you qualify for.

Call the attorneys at Stone Haven Law Group at (909) 457 – 8200 to take the first step towards ending creditor harassment!

Bankruptcy Law California: Things that Matter Before Filing Bankruptcy

2009-11-10T01:20:00.000-08:00

It is important to know the reasons causing Bankruptcy and the things essential to know before filing bankruptcy. Why it happens? Or what compels a borrower to declare that he or she is bankrupt? It is important to assess the factors that make you take that step to shed off the burden of overflowing debt.

The first and foremost is unemployment that stops the income that is used to pay back loans, large medical expenses that stops you from concentrating on the debts to pay off, divorce, death of the sole breadwinner in the family or other immediate causes or family disputes that creates a barrier for the borrower to clear debts. A recent study reported that more of US bankruptcies were caused by large medical Bills. It was estimated that illness and medical bills caused half (50.4 percent) of the 1,458,000 personal bankruptcies in 2001.

You know that Filing bankruptcy will put the entire foreclosure process but filing bankruptcy without an after thought can prove a fatal decision made it is therefore important to look into the chapters in Bankruptcy that you can file. Chapter 7 and 13 can help provide relief from the nerve raking debts and must be aware of them.

Chapter 7 bankruptcy that is "liquidation," can provide relief as it mitigates the legal liability to pay debts. The non-exempt property is then handed over to the bankruptcy trustee to sell it off to pay off the debts. The debtor receives a discharge within four months. Chapter 7 therefore helps a debtor to begin afresh. A debtor can therefore keep the exempt property but at the same time gets to shed off the overflowing debt.

Chapter 13 bankruptcy that is reorganization” provides the flexibility to pay debts according to affordable monthly payment plan approved by the court. Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. For this the debtor needs to have income that is saved after the daily livelihood expenses are taken care of.

Why choose Chapter 13 and not Chapter 7 Bankruptcy?
The next thing that should also be noted is to assess on what to choose. Chapter 13 bankruptcy is more applicable only when you are sincere to your efforts to pay back but with assistance from bankruptcy court. You can make modifications in your mortgage or car loan. Opt for chapter 13 bankruptcy when you do not qualify for chapter 12 family farming bankruptcy, you have already filed chapter 7 and can’t wait for another eight years to lapse so why not go for Chapter 13 instead. When in cases where you own a lot of non-exempt property and do not want to give off all of them under chapter 7 bankruptcy norms you can go for chapter 13 that saves even the co-debtor if any.

Taking heed of the essentials before filing bankruptcy therefore becomes a paramount necessity for those going for bankruptcy. The debtor is discharged 3 - 5 months after bankruptcy is filed, mitigating the possibility of foreclosures.

Bankruptcy Can Stop Foreclosure

2009-08-12T01:02:00.000-07:00

Bankruptcy creates an automatic stay that serves to stop, or put a hold on, all legal actions and proceedings that a debtor is facing. This includes a foreclosure proceeding. To this end, bankruptcy is an intriguing option to many homeowners facing foreclosure, as a mechanism to stop the home foreclosure and eliminate or reorganize their other debts. The most common and important question we are asked is how long the foreclosure process is stopped for. The answer to this depends on the particular chapter of bankruptcy a debtor will be filing for.

A Chapter 7 bankruptcy, also referred to as "liquidation," completely eliminates all of a debtor's legal liability to pay unsecured debt. Unsecured debt includes debt from credit cards, medical bills, and unsecured personal loans. If a Chapter 7 debtor is facing foreclosure, the bankruptcy will temporarily halt the foreclosure process until one of the following occurs: the bankruptcy process is completed, or the foreclosing lender gets the judge to lift the automatic stay. Unfortunately, if a borrower is far behind in their payments, and they do not have enough income to make the payments if the debt is reaffirmed, this relief can be granted immediately.

A Chapter 13, on the other hand, can stop a foreclosure proceeding permanently. A Chapter 13 bankruptcy consolidates debt and reorganizes it into an affordable monthly payment plan approved by the court. In comparison to Chapter 7 bankruptcy, Chapter 13 does not completely eliminate a debtor's unsecured debt and requires a debtor to repay a portion of or all of the debt. However, the debtor is able to pay off their debt in affordable monthly payments over a period of three to five years, as determined by the court depending on monthly income, expenses, and assets.

A Chapter 13 is also referred to as the “Wage Earners” bankruptcy because a debtor must be able to make a reasonable payment on their repayment plan, and stay current on their ordinary monthly payments. However, as long as the debtor remains on the repayment plan and does not default, the foreclosure proceeding will be permanently terminated, and the debtor will come out of the bankruptcy with just their monthly mortgage payments.

Bankrupty is a very serious step, with enduring consequences, but can provide debtors relief from the foreclosure process. Since both foreclosure and bankruptcy are very important and complicated procedures, please consult an attorney before moving forward.

Homeowner's Options When Facing Foreclosure

2009-07-11T00:12:00.000-07:00

RealtyTrac’s annual U.S. Foreclosure Market Report for 2008 indicates that 2,330,483 properties nationwide entered some stage of foreclosure. This would amount to an 81 percent increase from 2007 and 225 percent higher than the total number in 2006. The statistics for 2009 are looking even steeper, and there are no signs of relief in the near future.

With these unfortunate statistics, homeowners need to know their legal rights and options.

If a person is struggling to make home payments and may be facing foreclosure, the most obvious way to save his or her home, is to work out a mutually beneficial payment plan with the lender, or to revise the terms of original loan agreement in order to make manageable mortgage payments to the lender.

Loan modifications can be done whether or not a person is behind in the loan payments, based on his or her financial situation, current hardship, and ability to make smaller payments.

Additionally, there are a number of state and federal laws in place that are meant to protect borrowers from engaging in unfair lending practices. Unfortunately, many borrowers are unaware that they have been the victims of predatory lending practices. The best way to determine whether or not a person has been the victim of predatory lending is to have a forensic loan audit done on original loan documents.

If someone have been a victim of predatory lending, he or she may have the right to file a lawsuit against the lender and to put a stop to the foreclosure process for the duration of the suit. When combined with a loan modification, predatory lending violations provide leverage to homeowners in their negotiations with the lenders as well.

Finally, if a person is finding it difficult to make monthly mortgage payments because he or she is drowning in additional debt, and he or she may not even be able to make a modified payment amount, bankruptcy may be the best option. Bankruptcy not only puts an immediate stop on the Foreclosure process, but it also gives the opportunity to start fresh on the finances.