It’s that time of the year again, and one of the most often overlooked aspects of a prospective bankruptcy filer’s financial picture is the tax return that is expected but not yet received. It is a common misperception that, when you file for chapter 7 bankruptcy, the bankruptcy trustee and court are concerned only about the past and the present state of your financial affairs. In fact, in many ways, they are just as concerned with future alterations to your finances.

An annual tax-return is often the largest unscheduled influx of cash that a consumer receives all year long, so it is of particular interest to trustees. From the end of a year, around late November to December, through March or April of the subsequent year, the possibility that a debtor filing for bankruptcy may receive a large check from the government is something that all parties need to keep in mind. For those of you considering filing for bankruptcy, especially now, it is important to include the amount of money you expect to receive in your tax-return in the disclosures you make to the bankruptcy attorney preparing your petition.

Remember to include your expected tax refund in your discussions with your attorney because it is especially important because, often, there may be steps the attorney can take to prevent the inclusion of the full refund in the chapter 7 bankruptcy estate which is overseen by the bankruptcy trustee. For example, if the refund is produced by excessive tax withholding throughout the tax year, the refund may be prorated over the course of the year with only the pre-petition portion being included in the estate. Issues also arise with regard to the tax refund in joint bankruptcy petitions (petitions for bankruptcy from a married couple). Certain tax credits may also be treated differently than others in the petition. The timing of the petition’s filing may also determine whether the refund is included in the estate at all, furthermore.

In short, as with all aspects of bankruptcy, the treatment of an expected tax refund is a complicated matter and should be discussed with a bankruptcy attorney. Many people rely on that tax return to get a jump on the new year, and losing it to a bankruptcy trustee due to an ill-time petition filing or other misstep is a major blow. The possibility is, however, a needless risk. Good planning with a bankruptcy attorney and, most importantly, full disclosure of your entire financial picture, including your future financial picture, will easily mitigate such risks.

If you are considering filing for bankruptcy and are concerned about the impact it may have on your ability to retain your tax refund or about the impact your tax refund may have on your ability to file bankruptcy in the first place, please contact the Law offices of Chirnese L. Liverpool at (818) 714-2200 to schedule a free, initial consultation.

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Unemployment benefits are many people’s only source of income in truly difficult times. However, they are often insufficient for providing the standard of living recipients had before becoming unemployed, and they are, therefore, also often insufficient for keeping people from losing further financial ground and arriving at the possibility of needing to file for bankruptcy simply to keep food on the table.

Fortunately, in Calfiornia unemployment benefits are protected when recipients file for bankruptcy. California law provides that unemployment benefits are not included in the “bankruptcy estate” that is created when you file a bankruptcy petition and that the bankruptcy trustee, who oversees that estate, may not, therefore, transfer that money to any of your creditors. Unemployment benefits must, however, be listed as part of your current income in Schedule I, which is one of the several “schedules” attached to each bankruptcy petition. This same amount is then also listed as “exempted” on another of the attached schedules, but it is important to disclose your unemployment benefits as income to your bankruptcy attorney.

Prior to filing for bankruptcy, creditors may endanger your unemployment benefits indirectly by threatening to sue you for money owed to them, and a successful suit would allow them to place a judgment lien on your personal property or even garnish your bank accounts—which might contain unemployment benefit funds.

If a creditor is threatening such actions against you, or if you have any concern over your ability to continue receiving unemployment benefits during or after a bankruptcy filing, please contact the Law office of Chirnese L. Liverpool at (818) 714-2200 to schedule a free, initial consultation. I’ll be glad to look at your entire financial picture, including unemployment benefits, and help you determine the best way to protect the income you have, regardless of its source.

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This is probably one of the common questions I receive from potential bankruptcy clients. And the short-answer is no, you cannot discharge traffic tickets in bankruptcy. This is what you will generally find in the “FAQ” section of many bankruptcy attorneys’ websites. However, there is a little more to it than that.

That short-answer really applies to Chapter 7 bankruptcy in particular. Under Chapter 7, traffic tickets are non-dischargeable under Section 523(a)(7) of the Bankruptcy Code, which specifically states that fines and penalties owed to and for the benefit of governmental units are non-dischargeable. This includes traffic tickets and other criminal (or punitive) fines.

Under  Chapter 13, however, some of these debts may be effectively dischargeable. Some restitution debts imposed by courts—those included in a sentence for the conviction of a crime—are non-dischargeable, but other restitution debts may be discharged. Fines imposed directly (not as a condition of probation or imposed in pre-trial hearings, etc.) as a criminal penalty are non-dischargeable. The question here is whether the fine is imposed as part of a sentence for the conviction of a crime. The definition of and associated penalties for traffic (and most other non-Federal) crimes is a matter of state law. Thus, it is largely a question of state law where the offense occurs whether a traffic fine can be discharged in a Chapter 13 bankruptcy. Some states define “crimes” as only misdemeanors and felonies and not civil infractions, moving-violations, and other categories of offense for which run-of-the-mill traffic tickets may be issued.

If you have any questions about traffic penalties in bankruptcy, please contact me at  (818) 714-2200 to schedule a free, initial consultation.

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It is inevitable that filing for bankruptcy can have an impact beyond the sphere of our own personal finances. Many people (including myself) have co-signed loans for others, had loans co-signed by others, or both. Frequently, those who have co-signed loans for us are our family or friends. Likewise, those we have co-signed for are frequently personal acquaintances. In either case, the filing of a bankruptcy petition can ripple across this financial support network, and rarely is it likely to endear us to one another.

Filing for chapter 7 bankruptcy when you have debts the loans for which were co-signed by family or friends is indeed likely to affect them adversely. If you file for chapter 7 bankruptcy, any co-signers on debts affected by the automatic stay that goes into effect against creditors when a bankruptcy petition is filed may suffer collection attempts against them. The automatic stay prevents creditors from pursuing you for payment, but it does not—except as I will describe below—prevent them from pursuing your co-signers. Obviously, although it may make for an uncomfortable conversation with your co-signing friends and family-members, etiquette, if not the law, may require a little fair warning about what you are planning.

However, in Chapter 13 bankruptcy filings, there is an additional stay that goes into effect when the petition is filed: the Co-Debtor Stay. This stay prohibits any attempt by the debtor’s creditors to collect the affected debt from any co-signers. For this stay to operate, the co-debtor need only have provided some security for the loan and need not even be personally liable for the debt. It is limited, though, to consumer debts (i.e., not business debts, some forms of legal and tax liability, and other obligations not incurred for a personal, family, or household purpose) and to co-debtors who did not become obligated through “the ordinary course of business.” Further, this stay is vulnerable to some significant limitations: it automatically ends if the bankruptcy is closed or dismissed or converted to another Chapter (other than 12), and the court may lift it for various reasons, including a sufficient level of harm to the creditor or it the Chapter 13 plan does not provide for payment in full of the creditor’s claim.

Regardless, on the up-side, many of the limitations to the automatic stay instituted in the 2005 amendments to the Bankruptcy Code do not apply to the Chapter 13 Co-Debtor Stay.  It is certainly something to keep in mind if you have suffered a job-loss, medical problem, or other issue leading you to consider filing for bankruptcy, but you do not wish to endanger the financial well-being of those who have helped you in the past.

If you are considering filing for bankruptcy and are concerned about the impact it may have up co-signers, please contact the Law offices of Chirnese L. Liverpool at (818) 714-2200 to schedule a free, initial consultation.

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While it is true that filing for bankruptcy is a serious blow to anyone’s credit-report, it is no longer completely true that, after a chapter 7 bankruptcy, it is impossible to rebuild your credit standing within a reasonable amount of time. The amount of time that rebuilding your credit actually takes varies from person to person, naturally, but, for many, filing for chapter 7 bankruptcy is actually the first step on the road to a renewed credit standing rather than the last, particularly if you are one of those whose credit health is in such a state of disrepair that a bankruptcy discharge actually is an improvement of sorts, in that it allows some positive progression to be made rather than a never-ending cycle of minimum monthly charge payments, late-payment fees, collection lawsuits, and garnishments.

It is an unavoidable truth that a bankruptcy will remain on your credit-report for up to 10 years, of course. The bankruptcy itself will be an obvious detriment for several years, but, eventually, it will be a detriment for future credit lenders examining your report to take into the context of, first, your report as a whole and, additionally, your baseline FICO score. In other words,  the bankruptcy can be balanced out somewhat by the steps you take in the first few years immediately following your bankruptcy discharge to rebuild your credit.

These steps will be obvious once your discharge is received in that, at least assuming our current credit-crunch magically eases at some point, credit-card issuers and other credit-lenders now, in the wake of the deregulation of the banking industries in the Clinton and Bush years, actually target post-discharge bankruptcy filers as what they believe to be a viable market-segment for their business. After your discharge, you will receive credit card and other solicitations fairly shortly. Most of these will be high-interest offers that you should avoid like the plague, generally, but, at some point, an offer will be made that will not look too badly that you may consider accepting in order to begin rebuilding your credit. Naturally, you’ll not want to end up in the same situation again and will want to be sure to pay off any new balances each month, but the opportunity will be there to begin rebuilding your credit the old-fashioned way: through the use of credit. Additionally, for FICO purposes, the bankruptcy discharge itself, which liquidates most of your actual debt, improves your income-to-debt ratio instantly.

Again, since you won’t be able to file for bankruptcy again for a number of years, you’ll need to be extremely careful accepting new sources of credit so that you don’t fall into the same personal crunch that led you to file bankruptcy in the first place. But, unlike in previous decades, when a bankruptcy discharge really did drop a nuclear bomb in the middle of your financial existence for many years, it is now possible to genuinely view a bankruptcy as a fresh start, if you handle it properly and don’t fall back into old habits.

If you have questions about the impact of bankruptcy on your future ability to borrow, please contact the Law offices of Chirnese L. Liverpool at (818) 714-2200 to schedule a free, initial consultation.

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Question: “During my bankruptcy, I received a ‘Notice of Abandonment’ from the Trustee! What does that mean?”

Answer: When a debtor receives a “Notice of Abandonment” from the trustee, they should not be alarmed. The title of the document oftentimes scares debtors into thinking they are going to lose the property listed in the notice, which is not the case.

Basically, a notice of abandonment is the trustee’s way of saying that for one reason or another, the listed property cannot be liquidated for the benefit of your creditors. When a bankruptcy case is filed, real and personal property become part of a “bankruptcy estate” which the trustee is in control of. Once the trustee reviews the case and determines he cannot make any money for creditors by liquidating specific assets, they will file an abandonment notice on these items.

The most common reason the trustee abandons an asset is because it is burdensome to the estate. For example, if you have a car worth $10k but owe $15k on it, the trustee will abandon the car because if he were to sell it he would have to first pay off $15k to the vehicle lender. If the car is only worth $10k, there would be no money left over to pay any other creditors. The same is true for real estate. If you owe more than your home is worth, or if the costs of selling the home (ie. Realtor fees etc.) eat up any money available for creditors, then the trustee will abandon the asset back to you.

Upon abandonment, the property is your to do with what you choose and is no longer part of the bankruptcy process.

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A deed in lieu of foreclosure is the process of reconveying title of property back to the lender so the lender does not have to initiate the expensive and time consuming foreclosure process. In exchange for conveyance, the lender usually cancels all personal indebtedness associated with the defaulted loan, which is a deed in lieu’s greatest benefit. A deed in lieu also hurts a borrowers credit score less than an actual foreclosure does.

In order to be considered a candidate for a deed in lieu, the indebtedness owed by the borrower must be secured by the real property being transferred. It is not possible to transfer other real property that is not collateral secured by the loan. The deed in lieu agreement must be voluntary on both sides and presented in good faith. In theory, the current loan balance should be equal to the fair market value of the property being conveyed, or the lender could refuse to accept a deed in lieu. As a practical matter, however, lenders will analyze the economics of the situation and may accept a deed in lieu if the alternative is a costly foreclosure. There are many intricate details involved with a deed in lieu of foreclosure and consumers contemplating this option should hire counsel familiar with the process in order to obtain the desired results.

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This is a question I hear quite often as people contemplate filing for chapter 7 bankruptcy. The answer is no. The decision to file for bankruptcy relief is relative to the debtor’s financial situation. For example, it is not uncommon for someone who is living on social security or other fixed income to file for bankruptcy only owing a few thousand dollars in credit card debt.

The problem here is ridiculous interest rates coupled with people who, because of their limited incomes, are unable to make anything more than the minimum monthly payment on these debts. It creates a vicious, never-ending cycle which a chapter 7 bankruptcy snaps.

Whether or not you have a mountain of debt, or very little debt, so long as that debt appears to be beyond your ability repay, you may qualify for bankruptcy.

This again comes back to the importance of seeking out and hiring an attorney who is able to competently analyze your options and help you determine the best course of action to take.

For more information regarding minimum debt requirements, or for other bankruptcy law questions, contact The Law offices of Chirnese L. Liverpool at (818) 714-2200

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Before your Chapter 7 bankruptcy discharge will be granted, you must complete a financial management course, and your bankruptcy attorney must file a certificate of completion for the course.

Section 727(11) of the Bankruptcy Code states the court shall grant the debtor a discharge, unless:

after filing the petition, the debtor failed to complete an instructional course concerning personal financial management described in section 111, except that this paragraph shall not apply with respect to a debtor who is a person described in section 109(h)(4) or who resides in a district for which the United States trustee (or the bankruptcy administrator, if any) determines that the approved instructional courses are not adequate to service the additional individuals who would otherwise be required to complete such instructional courses under this section (The United States trustee (or the bankruptcy administrator, if any) who makes a determination described in this paragraph shall review such determination not later than 1 year after the date of such determination, and not less frequently than annually thereafter.)

Typically, the court will NOT issue a warning to remind you that the certificate of completion is late and needs to be filed right away.  Take the financial management course as soon as possible after your meeting of creditors (341 meeting) and get the certificate of completion to your attorney right away.

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If you have been researching bankruptcy and student loans, you’ve learned by now that student loans are generally not dischargeable.  If student loans are all that is dragging you down financially, unfortunately, bankruptcy is probably not going to solve the problem.

One alternative to explore is Income-based Repayment (“IBR”).  IBR is is a repayment plan for the major types of federal student loans that caps your required monthly payment at an amount intended to be affordable based on your income and family size.

Only certain types of loans qualify, including Stafford, PLUS and Consolidation Loans made under either the Direct Loan or FFEL Program are eligible for repayment under IBR, EXCEPT loans that are currently in default, parent PLUS Loans (PLUS Loans that were made to parent borrowers), or Consolidation Loans that repaid parent PLUS Loans. The loans can be new or old, and for any type of education (undergraduate, graduate, professional, job training).

Also, only certain debtors qualify. You may enter IBR if your federal student loan debt is high relative to your income and family size.  You can use the U.S. Department of Education’s IBR calculator to estimate whether you would likely qualify for the IBR plan. The calculator looks at your income, family size, and state of residence to calculate your IBR monthly payment amount. If that amount is lower than the monthly payment you would be required to pay on your eligible loans under a 10-year standard repayment plan, based on the greater of the amount you owed on your loans when they initially entered repayment or the amount you owe at the time you request IBR, then you are eligible to repay your loans under IBR.

You can read more here.

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A trustee, creditor, or the United States trustee can ask the bankruptcy court to revoke a Chapter 7 bankruptcy discharge up to one year after the discharge has been granted or the case has been closed.

Section 727(e) of the Bankruptcy Code provides:

The trustee, a creditor, or the United States trustee may request a revocation of a discharge—

(1) under subsection (d)(1) of this section within one year after such discharge is granted; or

(2) under subsection (d)(2) or (d)(3) of this section before the later of—

(A) one year after the granting of such discharge; and

(B) the date the case is closed.

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You CAN Become Free of Overwhelming Medical Debt with Personal Bankruptcy

Medical debt is one of the primary reasons families declare bankruptcy. Lack of insurance, copays and deductibles, uncovered services — these can all add up to hundreds of thousands of dollars in medical debt for families already facing the trauma of a serious illness.

Even the birth of a child can cost thousands of dollars, putting financially strapped young families in an even bigger bind.

Thousands of families face the same situation every year because of the high cost of medical care and the ineffectiveness of our health care insurance system. It you are facing unmanageable medical debt, you DO have options. Filing for personal bankruptcy is one of them.

At the California bankruptcy law offices of Chirnese L. Liverpool, our experienced California bankruptcy attorneys understand the emotional and financial challenges you face. We have helped hundreds of clients obtain a discharge of their medical debt with Chapter 7 bankruptcy.

Did You Hear from the Collection Agency Before You Got a Bill?

It’s not unusual to find that 30 days after your first day in the hospital or first clinic visit you are already hearing from a collection agency. That’s because hospitals and medical clinics often find it more cost effective to go straight to collections. Do not be surprised by this tactic.

What if You Can’t Pay Your Bill in Full?

The short answer is, you may not have to. People get themselves in trouble when, after being presented with a huge bill, they decide not to pay anything because they can’t pay it in full. If you do this, you could wind up with a legal judgment against you.

You can try to work with medical creditors to obtain a manageable payment plan. We can advise you how to negotiate with the hospital and doctor so you can pay a portion of your debt. If a payment plan isn’t possible or the medical debt is overwhelming, Chapter 7 may be an option for dealing with medical debt.

Contact Us Today

When you are ready for real solutions, contact the law office of Chirnese L. Liverpool — real lawyers for real people. Your initial consultation is free. We help clients with consumer bankruptcy in the Los Angeles metro area and beyond, throughout the State of California.  Contact us today at (818) 714-2200.

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The economy has taken a big dive over the past year and it caught a lot of people off guard owing on debts while their income dropped. For people with jobs in businesses that are vulnerable to recession such as construction, real estate or car sales, the effects have been more profound and immediate.

Bankruptcy is one option that many people consider but it should always be a last resort, because it’s not as easy as it used to be to escape paying debts, because of recent changes in the laws covering bankruptcy. You really do want to preserve your credit rating so it will be there for you when the economy comes around and having a bankruptcy on your record will poison your chances of a clean rebound.

You need to get real about your personal life, because if you look back you are in debt because you borrowed a bunch of money that is now gone. If you are living with a partner that refuses to reign in their spending and is relying on you to cover for them let them know that times are changing and if they don’t clean up their act, then they can hit the road.

If you’re short on capital you might be better off single anyway, because it’s far easier to pull one person out of a hole then it is to pull two out. Many a person has been led to financial ruin by thinking with their heart rather then their head. If you are gambling now is the time to stop, because it is just the same as putting your money down a toilet. One thing that you should do is to contact a qualified credit counselor and listen to their advice as they will have the experience in dealing with people like you that are having financial problems.

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Finding a  bankruptcy attorney that can help you with your bankruptcy case is very important to you. Selecting a good bankruptcy lawyer is the most important thing you can do when you are in such a situation. You have to find someone that has a lot of experience in this area, and at the same time, are well aware of the bankruptcy laws and regulations.

In this article we are going to give you some tips on how you can choose the ideal bankruptcy lawyer for your case. It is important that you have knowledge on this subject before you are about to begin.

A bankruptcy lawyer must be licensed to work in your state. You should know that every State of the United States has its own laws on bankruptcy. That’s why you should choose a bankruptcy lawyer in your state.  You can not hire a bankruptcy lawyer from another state that is not licensed in your state. It is not only the rules, but you have to have a person who knows the bankruptcy laws of your state, so that she can understand exactly your case and help you get the most out of it.

Another important thing is that this lawyer that you have chosen should communicate with you, and you should feel comfortable to talk about your financial problems with her. You understand that the level of comfort that will be between you and them, is one of the most important factors, if you want to defend your case in a successful way.

Ask questions about your case, your financial life, and ask a question about her reputation, her previous experience, and so on. Anything that can help you choose a lawyer,  will be great to ask.

If you are looking for more information on personal bankruptcy, please feel free to call the Law offices of Chirnese L. Liverpool at (818) 714-2200.

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