Monthly Archives: December 2010

This article was originally posted on Yahoo Finance

2011 will be the year of the municipal default. At least that’s what analysts like Meredith Whitney predict, as do bond investors that have been fleeing the muni market.

There are many reasons to be worried. First, the expiration of Build America Bonds will make it harder for cities to raise funds.

Second, city revenues are crashing and keep getting worse. Property taxes haven’t reflected the total damage from the housing crash. High joblessness is cutting into city revenues, while increasing costs for services.

The next default could be a major city like Detroit, or it could be one of hundreds of small cities that are on the brink. Did we leave off your ailing city? Let us know in the comments.

San Diego, Ca.

Deficit through June 2012 : $73 million

Budget in FY2011: $2.85 billion

Annualized gap: 1.7%

The city’s official have tried curbing the deficit by increasing sales taxes, but residents of the city strongly oppose this and have voted it down.

San Diego already cut over $200 million over the past two years, so these cuts won’t come easy.

New York, NY

Deficit through June 2012: $2 billion

Budget in FY2010: $63.1 billion

Annualized gap: 2.1%

Estimates of the NYC deficit range from $3.6 billion according to Comptroller John Liu to around $2 billion according to the Independent Budget Office. Everyone agrees that the deficit will be worse if New York state cuts aid as part of its own deficit reduction plan.

Mayor Bloomberg has already started to address the FY2012 deficit, calling for layoffs in all city agencies, closing 20 fire departments at night, and reducing services for seniors, libraries and cultural centers.

San Jose, Ca.

Deficit through June 2012: $90 million

Budget in FY2010: $2.7 billion

Annualized gap: 2.2%

After an audit of the San Jose police department, city officials found it to have too many high paid supervisors, costing the city too much money. The answer to this is converting some of those upper ranked officers to patrol positions. This could reduce the city’s debt by $33 million.

Last year’s deficit was $116 million, leading to brutal cuts including nearly 900 layoffs.

Cincinnati, Oh.

Deficit through December 2012: $60 million

Biennial budget FY2009/2010: $2.5 billion

Annualized gap: 2.4%

Helping the budget in Cincinnati depends largely on changes in the police and fire departments. The city can either get $20 million in concessions from the two unions, lay off 216 firefighters, or outsource the police force to neighboring city, Hamilton.

Honolulu, Hi.

Deficit through June 2012: $100 million

Budget in FY2011: $1.8 billion

Annualized gap: 3.7%

Mayor Peter Carlisle said police officers and fire fighters will be asked to make concessions in the upcoming budget and he will also end furloughs of two days per month for public workers. This will require the 2,900 officers to give back their 6% pay raises they have received in each of the past four years.

Last year Honolulu raised some property taxes to fill a huge $140 million deficit.

San Francisco, Ca.

Deficit through June 2012: $380 million

Budget in FY2011: $6.55 billion

Annualized gap: 3.9%

Mayor Gavin Newsom says this year’s deficit is completely manageable. Last year’s deficit approached $500 million and the city did not need to lay off any police or firemen. While Newsom’s term is coming to an end, he says he and his colleagues will leave detailed options for the incoming mayor.

Last year’s cuts were even larger, eliminating a $438 million deficit. The city is down to the bone.

Los Angeles, Ca.

Deficit through June 2012: $438 million

Budget in FY2011: $6.7 billion

Annualized gap: 4.4%

The Los Angeles City Administration Office plans to cut 225 civilian positions in the LAPD, reduce firefighting staffing, and eliminate a dozen positions in the City Attorney’s Office and General Service Department. The deficit will only get worse unless an effort to privatize parking garages is approved. If not, the city will require more layoffs, furloughs, and curtailed hiring.

Last year’s deficit was even larger, totalling nearly $700,000.

Washington, D.C.

Deficit through September 2012: $688 million

Budget in FY2011: $8.89 billion

Annualized gap: 4.4%

Council member Tommy Wells proposed tax rate increases which were voted down, but Wells says he will continue to push his proposal.  Wells’ proposal seems reasonable as residents making $100,000 a year would only pay $63 more in taxes per year. This is a small price to pay that would benefit the city immensely.

Newark, NJ

Deficit through December 2011: $30.5 million

Budget in FY2010: $677 million

Annualized gap: 4.5%

Newark’s deficit was $83 million before Mayor Cory Booker initiated a plan to sell city-owned buildings, raise property taxes to 16 percent and decimate the police force. Nontheless, Moody’s cut Newark’s rating to A3 citing its $30.5 million remaining deficit.

Detroit, Mi

Deficit through June 2011: $85 million

Budget in FY2011: $3.1 billion

Annualized gap: 5.5%

Detroit’s city government has cut costs with layoffs and by leaving currently vacant positions open. Mayor Bing’s emergency fiscal plan includes demolishing houses and cutting police and trash services to 20% of the city.

Last year the city council pushed through severe cuts to fill an over $700 million deficit.

Reading, Pa

Deficit through December 2011: $7.5 million

Budget in FY2010: $120 million

Annualized gap: 6.3%

One of Pennsylvania’s several distressed municipalities, which receive state aid, Reading has been running an operating deficit for years. In September the city council said their deficit was bigger than expected, soaring to $7.5 million for the current year, which means they will have to borrow around $17 million from the state to pay off total debts.

Joliet, Il

Deficit through December 2011: $21 million

Budget in FY2010: $274 million

Annualized gap: 7.7%

Last year, the city increased property tax by over 12 percent and hiked water and sewer rates by 45 percent over three years to help with the deficit. The city council also cut police and public sector jobs.

Camden, NJ

Deficit through December 2011: $26.5 million

Budget in FY2010: $178 million

Annualized gap: 15%

Despite holding title of second most dangerous city in America, Camden recently received approval to lay off half of its police force.

Hamtramck, Mi

Deficit through June 2012: $4.7 million

Budget in FY2011: $18 million

Annualized gap: 17%

City manager Bill Cooper was denied permission to declare bankruptcy. He says the city is owed millions of dollars in tax dollars from Detroit from a shared facility. The state offered the city a loan to stave off bankruptcy.

Cooper says he has already cut almost everything possible, going so far as to lay off the city’s five crossing guards.

Hamtramck might avoid bankruptcy, but also-broke Michigan can’t afford many of these deals. That’s why Gov. Rick Snyder predicts “hundreds of jurisdictions” going bankrupt in the next four years.

Central Falls, RI

Deficit through June 2012: $7 million

Budget in FY2011: $21 million

Annualized gap: 22%

Central Falls has been put in state receivership due to critical budget problems. State-appointed receiver Mark Pfeiffer thinks the best solution is for Central Falls to be annexed by its neighboring city, Pawtucket.

Paterson, N.J.

Deficit through December 2011: $54 million

Budget for FY2010: $225 million

Annualized gap: 24%

As a “last resort,” Paterson is considering laying off 30 percent of its police force, said councilman Steve Olimpio. This will put 150 police officers out of work.

BONUS: Chicago, Il

Deficit through December 2011: $654 million Closed

Budget in FY2010: $6.8 billion

Annualized gap: 9.6%

Mayor Richard Daley has balanced the budget, but absolutely ruined Chicago finances from here on.

His FY2011 plan uses up nearly the entire revenue from a long-term lease of the local parking system and airport, which he passed in 2008. The multi-billion lease deal was supposed to last for decades, but it only lasted two years. The best hope for the future is building a city-owned casino.

Share this:

If you are overwhelmed with debt or are considering bankruptcy, a question on your mind may be, “Do I need an attorney?” This is an important issue to consider. An individual filing for bankruptcy in Los Angeles, California is not required to hire an attorney to handle his case, although we highly recommend that you do work with a legal professional both in the decision-making process and through the entire course of your case. There are numerous benefits to involving a licensed attorney.

First, a California bankruptcy attorney can help you make the right choice about filing in the first place. This may involve a thorough review of your financial situation from an objective standpoint. You can discuss your short and long-term financial goals and can discuss all potential positive and negative effects that filing may have on you and your family. Getting information that addresses your questions and concerns may enable you to make the right choice about filing. It can also help you determine whether Chapter 7 or Chapter 13 may be a better option.

Once you decide to file, your attorney can handle all of the technical and legal issues that may arise. This includes ensuring that:

• Your petition is properly filed;
• All pertinent financial information is properly included;
• Your legal rights are protected through the entire process;
• Your property is protected under bankruptcy exemptions;
• All eligible debt is discharged; and
• Any issues/contests by creditors are addressed if they arise.

California Bankruptcy Attorney

Bankruptcy is a legal process that needs to be approached correctly if you are to discharge all eligible debt and secure a fresh financial future. The way to achieve this is to involve a competent legal professional who will be with you every step of the way. Learn more about our services by browsing through the information on our site .

Contact a California Bankruptcy Attorney at the Law offices of Chirnese L. Liverpool for a free, confidential review of your case.

Share this:

Article taken from Consumer affairs:

Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001, according to a study published by the journal Health Affairs.

 The study estimates that medical bankruptcies affect about 2 million Americans annually — counting debtors and their dependents, including about 700,000 children.

Surprisingly, most of those bankrupted by illness had health insurance. More than three-quarters were insured at the start of the bankrupting illness. However, 38 percent had lost coverage at least temporarily by the time they filed for bankruptcy.

Most of the medical bankruptcy filers were middle class; 56 percent owned a home and the same number had attended college. In many cases, illness forced breadwinners to take time off from work — losing income and job-based health insurance precisely when families needed it most.

Families in bankruptcy suffered many privations — 30 percent had a utility cut off and 61 percent went without needed medical care.

The research, carried out jointly by researchers at Harvard Law School and Harvard Medical School, is the first in-depth study of medical causes of bankruptcy. With the cooperation of bankruptcy judges in five Federal districts (in California, Illinois, Pennsylvania, Tennessee and Texas) they administered questionnaires to bankruptcy filers and reviewed their court records.

Dr. David Himmelstein, the lead author of the study and an Associate Professor of Medicine at Harvard commented: “Unless you’re Bill Gates you’re just one serious illness away from bankruptcy. Most of the medically bankrupt were average Americans who happened to get sick.”

Today’s health insurance policies — with high deductibles, co-pays, and many exclusions — offer little protection during a serious illness. Uncovered medical bills averaged $13,460 for those with private insurance at the start of their illness. People with cancer had average medical debts of $35,878.

“The paradox is that the costliest health system in the world performs so poorly. We waste one-third of every health care dollar on insurance bureaucracy and profits while two million people go bankrupt annually and we leave 45 million uninsured” said Dr. Quentin Young, national coordinator of Physicians for a National Health Program.

“With national health insurance (‘Medicare for All’), we could provide comprehensive, lifelong coverage to all Americans for the same amount we are spending now and end the cruelty of ruining families financially when they get sick.”

Share this:

This article was originally featured on msn and bankrate

Sometimes, a fresh start makes sense — if you can get past what you think you know. Here’s how bankruptcy affects your credit, your possessions and your karma.

Like most big, bad, scary things, bankruptcy has a reputation based on a few tidbits of truth and lots of embellishment. And like most creepy crawlies, it’s not nearly as frightening once you know the truth.

With a mind toward declawing the monster, here are a dozen misconceptions about bankruptcy:

Everyone will know I’ve filed for bankruptcy. Unless you’re a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors. While it’s true that bankruptcy is a public legal proceeding, the numbers of people filing are so massive, very few publications have the space, the manpower or the inclination to run all of them.

All debts are wiped out in Chapter 7 bankruptcy. You wish. Certain types of debts cannot be erased. They include child support and alimony, student loans and debts incurred as the result of fraud. If you’ve defrauded someone and a judgment has been made against you, that won’t be erased either.

I’ll lose everything I have. This is the misconception that keeps people who really should file for bankruptcy from doing it, says Chris Viale, chief operating officer of Massachusetts-based Cambridge Credit Counseling.

“They think the government will sell everything they have and they’ll have to start over in a cardboard box,” Viale says.

While the bankruptcy laws vary from state to state, every state has exemptions that protect certain kinds of assets, such as your house, your car (up to a certain value), money in qualified retirement plans, household goods and clothing.

“For most people, they’ll pass through a bankruptcy case and keep everything they have,” says John Hargrave, a bankruptcy trustee in New Jersey. If you have a mortgage or a car loan, you can keep those as long as you keep making the payments (like the rest of us).

I’ll never get credit again. Quite the contrary. It won’t be long before you’re getting credit card offers again. They’ll just be from subprime lenders that will charge very high interest rates. “There are innumerable companies that will provide credit to you,” says  bankruptcy trustee Howard Ehrenberg. “I don’t advise any of my clients to run out and run up the bills again, but if someone does need an automobile, they can go and will be able to get credit. You don’t have to go underground or something to get money.”

However, if you’re planning to buy a house or a car, you might want to do that before you file. Those loans will be tough to get, and the higher interest rate on such a large purchase would make a significant impact on your payments. Also, if you have a credit card with a zero balance on the day you file for bankruptcy, you don’t have to list it as a creditor since you don’t owe any money on it. That means you might be able to keep that card even after the bankruptcy.

If you’re married, both spouses have to file for bankruptcy. Not necessarily. “It’s not uncommon for one spouse to have a significant amount of debt in their name only,” Hargrave says. However, if spouses have debts they want to discharge that they’re both liable for, they should file together. Otherwise, the creditor will simply demand payment for the entire amount from the spouse who didn’t file.

It’s really hard to file for bankruptcy. It’s really not. You don’t even technically need an attorney. However, it’s not recommended to go through the procedure without one.

Only deadbeats file for bankruptcy. Most people file for bankruptcy after a life-changing experience, such as a divorce, the loss of a job or a serious illness. They’ve struggled to pay their bills for months and just keep falling further behind.

I don’t want to include certain creditors in my filing because it’s important to me to pay them back someday and if the debt is discharged, I can’t ever repay them. Bless you for even thinking about such a thing. You’re no longer obligated to repay them, but you always have that opportunity. If your conscience won’t let you sleep nights because you didn’t pay your debts, there’s nothing in the bankruptcy code that prevents you from doing that once you’re back on your feet. But bankruptcy is an all-or-nothing deal, so you have to include all your creditors in the petition.

Filing for bankruptcy will improve my credit rating because all those debts will be gone. That sounds like an ad for a bankruptcy lawyer trolling for clients. Filing for bankruptcy is the worst ‘negative’ you can have on your credit report. Unlike other negatives, which stay on your report for seven years, bankruptcy can be there for up to 10 years.

You can’t get rid of back taxes through bankruptcy. Generally speaking, this is true. However, there is such a thing as tax bankruptcy, says tax educator Eva Rosenberg, known on the Web as Tax Mama. To get a shot at it, you have to file all your returns and the taxes owed need to be at least three years old.

You can only file for bankruptcy once. The truth is, you can only file for Chapter 7 bankruptcy once every eight years, Hargrave says. (Before the new bankruptcy law passed in 2005, you could file every six years.) For Chapter 13 reorganization, you can file more often than that, but you can’t have more than one case open at the same time, he says.

Of course, that doesn’t make it a good idea.

“Multiple bankruptcies are really bad,” Rosenberg says. “Many people get into the habit of once they’ve done it, it becomes a way of life. This is not good for your karma.” Or your credit rating.

I can max out all my credit cards, file for bankruptcy, and never pay for the things I bought. That’s called fraud, and bankruptcy judges can get really cranky about it. The trustee in your case will review all your purchases right before your filing. He knows what to look for.

If you are interested in filing bankruptcy, contact a bankruptcy attorney today.

Share this:

As a California Bankruptcy Attorney and a Los Angeles Bankruptcy Attorney my clients frequently ask me if they should reaffirm the debt owed on their home mortgage when they file a Chapter 7 bankruptcy case. In this scary real estate market, many homes with mortgages are underwater, which means that these homes are worth less than what is owed against them. Therefore, reaffirming debt on a home is a serious legal question.  For example, if you file a Chapter 7 bankruptcy case,  your home is worth $200,000.00 and you owe $240,000.00 on it, you can file a Chapter 7 bankruptcy case, move to another home and get discharged from the debt owed to your mortgage company.

However, as a California Bankruptcy Attorney and a Los Angeles Bankruptcy Attorney, I find that most of my clients that file a Chapter 7 bankruptcy case want to keep their home. Obviously, you must to be able to make the monthly mortgage payments on your home after you file your  Chapter 7 bankruptcy case if you want to keep your home. You must also keep the home insured, and keep the property taxes on the home paid, just like you were required to do before you filed your Chapter 7 bankruptcy case.

When you file a Chapter 7 bankruptcy case, you are discharged from the debt owed to your home mortgage company.  However, their lien or mortgage on your property is not discharged and if you want to keep the home you must keep making your monthly mortgage payments.  However, if you move, get fired, get divorced, get sick…..or experience anything that renders it impossible or too difficult to make your mortgage payments, you can stop making the mortgage payments and let your mortgage company foreclose on your home.  If the home is sold at the foreclosure sale for less than you owe against it, you are not liable for that deficiency.  Continuing to make the mortgage payments after the bankruptcy discharge is received does not reinstate your personal liability on the home mortgage.

Mortgage companies sometimes send us “Reaffirmation Agreements” and we are asked to sign them and have our clients sign them when the clients are in a Chapter 7 bankruptcy case.  A Reaffirmation Agreement “reaffirms” or “reinstates” your personal liability on the home mortgage as if their was no bankruptcy case filed.  If you reaffirm the debt during your Chapter 7 bankruptcy case and then do not pay it, you owe that debt as if you never filed bankruptcy.  If you do not or can not make your mortgage payments, your mortgage company will foreclose on the home and then attempt to collect from you the deficiency after the foreclosure sale.

Do you have to reaffirm your mortgage debt in order to keep your home? Do you have to reinstate that personal liability on your home as if there was no bankruptcy I order to keep your home?  The answer is simple….no.

I have yet to see a mortgage company in California foreclose on someone’s home, after a Chapter 7 bankruptcy case is filed , who was keeping the payments, home insurance and property taxes, just for not signing a reaffirmation before the Chapter 7 discharge.

Chrysler and Ford Motor Credit will foreclose on your car or truck that you are financing with them if you do not reaffirm their debt.  These companies lobbied Congress in order to get special provisions in the Bankruptcy Code that only apply to car lenders in Chapter 7 bankruptcy cases.  Therefore, many times we do reaffirm debt owed to these lenders if the clients want to keep their cars after their Chapter 7 bankruptcy case is filed.

However, home mortgage debt is different. I look at the upside versus the downside. I see no downside to not reaffirming. Some  banks and mortgage companies say they will not inform the credit reporting agencies that you are current on the payments unless you reaffirm their debt. However, you have the right to include accurate information in your credit report. You can add you correct information to your credit report  at least once a year, yourself, without them. They are required to give you at least annual statements reflecting your outstanding mortgage.

The downside?  Big .You reaffirm, something else goes wrong, and you cannot stay current, they foreclose for the $100,000 the house is worth, and chase you for the $40,000 difference. Unless you are getting some fantastic modification, we typically advise our clients not to reaffirm their home mortgage debt.

Want a bankruptcy consultation?  Contact the Bankruptcy Law Offices of Chirnese L. Liverpool at (818) 714-2200.

Share this:

As a California bankruptcy lawyer, I am frequently asked this question. The answer is, No, it is never too late. However, waiting until after a Judgment is entered may not be a good idea.

When you file a Chapter 7 bankruptcy case or a Chapter 13 bankruptcy case, an “automatic stay” immediately comes into place stopping virtually all civil litigation and collection activities. The “automatic stay” prohibits creditors from continuing to sue you, filing a lawsuit against you or enforcing a judgment against you. If you have been sued, this means that lawsuit must stop. If you have been sued but a judgment has not yet been entered by the Court, that creditor is treated just like any other unsecured creditor.

However, if you waited until after a judgment has been entered against you, then what? First, in the State of California if the judgment creditor filed a document called an “Abstract of Judgment” in the Deed Records in the county in which you own any real estate, that Judgment becomes a lien on that real estate. However, if that real estate is your homestead, that Abstract of Judgement lien can be released by asking the Bankruptcy Court to enter an order avoiding it and then recording a copy of the Bankruptcy Court’s order avoiding that Judgment lien in the real property records in the County where your home is located.

Assuming that you have real estate that is not your homestead and an Abstract of Judgment is filed in the Deed Records where that property is located, that judgment lien attaches to that real estate. That judgment creditor is now a secured creditor and you must deal with the creditor by either surrendering the property or allowing the judgment creditor to have the sheriff sell the property. That debt can potentially be dealt with very favorably in a Chapter 13 bankruptcy case if you would like to try to keep that non-exempt property.

If a Judgment creditor has a judgment against you, that creditor can also ask the Sheriff or constable to come to your home and determine if you have any non-exempt property with which to satisfy that judgment lien. Also, many Judgement creditors send a long list of questions called Interrogatories to individuals that they have judgments against in which they will ask you to disclose all of your assets and liabilities. If you don’t answer those questions, a Court can order you to do so or you will be held in contempt of Court.

All of that activity can be stopped if a Chapter 7 bankruptcy case is filed.

As you can see, if you have a creditor suing you or you have a judgment against you, it is best to consult with a good bankruptcy attorney. Your creditors have lawyers and you need one too! Please visit our website at http://www.liverpoollegal.com to learn more about our firm and the relief available under the federal bankruptcy laws.

Share this:

You can add a creditor to you bankruptcy, but it is imperative that you get the information regarding that creditor (name, address, approximate amount owed and if at all possible the account number) to your attorney as quickly as possible because there are deadlines in Chapter 7 cases. Though adding an additional creditor will result in a small court imposed filing fee and additional attorney fees , the cost of adding a creditor is usually a pittance compared to the possible cost of keeping them out. Of course the best possible practice is to be extremely diligent in searching for all your creditors prior to filing your bankruptcy case.

Share this:

One frequent topic of discussion with my clients is the way bankruptcy will affect their tax refunds. Some clients assume that all future refunds will somehow be set off against what they owe; others assume that the government will keep it for some period of time. I want to make sure that clients know what can happen to a tax refund, both to minimize the impact, and so my clients can plan accordingly.

When a Chapter 7 bankruptcy is filed, the court appoints a trustee whose job is to collect assets, turn them into cash, and use that to pay creditors. The pool of assets that can be reached by the trustee, called the “estate” is created on the day that the bankruptcy petition is filed with the court, and consists of everything the debtor owns as of that day. Bankruptcy courts have held that a tax refund, or a portion of it, can be an asset, even though you may not receive it (or even file your tax return) until well after the bankruptcy petition has been filed.

Most courts divide the tax refund in proportion to the point in the tax year when the case is filed. To make it simple, if you filed a bankruptcy petition on July 1, 2007, halfway through the year, 50% of your tax refund can become property of your bankruptcy estate. Obviously, if you file later in the year, that proportion will be greater. As another example, if you filed your petition in January of 2007, your entire tax refund for 2006 might become property of the bankruptcy estate. Note that I said “might”–there are other issues to consider, like any exemption you are entitled to claim, or whether your spouse has filed bankruptcy with you. The impact will depend upon those factors, and especially how you time your filing. And a little planning can go a long way.

In some states, such as South Carolina, trustees will usually begin looking for tax refunds in cases filed in August, although it seems to get earlier every year. Trustees here are probably among the most aggressive on this issue, in large part because South Carolina has a very low cash exemption ($1,000, only available if you are not claiming a homestead) and does not recognize any other exemptions that affect tax refunds. Some states allow greater cash exemptions, or exempt the portion of the tax refund that is attributable to the earned income credit, so consulting with experienced bankruptcy counsel in your jurisdiction is a must.

Why do trustees start looking at refunds in cases filed in August or thereabouts? It’s purely a matter of practicality. The trustee is looking not just at the amount of the possible refund, but administering the case–tracking the filing of tax returns, making sure the refunds are collected. It also comes back to planning. I advise my clients who typically receive a large refund to review their W-4s, and if their large refunds are attributable to earned income credit, consider filing W-5s. A W-5 form is like a W-4, but calculates the likely earned income credit, and adjusts your withholding accordingly. I don’t recommend that clients claim more exemptions than they are entitled to, but if you claim what you are entitled to claim, you will take home more in each paycheck. Most people will still get a refund, but it won’t be as much.

Some clients are dismayed to learn that their tax refund might be taken by a trustee. I am in favor of planning to reduce the impact, but it shouldn’t drive the decision to file bankruptcy, or even determine when a bankruptcy is filed, unless there are no other factors to consider. Here’s why: First, if someone told you that you could take your tax refund and settle all your outstanding debt for that amount of money, would you take that deal? That’s essentially what you’re doing by filing bankruptcy. Second, most people in financial distress use their tax refunds to catch up on bills anyway. Again, bankruptcy will take care of that. (Many people go year after year, slowly falling behind on mortgages and other debts during the year, and using tax refunds to catch up again. It never occurs to them to modify their withholding, take home a larger paycheck, and keep it caught up during the year. And, by the way, avoid paying huge amounts of interest and late charges.)

Finally, because the bankruptcy estate includes only what the debtor owns at the time the case is filed, tax refunds for subsequent years are not affected by bankruptcy. Those will be yours to keep. Generally, Chapter 7 affects only refunds for the year in which the case is filed, but it can also affect refunds for prior years which haven’t been received prior to filing.

Each year, I see a lot of clients who end up using their tax refund to pay my fees and the costs of filing bankruptcy. Naturally, I am in favor of that, but it does seem to be a logical way to use those funds. But don’t wait to consult an attorney. There may be other issues which are more important, tax refunds may be exempt in your jurisdiction, or you may be able to set up your withholding to minimize the impact of bankruptcy on your tax refund.

To speak with a bankruptcy attorney today, contact the Law Offices of Chirnese L. Liverpool at (818) 714-2200.

Share this:

Article found at: http://www.bankruptcylawnetwork.com

Filing bankruptcy is usually an administrative process.  Information is gathered, forms filled out, and there’s a brief hearing conducted by a  trustee.  But in some cases an “adversary proceeding” occurs.

An adversary proceeding is essentially a case within a case.  It’s a lawsuit within your case about something related to the bankruptcy case.

All this is a little abstract, so let me give you a common example of a typical adversary proceeding in a consumer bankruptcy case.  Let’s say that you obtained a large cash advance prior to filing your case.  Maybe you didn’t know you’d be filing bankruptcy and were trying to get some money to pay your mortgage, or to prevent your car from being repossessed.  The card car issuer, however, might not see it that way if you borrowed $5,000 in the form of a cash advance only a few months prior to filing bankruptcy.

Debts incurred by fraud are non-dischargeable.  So if you obtained the cash advance with no intention of paying it back, that’s fraud.

The credit card issuer would then have to make the decision whether to file a complaint—an adversary proceeding—to ask the court to determine whether you incurred the debt fraudulently.

The litigation following would be the adversary proceeding.  Like any other litigation, there would be a complaint, an answer, discovery—where documents, witness lists, and information is exchanged, and perhaps even depositions.  And after all that, there would be a trial.  At the trial, the judge would determine if you committed fraud when you obtained the cash advance.

There are many other situations in which adversary proceedings arise.  In other instances, the debtor brings the adversary proceeding to bring a claim or to obtain a determination from the court.  The Bankruptcy Rules of Procedure specify the situations in which parties must file adversary proceedings.

Share this:

On behalf of the Law offices of Chirnese L. Liverpool posted in Bankruptcy on December 6, 2010

Share this:

If you are considering filing for bankruptcy, it is normal to experience some level of doubt. Perhaps you are worried that bankruptcy will result in bad credit or a permanently damaged credit score.

Fortunately, these fears are unfounded. Filing for bankruptcy will not necessarily result in bad credit or prevent you from securing a line of credit.

In fact, you will probably be able to obtain some level of unsecured credit (meaning a “regular” credit card) post-bankruptcy. However, in the event you are unable to obtain a line of unsecured credit, you still have another equally viable option: a secured credit card.

Share this:

In these difficult economic times, more and more Americans are turning to bankruptcy for a much-needed fresh financial start. In fact, recent studies have shown that one demographic that is turning to bankruptcy with greater frequency is seniors (age 65 and over).

To illustrate, 19 years ago, only two percent of all bankruptcy filers were elderly, while two years ago, 7 percent of all bankruptcy filers were elderly.

Share this:

On behalf of the Law offices of Chirnese L. Liverpool posted in Bankruptcy on December 6, 2010

Share this:

On behalf of the Law offices of Chirnese L. Liverpool posted on December 6, 2010:

If you are currently considering bankruptcy, you have likely been contacted by debt collection agencies. Unfortunately, this contact was probably incredibly aggressive and unpleasant. It may have even gone so far as to threaten repossession, wage garnishment or arrest.

Share this:

In these times of financial hardship more and more average Americans are looking for the protection and relief found from bankruptcy. Most don’t want to file; most didn’t ever think they would be in this position; all are worried about their future after they file bankruptcy. They want to know how their life will change after they file. Will they now have the ability to obtain new credit, or will this be a permanent black mark on their credit history?

New credit is absolutely possible after bankruptcy. Credit agencies, seeing that you now have your financial situation under control, will inundate you with credit card offers. Secured cards will typically offer lower rates than unsecured. This is not to say that you should sign up for all of these cards, but obtaining a new card or two that you can pay in full and on time will help you bring your credit score up very quickly. You can quickly increase your credit score by having one or two open cards that you never spend over thirty percent of the limit, and always pay off as soon as the bill comes in.

If you didn’t have a home before you file, it is still within your reach. If it is an immediate need, you may need to apply for an FHA loan which typically requires a minimum credit score of 620 and you will most likely need to refinance at some point to lower your interest rate. If you can wait 18 to 24 months after your discharge, studies show that bankruptcy debtors can qualify for a loan on agreeable terms. Your interest rate will almost always be commensurate with your credit score so pay these new credit cards and any other installment payments on time. Never pay anything more than 30 days after it is due. Also, save up as much of a down payment as possible. Mortgage brokers are more inclined to work with you the higher your down payment is.

As mentioned before, you should be offered credit cards soon after you are discharged. This evidences that filing bankruptcy generally is better for your credit than whatever financial situation lead you to read this blog. In most instances your credit score has tanked already: late payments, old debt, foreclosure, repossession, collection accounts, etc.  Bankruptcy allows you to put those in your past and start fresh, where your new credit can be good credit.

Share this:

This Post’s idea sponsored by Charlotte Bankruptcy Attorney:

You cannot squeeze blood out of a turnip.  Collection agencies do not understand that.  If you let them intimidate you, then you can sometimes end up making a bad mistake like borrowing money from another creditor just to pay the debt that collector is harassing you about.   Typically, when you fall behind on a debt the creditor will try to collect from you for several months.

Then, if you are unable to collect the debt they will turn the debt over to a debt collector who bombards you with harassing telephone calls.  Typically, if you find yourself in a situation where you are unable to pay creditors and they are harassing you then you should consider debt settlement and/or bankruptcy options. If you do nothing, then the situation can mushroom into a serious debt problem.

Share this:

Creditors can be a royal pain.  Many times they will call, and call, and call with no willingness to listen to whether or not you are going through a difficult time.  You may get nasty letters in the mail or bull-headed debt collectors calling you on the phone day and night.

Sometimes, the original creditor does not wait very long until they send the debt over to a debt collector.  After the debt collector hounds you with harassing telephone calls for a couple of months, they often send it along to a law firm.  The law firm typically will write you a couple of letters, and then they usually file a lawsuit.  You only have a limited amount of time to file an answer to the lawsuit before you get a default judgment against you.

Taking a pro-active approach to a debt problem is much better than doing nothing.  Seeking your options under Chapter 7 of the Bankruptcy Code is the smart approach.  Doing nothing is the wrong approach in almost every situation where there is a debt problem.

If you are interested in filing for chapter 7 bankruptcy, call our Bankruptcy Law Firm at (818) 714-2200 or visit us on the web.

Share this:

It has been our experience that problems arise unless you deal directly with the IRS from the outset.  If your tax returns have been on file for more than three (3) years and your case happens to fall within the exception to the general rule that taxes are not dischargeable in bankruptcy, then it is important to specifically notify the IRS that the taxes have been discharged.  Otherwise, the IRS typically takes the position that they are never discharged.

As such, it is often necessary to file an Adversary Proceeding and obtain a Federal Court Order against the IRS advising them that they have been discharged.  An Adversary Proceeding is like filing a separate lawsuit against the IRS.  If the amount of your potential tax liability is substantial, then we feel it is advisable to file this action against the IRS.  When our eligible clients do not obtain such a specific Order from a Federal Judge, we have found it common for the IRS to continue to try to levy on their accounts and/or to withhold tax refunds to which they would otherwise be entitled.

Share this:

Over the last two years, there have been promises from banks to try to modify the home loans of Americans to make it more affordable for them to remain in their home.  The basic idea was that the debtor had to send in some documentation to be reviewed and then they would be advised if they qualified for the loan modification program in a few weeks.

Typically, a couple of months later they would be called back to be advised that they needed to send in some more documentation.  Then after sending that documentation in, they were often called back to be advised that the documentation was not received.  Then, many people sent it in again only to receive notice that they still needed to send in the same or additional information several weeks later.  Often times, people were advised to fall behind on their mortgage.  Then, after struggling with the loan modification program they were later advised that they did not qualify and they were set for foreclosure.

At that point, the best way to stop the foreclosure most of the time is to file a Chapter 13 bankruptcy and pay back the arrearages through the Chapter 13 Plan.  Most people qualify to discharge all of their credit card debt in the Chapter 13 and many people can reduce their monthly payments on their car through the bankruptcy.

Share this: